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Best Credit Card Options for Bad Credit Scores. Build Your Credit Responsibly.

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Credit cards for bad credit are ideal to help people whose credit scores are between 300 and 639. Also, with these types of products you can rebuild your history and opt for better offers in the future. The best cards in these cases have annual fees as low as $0. In fact, some offer rewards equal to 1% cash back or more on most purchases. All issuers of these cards comply with making credit reports on a monthly basis. These reports are issued directly for subsequent approval in the credit bureaus, this is a recurring process (sometimes sponsored). This point is very important as it guarantees you the possibility of rebuilding your history and opting for better cards when you have increased your score. The correct credit card for most people with bad credit will be a secured card. Secured credit cards charge lower rates and offer better approval odds. However, in case you need loans you will have to resort to cards without guarantees. In the end, the product ordered will depend solely on your specific needs.

Types of Credit Card for bad credit

Guarantee Cards

These are the most popular and recommended credit cards for people with bad credit. These types of products are different from conventional credit cards since they require a deposit as a guarantee. This deposit is refundable and is ideal for opening your bank account. Likewise, by making a deposit you are showing that you have better opportunities for the approval of your request. These types of cards are used by those who need to improve or establish their credit record. A financial product with guarantee, report your payment history to the 3 main credit bureaus in the United States. By using these cards responsibly, you can quickly improve or build your credit history.

Non-Warranty Cards

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This is the second major ranking for credit cards of this type. These are cards very similar to conventional credit cards. In this case, you should not make any deposit as a guarantee for the request. Therefore, they are a bit more difficult to qualify for when you have bad credit. With this option, you apply to cards with lower benefits and much higher interest rates. This can be a good alternative for those seeking access to a no deposit line of credit. Finally, these cards tend to have lower interest rates than personal loans for people with bad credit; in addition, they are much safer and more reliable.

Before requesting these types of cards, it is important to consider the following recommendations:

  • You must be up to date on all late payments. These types of credit cards will not be approved for applicants with recent delinquency.
  • Compare the rates of all your options. The best credit card of this type will have a low cost. On the other hand, one way to keep costs down is to find a card with low (or no) annual fees, monthly fees, and one-time fees.
  • Always try to pay your bills in full, this way you will avoid interest charges.
  • Look for secured card options, these products will guarantee a high probability of approval. Secured credit cards offer the best chance of approval because they require a security deposit to act as your line of credit.
  • Secured cards are not always approved. These products work under guaranteed approval, but most will still run a legal credit check. In fact, certain items on your credit report can disqualify you. If you are looking for a secured card that does not do a credit check, you can opt for the OpenSky® Secured from Visa.

Remember that it will always be important to take the time to compare the offers of these types of products, depending on the credit card you are looking for. If you still don’t know which one to choose, and you are still evaluating options to improve your credit history review our other pages regarding credit options designed to help build or rebuild low credit scores.

Frequently Asked Questions (Q&A)

Q: What does “bad credit” mean?

A: Bad credit is generally defined as a credit score below 630. The credit scale ranges from 300 to 850 points. These scores are able to measure the risk of lending money to someone. Therefore, the higher the risk, the lower the score. Common mistakes such as: Lack of multiple payments, accounts to the maximum, invoices delivered to collection agencies, etc., will damage your credit history.

Q: I don’t have a credit history yet. Is that considered bad?

A: In many respects, not having a history is equivalent to bad credit, you are also considered a greater risk because you have not yet demonstrated your ability to handle money loans.

Q: Can I get a credit card if I have bad credit?

A: Yes, it is no secret that multiple issuers have cards designed specifically for people with bad credit. These cards are generally described as “products to rebuild your credit.” Cards of this type do not offer rewards or advantages, they charge high interest rates and some of them have high costs.

Q: Are Secured Credit Cards My Only Safe Option?

A: A secured card is not your only option if you have bad credit. However, it may be the best offer you get. Some issuers offer regular “unsecured” cards for people with bad credit; however, it is not a good idea as it represents a higher risk with a deposit that you cannot get back.

Q: What do I need to request this type of card?

A: You must be at least 18 years old and have a Social Security number to be considered for a credit card. In addition, you need as a fundamental requirement, the approved American residence. In most cases, (not applicable for everyone) you need a bank account.

Best Secured Credit Cards for People with Bad Credit

If you have bad credit, or no credit, you probably already know how difficult it can be to qualify for a new credit card. Fortunately, many companies offer guaranteed cards for people in this situation. When used responsibly, the major secured credit cards help you build or rebuild your credit history and improve your credit score.

Here are the top 2 secured credit cards for bad credit:

  1. State Department Federal Credit Union Savings Secured Platinum Visa: With a fixed APR of 7.74%, Savings Secured Visa Platinum currently has the lowest interest rate. And like a bonus, it doesn’t require income verification or a credit check. If you occasionally need to keep a balance, this card can keep your interest payments low.

Advantages:

  • The State Department Federal Credit Union Savings Secured Platinum Visa has an APR of 7.74%, one of the lowest rates around among guaranteed cards.
  • Savings Secured Visa Platinum offers the opportunity to earn Flexpoints rewards, which you can redeem for travel, tickets, merchandise, gift cards, charity, and other items.
  • Your credit limit with this card is protected by the money in your savings account.
  • There is no income verification or credit check with this card.

Disadvantages:

  • The main drawback of this card is that it requires joining as a member to open a credit account. You can enroll if you are an employee of the United States Department of State, if you are an employee or affiliate with organization affiliations of the credit union, if you are an immediate family member of a member, or if you are a member of the American Consumer Council.
  • Requirements, fees and APR: In addition to the 7.74% fixed APR for purchases, this card has a late payment fee of $25 and a minimum interest surcharge of $0.50. There are no annual fees.

2. Capital One Secured MasterCard

The Capital One Secured MasterCard is one of the few guaranteed cards that allows you to make a guarantee deposit less than your credit limit. This makes this the best card for those with a fixed income who cannot pay their deposit in advance. In fact, this card allows you to pay your deposit in installments, as long as the total amount is paid within 80 days of its approval. If you pay the minimum required deposit, based on your creditworthiness, you will get an initial credit line of $200.

Advantages:

  • This card offers a starting line of credit of $200 for a deposit of $49, $99 or $200. The amount of deposit required depends on creditworthiness. You can deposit more before you open the account for a higher limit – up to $3,000.
  • After making your first five monthly payments on time without needing an initial deposit, you can raise your credit line.
  • Capital One’s CreditWise® program is included with this card, which gives you access to your credit score and offers tools to help you monitor your credit.

Disadvantages:

  • This card has a variable 24.99% APR, higher than the other guaranteed cards on this list. If you usually have a balance, this is not the best card for you.
  • There are no rewards with this card, something you can find on a variety of other guaranteed cards.

Requirements, fees and APR: Although the Capital One Secured Mastercard has a relatively high variable APR of 24.99%, it has no annual fee. The late fee is $35 Disadvantages:

What Are Gas Credit Cards?

There are many gas credit cards available in the market today, with varying features and benefits. Some of these gas credit cards offer a good sign-up bonus and cash back rewards; others give certain discounts on gas when used at designated gas stations or partner locations. Some even provide fee waivers and travel perks similar to the rewards you would expect from a “travel credit card“, making them excellent options for frequent travelers who need reliable transportation. As such, choosing from so many great offers may seem like a daunting task; however, it is worth noting that if you find one gas credit card that suits your needs, it may be well worth sticking with it. Gas cards credit cards typically can be used like a normal credit card in that you may make purchases for other non gas related products or services wherever Visa or MasterCard is accepted but you stand to gain the most in points and savings if you dedicate these types of cards to fuel related purchases which is always easier if you happen to own more than one credit card.

How Do Gas credit Cards Work?

Gas cards credit cards can generally be classified into two types:

  • Gas Rewards Cards – Gas rewards cards are the type of gas credit card that will give you points every time you buy gas with the card when gas prices are high.
  • Gas Rebate Cards – Gas rebate cards use a different approach to get you gas savings: You receive money back in real time as soon as you make gas purchases using your gas credit card. Additionally, there is yet another category of gas credit cards—the elite membership ones – which offer luxury travel perks such as airport lounge access and free hotel stays.

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