Credit Cards for Bad Credit

Expert’s Answers

What are the best credit cards for bad credit?

By: John Kiernan, Personal Finance Editor

A secured card is definitely the best type of credit card for people with bad credit, as the refundable security deposit that is required for account opening precludes the need to charge high fees, making the credit-rebuilding process as inexpensive as possible. With that being said, CardHub’s editors compared hundreds of credit cards for bad credit – both secured and unsecured – and have determined the following offers to be the best available:

Best credit cards for bad credit

Rank	Card	One-Time Fee	Annual Fee	APR
1	Capital One Secured MasterCard	$0	$0	24.99% (V)
2	Discover it Secured Credit Card	$0	$0	23.24% (V)
3	Harley-Davidson Secured Credit Card	$0	$0	23.24% (V)
4	Navy Federal Credit Union nRewards Secured Credit Card	$0	$0	9.24% - 18% (V)

As you can see, no unsecured credit cards for people with bad credit made the list. Their terms just aren’t friendly enough. Nevertheless, if you’re facing an emergency expense that you can’t afford in cash, the Credit One Bank Visa is probably your best bet. Its annual fee can be anywhere from $0 to $99, based on your overall creditworthiness, while its regular APR ranges from 15.65% to 24.15%. You can also browse the rest of the best unsecured credit cards for bad credit to compare other options.

How do I know if I have bad credit?

By: Odysseas Papadimitriou, WalletHub CEO You can find out in two minutes by signing up for a free WalletHub account. You’ll get daily updates to your credit score and report as well as customized credit-improvement advice and card suggestions. There’s also a qualitative test: If any of the following are applicable, you have bad credit: Alternatively, if any of these are applicable, you have bad credit:

You are late on a credit card, loan or medical bill or payment
The balances on your credit cards are near your limits
You have declared bankruptcy in the last three years
You have been more than 60 days late on a medical bill, credit card or loan payment in the last nine months.

How do I improve bad credit?

By: John Kiernan, Personal Finance Editor Simply put, get a credit card for bad credit and use it responsibly. In order to improve bad credit, you must begin infusing positive information into your credit report that will negate past negatives such as bankruptcies, defaults and late payments, and a credit card for bad credit is the easiest tool for developing a pattern of positive credit usage. It represents the easiest option because people with bad credit have better chances of getting approved for a credit card than any other type of loan or line of credit. As a matter of fact, secured credit cards (the most widely used type of bad credit credit card) offer guaranteed approval, which means you can benefit no matter how bad your credit may be.

No matter what type of bad credit credit card you wind up getting, it will report information about your use to the major credit bureaus every month. As long this information reflects on-time payments and low credit utilization, your credit score will benefit. Additionally, it is important to note that you don’t need to make purchases with a credit card in order to benefit. Simply maintaining a credit card at zero balance and in good standing adds positive information to your three major credit reports each month.

How to get a credit card with bad credit

By: Odysseas Papadimitriou, WalletHub CEO A lot of people with bad credit routinely apply for credit cards and get rejected, causing them to wonder if a credit card is even attainable with bad credit. If this describes your situation, simply go for a secured credit card. All you must do to get such a card is provide a valid Social Security Number, declare that you have enough income to afford the monthly minimum payment (usually 3% of your balance) and most importantly be prepared to put down a refundable deposit of at least $200. In the very rare event that you get declined for a secured card, try applying for one from a different bank until you get approved. While we typically discourage multiple credit card applications in a short time frame because of the damage they can do to your credit, when you have bad credit, the benefit of getting a credit card ASAP outweighs any such damage. Besides, when you’re applying for secured cards, it’s only a matter of time before you find a bank that will approve you.

What are the different types of credit cards available to people with bad credit?

By: John Kiernan, Personal Finance Editor It’s possible to get three different types of credit cards with bad credit: secured credit cards, partially secured credit cards and unsecured credit cards for bad credit. Secured credit cards require a refundable security deposit that doubles as your credit line and protects the issuer from the threat of default, thereby making it unnecessary for the issuer to charge high fees. As a result, secured credit cards are typically a low-cost means of building credit.

Partially secured credit cards require a security deposit as well, but the credit line you receive exceeds the amount of this deposit. Therefore, spending beyond your means is a greater risk than with a fully secured credit card, and you might have to pay higher monthly or annual fees.

Unsecured credit cards are what most people think of as “regular” credit cards. While they do not require a security deposit, they tend to have low credit lines and very high fees. They also require greater discipline from users when it comes to spending since there is no security deposit to act as a safety net. What’s more, these cards are not always available, depending on the policies of the various credit card companies that cater to consumers with bad credit history.

How long will it take for my bad credit score to improve?

By: Odysseas Papadimitriou, WalletHub CEO Everyone’s credit situation is different. Some people have bad credit because of serious issues like bankruptcy and foreclosure, while others may have had problems making minimum payments. In general, however, you should see improvement in your credit score in roughly 18 months as long as no new negative information is added to your credit reports and you are maintaining 1-2 credit cards in good standing monthly. It is possible to expedite this process somewhat by opening a secured credit card and aggressively adding to your deposit over time. The more credit you have available, the greater credit score improvement you will see.

@deerhunter9340

August 31, 2016

You shouldn't have to pay money to get a card and work on your credit. Take someone like me who has no money but needs to work on my credit but can't cause I have to pay a security deposit in order to get started. It's ridiculous

Susan Paula Dax @susan paulad

June 24, 2016

This credit application was made with no response after. What to do?

Jasmine Dover @djasmine400

May 21, 2016

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Amanda Studans @amandas_34

November 12, 2015

I think that it is better for people with bad credit to get an unsecured credit card if they are able to qualify for one. A secured card is a good way to build your credit if you are unable to qualify for an unsecured card. Having to put a large deposit down can lead to having a small amount open on your card and can be hard to pay off quickly.

Jxf Ghb @jxfg

November 12, 2015

I would recommend a secured card for someone with bad credit. A close friend of mine had some bad credit due to health issues. He went with a secured card because it afforded him the ability to make easy payments , build his credit , and not over charge it. An unsecured card should only be used for dire situations.

Timothy Pollock @timothyp_18

December 28, 2015

I already have a secured card and an unsecured card

Jacoby Greene @jacoby.greene.39

November 9, 2015

As another poster has mentioned, I would recommend using a secured card that has the potential to graduate to an unsecured card. As long as you have the capital to invest, a secured card could end up providing you with a larger credit line than you otherwise would have been eligible for. Also, there are some secured credit cards that don't actually report as secured; which could give your credit rating a slight boost. If you're rebuilding, or just beginning to build you credit, I definitely recommend starting with a secured card over the likes of cards designed for those with "bad credit;" these cards have insanely high interest rates, and more fees than you count on 2 hands.… read more

Jaquetta Ramey @jaquettar

October 27, 2015

Is it possible to get a credit card with poor credit without paying a security deposit?

@WalletHub

October 30, 2015

Yes, it is possible, but we don’t recommend it unless you truly need access to an emergency line of credit. So-called unsecured credit cards for bad credit tend to charge prohibitive fees without offering much spending power in return. Nevertheless, you can check them out here: http://www.cardhub.com/credit-cards/bad-credit-unsecured/ .

If you’re mainly interested in a way to build credit, you may want to reconsider your stance on security deposits. You’ll get the full amount back if you close your account with no balance, and the presence of this deposit is the reason why you can find secured cards with no annual fee. You can compare secured cards here: http://www.cardhub.com/credit-cards/secured/ . Hope this helps.… read more

Casey Scheld @caseys_7

October 22, 2015

The Capital One Secured MasterCard is the best card for bad credit in my personal opinion. The fact that the minimum deposit for a card like this is only $49 is perfect for people who are on a budget, and the lack of an annual and monthly fee is an absolute godsend for those who are watching their money each and every month.

Jennifer Parsons @1carfamily

October 19, 2015

I think that a secured credit card would be better for people than a unsecured credit card. With a secured credit card you can have a limit that is what you put on there. That's money that you deposit. It is reported as credit though so that could help build credit I guess. I have unsecured credit cards though because I don't have the money to make a deposit.

Elspeth Hunt @elspethh1

October 5, 2015

I feel as if a secured card that has the potential to become unsecured is the best option for people who have bad credit and are actively seeking to improve their credit. It leaves less risk for the person and the company and gives them an opportunity to learn the skill of managing their money. The card that I would recommend isn't on here, but if you have the opportunity to get the secured card from Discover, I recommend it. It has the best options available with a fairly low APR.… read more

Ricky Canto @rickyc10

October 5, 2015

I think a person with bad credit should only use secured credit. Its very hard for people with bad credit to get a credit card at least this will give them a chance to better their credit history and work their way back up to a unsecured credit card.

Violet Reichert @violetr2

September 28, 2015

Things are very expensive. I am looking for a credit card that is not prepaid and has no down payment.

@WalletHub

October 11, 2015

Unfortunately, you’ll likely have to choose between expensive and a security deposit. Secured cards tend to be far cheaper for credit building because the deposit that you place is refundable (you’ll get back the full amount, minus any unpaid balances, when you close your account) and it protects issuers enough against the threat of not being repaid that they don’t need to charge high fees. Unsecured credit cards for bad credit, on the other hand, tend to be quite pricey in a non-refundable sense precisely because they do not necessitate a deposit.

Pretty much the only time you should use an unsecured credit card for bad credit is if you need an emergency loan. Most secured cards are ill-suited to that task because the spending limits they provide are usually equal to the amount of your deposit. So, if you absolutely need an unsecured card, the Credit One Visa (http://www.cardhub.com/d/credit-one-credit-card-676c/) is a decent option. But if you don’t, an offer like the Capital One Secured Card would save you more money in the long run.… read more

Elle Cab @ellec2

September 27, 2015

Getting an unsecured credit card is really hard for people with bad credit, but I think they are the best way to go. You can easily get a secured credit card if you make a deposit on it. The best thing about an unsecured credit card is that it will impact your credit more than a secured card.

Nonya Busy @nonyabusy

September 27, 2015

To me, unsecured credit cards are the best for a bad credit history. I have had bad credit when my house was foreclosed on, and had very bad credit. I feel so much more comfortable with the unsecured card, compared to the other. I know that with unsecured cards, I don't even have to put down a deposit. Its also pretty convenient that I can make a payment any time that I want to. I think it is way more convenient than secured cards. It basically has less of a risk than secured cards, and that is the best part.… read more

Cassie Spoor @cassies_2

September 12, 2015

Based on experience I would recommend an unsecured credit card with a low interest rate AND low initial credit limit as the best choice for someone who has bad credit.
As others have said, many folks with bad credit can't afford to put a chunk of money down in advance. If they could do that, they would simply be paying cash. Also, secured credit cards do not impact your credit history the same way that correctly managing a traditional card. The goal for everyone should be to have as good a credit rating as possible. The best way to do that is with on time payments (preferably in full) with a traditional unsecured credit card.… read more

Wendy Byers @wendytwendola

September 12, 2015

Based on experience I feel that a secured credit card company is best for people that have had bad credit. Less of a risk for the company and less of a risk for the consumer that is using the credit card. I think it is best for people to put money down, I think they manage their credit card use better while they are realizing it is their money that will be lost if they don't pay on it anymore. And at the same time they can earn having good credit back based of their timely payments made each month. I actually prefer a secured card.… read more

Hy Man @hym

September 11, 2015

I put a hurting on my credit right after getting out of college. It took me a long time to work through it and get myself back into a good financial condition. For that reason I do not like having a credit card but I feel it is a necessity to have one if an emergency happens. So I keep it deep in my wallet and use will power to keep it there. I use a debit card for all my purchases otherwise.… read more

Allie Bentley @allie.bentley.568

September 6, 2015

If you have bad credit, I think the better choice is to get a secured credit card. Your initial deposit may take some saving up, but overall it is easier to get approved when you have a deposit. The deposit can help you learn to manage your finances better, because it limits what you can spend to what you have. As your credit score improves, you can put in additional funds to increase your spending limit. A secured credit card will not only be a lesson in money management, but also help rebuild your credit profile overall.… read more

JT Gatewood @jtg1

September 6, 2015

I would actually recommend an unsecured card for someone with bad credit. With an unsecured card, you do not have to put down a cash deposit. For someone who may be living from paycheck to paycheck and who is strapped for cash during certain times of the month, this is beneficial. Also, many secured cards do not offer any rewards, where unsecured cards typically do. You get more bang for your buck with an unsecured card and as long as you pay your balance on time, you work towards access to a higher credit limit with the card.… read more

Shelli Wiley-Meyers @shelliw_1

September 1, 2015

I believe that the best card for a person with poor credit is a secured card. The amount that card companies require to secure a card often differ between people, depending upon a person's individual credit score. Secured cards are a great way for a person with poor credit to work on rebuilding their credit scores. Limits usually start low, so that a person can learn to manage a credit limit. The card company has a good-faith payment by means of the security deposit.… read more

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