Best credit cards for people with bad or poor credit

Best Credit Cards for Bad Credit of 2018

Unfortunately, bad credit and problems with getting a credit card go hand-in-hand. The irony is that one of the quickest ways to build good credit is by getting a credit card. So what can you do about this catch-22?

In most cases, the answer to improving bad credit is to get a secured credit card. Such credit cards feature a credit line that is secured by a deposit you make with the bank that issues your card. The deposit is refundable when your credit improves and you close the account in good standing.

Your credit limit is often the amount of money that you deposit, although this can vary. For instance, if you deposit $500, you get a credit line of the same amount. If you fail to pay your bill, the credit card issuer takes the money from your deposit.

Secured credit cards work like any other card. You can use them wherever credit cards are accepted, and you pay interest if you don’t pay off the balance. When you pay your secured credit card as agreed, you rebuild your credit over time. Eventually, you would become eligible for a regular unsecured card that doesn’t require a deposit.

There are some credit card issuers that offer unsecured cards that don’t require you to put down a deposit. Such cards aren’t usually a good choice, though, because they tend to have very high interest rates and fees.

What about prepaid debit cards?

Though they are similar to secured credit cards, prepaid debit cards aren’t an ideal choice for building credit. With these cards, you also put up money, but that money is put directly onto the card. While you get the convenience of having a credit card, you don’t benefit in terms of building your credit.

Rather than borrowing from the credit card issuer, as you do with a secured credit card, you use the money you put down as a deposit. This doesn’t help build your credit, but in essence, works the same way as a gift card.

Best Credit Cards for Bad Credit

The following secured credit cards are fairly easy to qualify for and help you build much-needed credit.

USAA Secured Card American Express®

A Fortune 500 company that offers insurance and banking and investments to military members, veterans and their families, USAA features the USAA Secured Card American Express®. With this card, the size of the credit limit is generally reflected in how much of a security deposit you put down. USAA deposits your money, which can be anywhere from $250 to $5,000, in an interest-yielding 0.54% annual percentage yield (APY) two-year CD.

This card features a variable annual percentage rate (APR) of 10.40% to 20.40%, depending on your credit and payment history. The same rate applies to purchases, cash advances and balance transfers.

Pros:

  • Competitive interest rates of 10.4% to 20.4% APR
  • Same rate applies to all types of transactions, including purchases, transfers, and cash advances
  • You earn interest on your deposit through a CD
  • If you are eligible to be a USAA member, you are likely to qualify
  • You can get up to $5,000 credit

Cons:

  • $35 annual fee, plus a 3% fee on balance transfers and cash advances. (Fee waived if the cash advance is transferred to a USAA deposit account. First late or returned payment of every six billing periods is only $25.)
  • You can’t get the card if you aren’t eligible for USAA membership

Secured Mastercard from Capital One


The Secured Mastercard from Capital One features a security deposit of $49, $99 or $200, which is refundable. If you make the minimum required security deposit determined by the company, you’ll get an initial credit of $200. After you make at least five monthly payments on time without needing to increase your credit line with a deposit, you qualify for a higher credit line.

The interest rate for this card is 24.99% APR. There is no annual fee. You also enjoy free unlimited access to CreditWise, which provides credit scoring and credit monitoring tools.

Pros:

  • No annual fee
  • Access to a higher credit line once you make five monthly on-time payments
  • Free access to credit scoring and monitoring tools
  • Platinum Mastercard benefits that include extended warranty at no charge for items you purchase with the card, as well as auto rental insurance, travel accident insurance and roadside assistance

Cons:

  • Interest rate of 24.99% APR is higher than some secured cards
  • 3% cash advance fee with a minimum fee of $10
  • Late payment fee of $35

First Progress Platinum Elite Mastercard Secured Credit Card


With the Platinum Elite Mastercard Secured Credit Card you can get a credit limit of $200 to $2,000. The limit must be backed by a security deposit of the same amount. This card features a 19.99% APR for purchases and a 24.99% APR for cash advances. If you get cash, you also pay $10 or 3% in fees, whichever is the greater amount. The annual fee is only $29, but late payment fees are $38 and returned payments cost you $27. This card reports to the three main credit bureaus, which means you can build credit fairly quickly, as long as you pay on time.

Pros:

  • You can get up to $2,000 of credit line, as long as you have the money to secure the card
  • The annual fee is low at $29
  • This credit card provider reports to all three credit bureaus

Cons:

  • Any credit you receive must be fully backed by the same amount in a deposit
  • 19.99% APR for purchases and 24.99% APR for cash advances, including fees
  • Late payment fee of $38 and returned payment fee of $27

UNITY Visa Secured Credit Card


The UNITY Visa Secured Credit Card accepts anyone who has the cash to make a deposit equal to the credit line and pay an annual fee. Credit limits vary from $250 to $10,000. This is a substantially higher credit limit than many of the other secured cards.

This credit card issuer also reports to all three credit bureaus, which helps you build credit faster. The APR for purchases, balance transfers and cash advances is 17.99%. For the first six months, there’s a 9.95% APR introductory rate on balance transfers. This card also features a $39 annual fee that is waived for the first year.

Pros:

  • As long as you have money to back it up, you can get a high credit limit
  • Six-month introductory 9.95% APR on balance transfers
  • Annual fee waived the first year
  • Reports to all three credit bureaus
  • Low penalty payments of $10 for late payments and $25 for returned payments

Cons:

  • 17.99% APR is high, considering you have backed the money with a deposit
  • $39 annual fee after the first year
  • 3% fee on cash advances and balance transfers. Minimum of $10 and maximum of $150
  • 2% foreign transaction fee
  • Other fees, including a $10 credit limit increase fee and a $1 phone assistance fee

Tips for making the most of your new secured card

They may require a deposit, but secured cards can help you rebuild your credit. Many borrowers find that if they spend carefully and pay the balance off every month, they improve their credit score enough to qualify for an unsecured card within about a year.

If your credit card issuer also has unsecured cards, when you’re ready, see whether you can transfer your secured line of credit to a new card. This will be better for your credit because it won’t mean opening open up a new account. Doing so can lower your credit score. When you do qualify for an unsecured credit card, celebrate your success at having raised your credit score.

Unsecured credit cards for bad credit

If you don’t have the funds for a secured credit card deposit, there are a few unsecured credit cards for bad credit. These options are more expensive in the long run if you don’t pay off the balance each month because of high interest rates. They also tend to charge high annual fees.

Use unsecured credit cards wisely by paying the balance off each month and you can rebuild your credit. Here are a few good choices of unsecured cards.

Unsecured Cards for Bad CreditAPRAnnual Fee 
23.9%*$99Apply
23.9%*$35 to $75 depending on credit profileApply

Credit One Bank Cash Back Credit Card


Designed for borrowers with poor credit, the Credit One Bank Cash Back Credit Card unsecured card features interest rates from 16.99% to 24.99% APR. Although these rates are high, they are lower than some unsecured credit cards geared for bad credit. There could be no annual fee or one up to $99, depending on your credit history. You get 1% cash back on grocery, gas, phone and cable purchases, and you also might get 1.1% cash back on dining, depending on your credit.

Pros:

  • 1% cash back on purchases, including groceries, gas, phone and cable
  • 1.1% cash back on dining, in addition to 1% on purchases, depending on credit
  • Though high, interest rates are among some of the lowest of credit cards for bad credit
  • No annual fee possible, depending on credit history
  • Free credit score tracking and email alerts

Cons:

  • Annual membership of up to $99, depending on credit history
  • High APR from 15.90% to 24.40%
  • Cash advance fee is $5 and 8% of the amount, or $10 and 3% of the amount, whichever is greater
  • $37 fee for late payments
  • $35 fee for returned payments

Indigo Platinum Mastercard


Ideal if you have poor to fair credit, the Indigo Platinum Mastercard allows you to rebuild your credit. The company reports monthly to all three credit reporting agencies. The interest rate is high at 23.9% APR, and cash advances are 29.9% APR. That means carrying a balance on this card can be pricey. There could be no annual fee or one up to $99, depending on your credit.

Pros:

  • No annual fee possible, depending on credit history
  • Ability to prequalify without the lender pulling your credit report
  • No cash advance fee in the first year
  • Offers Mastercard gold benefits, including MasterRental coverage, road and travel assistance

Cons:

  • High 23.9% APR on purchases
  • High 29.9% APR on cash advances, although no fee for the first year
  • $99 annual fee possible, depending on credit
  • $37 late, over-the-limit and returned payment fees

Milestone Gold Mastercard

Created for people with poor credit who want to rebuild it, the Milestone Gold Mastercard allows you to prequalify without a check to your credit. The company also reports to all three credit reporting agencies monthly. This card’s APR is high at 23.9%. After the first year, there is a cash advance fee of 29.9% APR. There’s also an annual fee that ranges from $35 to $75 the first year and increases to $99 thereafter.

Pros:

  • Ability to prequalify without the lender pulling your credit report
  • No cash advance fee in the first year
  • Offers Mastercard gold benefits, including MasterRental coverage, road and travel assistance

Cons:

  • High 23.9% APR on purchases
  • High 29.9% APR on cash advances, although no fee for the first year
  • $35 to $75 annual fee the first year, depending on your credit; $99 thereafter
  • After the first year, cash advance fee of $5 or 5%, whichever is greater
  • Foreign purchase fee of 1%
  • $37 fee for late and returned payments
  • $35 over-the-limit fee

Total VISA® Unsecured Credit Card


Designed for individuals with bad or no credit, the Total VISA® Unsecured Credit Card allows you to improve your credit score. Though you don’t have to come up with a deposit as you do with a secured card, the fees are high with this card. They include a one-time $89 processing fee, an annual fee of $75 and a 29.99% APR on purchases and cash advances.

Pros:

  • Reports to all three credit bureaus
  • Lax eligibility requirements, making it possible for just about anyone to qualify

Cons:

  • High 29.99% APR on purchases and cash advances
  • One-time annual processing fee of $89
  • Annual fee of $75 that drops to $48 in subsequent years, but tacks on a monthly $6.25 service fee, raising the annual cost to $123
  • 5% cash advance fee (minimum $5)
  • $37 fee on returned and late payments
  • Initial credit line is only $300

For information and examples of some of the best secured and unsecured credit cards for bad credit, see SuperMoney’s Personal Credit Card Reviews.

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