You don’t have too many credit card options when you have bad credit. One solution is to get a secured credit card, which requires a refundable deposit before an account can be opened. If you want an unsecured card, then there are a few good choices. In both cases, be prepared to deal with high interest rates, low credit limits, substantial annual fees, and more. This reflects the greater risk of loaning money to individuals who have had serious financial difficulties. But when you use these cards responsibly, you can quickly improve your credit, and will be able to qualify for a different card with more favorable terms in the future.
Unsecured vs. Secured Credit Cards
There are both unsecured and secured credit cards for bad credit that can help you rebuild your credit. The primary difference between the two types of cards is secured credit cards require a security deposit, usually at least $200, that the card issuer holds in case you default on your account. In exchange, you get a credit card with a limit in the amount of the security deposit that you can use as you would any credit card. Some credit card issuers will refund your security deposit after you manage your account responsibly for a certain amount of time, and allow you to continue using the card as an unsecured card.
On the other hand, unsecured cards for bad credit don’t require a security deposit. However, because they are designed for those who may have had credit problems in the past, these cards typically carry higher APRs and higher fees, sometimes even higher than the fees you will find with secured credit cards. In both cases, the APR can be, at least, 20%, making it even more important, in either case, to pay your balance in full every month.As you use your unsecured or secured credit card, the card issuer reports to the credit bureaus, which, if managed responsibly, can help you establish a better credit rating. As your credit score increases, you will be able to qualify for credit cards with lower fees and lower interest rates.
These are the best credit cards that you can be approved for, when your credit is bad, that can help you increase your credit rating.
Best Unsecured Credit Cards for Bad Credit
We’ve only listed two unsecured options because these are the best (and you’re likely to qualify for them). Most unsecured cards that offer credit to those with bad credit have higher interest rates, annual fees, and even application and maintenance fees added on top of that. If you are looking for unsecured options, these two are the best choices.
Capital One® Platinum Credit Card
The Capital One Platinum Credit Card is a popular unsecured card option for those who have lower credit scores. It is one also one of the best unsecured cards available for average or poor credit because it has no annual fee, no balance transfer fee, and no foreign transaction fees, which is rare with cards for low credit ratings. Plus, you may qualify for a credit limit increase after making your first 5 payments on time.
Highlights of the Capital One® Platinum Credit Card
- No security deposit
- No annual fee, balance transfer fee, or foreign transaction fees
- 24.99% variable APR
Click here to learn more and apply for the Capital One® Platinum Credit Card today!
Indigo® Platinum Mastercard®
If you aren’t sure if you will qualify for an unsecured card, you can see if you prequalify for the Indigo® Platinum Mastercard® without it affecting your credit report. The annual fee for the card is dependent on your credit worthiness. You could qualify for no annual fee, a $59 annual fee, or an annual fee of $75 the first year and $99 per year after that. This fee and any other set up or maintenance fees are deducted from the credit limit you begin with on the card.
Highlights of the Indigo® Platinum Mastercard®
- See if you prequalify first
- No security deposit required
- Annual fee $0-75; $99 after
- 23.9% fixed APR
Click here to learn more and apply for the Indigo® Platinum Mastercard® today!
Milestone® Gold Mastercard®
The Milestone® Gold MasterCard® offers a quick pre-qualification and the ability to choose a custom card design. The standard interest rate for purchases is a fixed APR of 23.9%. Depending on your credit profile, they can offer you one of three cards, each with a different annual fee.
Highlights of the Milestone Gold
- No security deposit required
- Annual fee between $35 and $99
- 23.9% fixed standard APR
Click here to learn more and apply for the Milestone® Gold Mastercard® Credit Card today!
Best Secured Credit Cards for Bad Credit
We’ve also listed our favorite secured credit cards — even though you need to leave a security deposit, they may end up being the more economical option. Plus, there are more secured cards for bad credit available than unsecured cards. If you don’t qualify for an unsecured card, these secured credit cards are among the best available for rebuilding or building credit.
Capital One® Secured Mastercard®
The Capital One® Secured Mastercard® is our favorite secured credit card. The interest rate is 24.99% variable and like all Capital One credit cards, there are no foreign transaction fees. You may also get your credit line raised without having to add more to your deposit. Best of all, there is no annual fee.
Highlights of the Capital One Secured Mastercard
- No annual fee
- No foreign transaction fee
- 24.99% variable APR
- Credit limit increase without additional deposit
Click here to learn more and apply for the Capital One® Secured Mastercard® today!
primor® Secured Visa® Gold Card
Need a credit card with a low APR? The primor® Secured Visa® Gold Card is your best bet, with a 9.99% fixed APR. It’s never ideal to keep a balance on our card, but if you have to, you can’t beat 9.99% if you have trouble getting approved for a standard low interest credit card. The annual fee is $49 and your deposit accrues interest. Note that this card does charge various fees for different types of account activity, so be aware of those before you sign up.
Highlights of the primor Secured Visa® Gold
- Fixed 9.99% APR
- $49 annual fee
- Deposit earns interest
Click here to learn more and apply for the primor® Secured Visa® Gold Card today!
OpenSky® Secured Visa® Credit Card
The OpenSky® Secured Visa® Credit Card has an annual fee of $35 and 18.39% variable APR. It requires a deposit of $200 to $3,000 which will be your credit limit. Additionally, you may be approved for a credit line increase if you maintain good standing. There’s no credit check needed so your credit won’t be affected if you apply. This is a strong option if you can’t get approved for other cards.
Highlights of the OpenSky Secured Visa
- No credit checks
- $35 annual fee
- 18.39% variable APR
- Credit line increase if you maintain good standing
Click here to learn more and apply for the OpenSky® Secured Visa® Credit Card today!
USAA Secured Card® Platinum Visa®
The USAA Secured Card® Platinum Visa® provides military personnel and their family members an opportunity to build or rebuild their credit. This card requires a security deposit of $250 to $5,000, which is held in a two-year CD which earns interest. In addition to the military benefits you get as a USAA member, you can also enroll in credit monitoring services for six months free. The annual fee is $35 per year.
Highlights of the USAA Secured Card® Platinum Visa®
- Security deposit earns interest
- $35 annual fee; no foreign transaction fee
- Variable APR of 10.90% – 20.90%
Click here to learn more and apply for the USAA Secured Card® Platinum Visa® today!
Additional Tips for Rebuilding Bad Credit
In addition to getting either an unsecured or secured credit card for rebuilding bad credit, you can work to improve your credit score over time by keeping the following tips in mind when you use your cards.
- Check credit reports annually and correct any errors
- If you have to carry a balance and pay interest, choose the card with the lowest APR available
- Always make your payments on time
- Keep balances manageable
- Enroll in credit monitoring to keep an eye on your credit score and credit reports
- Avoid extra rewards and benefits if the card has extra fees or if you have to carry a balance