The 6 Best Credit Cards For Bad Credit

By Ronald Kimmons. May 7th 2016

If you have a poor credit score – that is, a FICO score below 600 – you may try to avoid using credit cards at all costs. This could be because credit cards got you into your credit score troubles in the first place. However, the bottom line is that if you want to rebuild your credit profile, you have to do things that positively affect your credit score. One of the easiest ways to improve your credit is to get a credit card, use it and make your payments on time. While credit cards for people with poor credit may come with higher interest rates and fees than other cards, they are available and the higher interest rates will not negatively affect you if you use the credit cards wisely.

It is important to note that giving a credit card to someone with bad credit is risky. One way that credit card providers get comfortable giving their cards to people with poor credit is by offering them secured credit cards. These credit cards require cardholders to pay a security deposit up-front to secure the credit limit. This way, if a cardholder does not make payments, the card provider keeps the security deposit. The credit limits for secured cards usually range between 100 and 200 percent of the security deposit amount. Sometimes, card providers offer both secured and unsecured options to individuals with poor credit. In these cases, secured cards come with lower fees and interest rates.

As with other credit cards, the market for credit cards for people with bad credit is quite large. Many options are available and while virtually all of them are expensive, some are better than others. Here is a list of some of the best credit cards on the market for people with bad credit.

Orchard Bank MasterCard

The Orchard Bank MasterCard is a credit card designed for the purpose of providing an option for people who want to rebuild their credit. It comes in secured and unsecured options. The unsecured interest rate ranges from 14.99 to 24.99 percent. The secured card requires an up-front payment of $200 and has an interest rate of 7.99 percent. Annual fees range from $0 to $59. Processing fees also range from $0 to $59. Orchard Bank provides email and text message updates to help cardholders remember to make timely payments.

Capital One Secured MasterCard

Capital One is one of the world’s leading credit card providers. In addition to the other credit card options that the company offers, Capital One provides a secured MasterCard option for people with bad credit. The minimum up-front security deposit is $49 and the credit limit ranges from $200 to $3,000. Whatever your limit is, you may increase it by submitting an additional security deposit. It comes with a $29 annual fee and a variable APR of 22.9 percent.

BankAmericard Secured Credit Card

To serve people with sub-par credit, Bank of America offers a secured Visa card. As with other secured credit cards, this card requires an up-front security deposit. The interest rate is a variable 20.24 percent and the credit limit can be anywhere from $300 to $4,900. (The credit limit varies depending upon your income and the size of your security deposit.) The annual fee for this card is $39.

Applied Bank Gold Visa

Applied Bank offers some of the most affordable secured credit cards in the industry. While its Platinum Visa card with 0 percent APR requires a good credit score, its Gold Visa card does not require a credit check. The limit ranges from $200 to $5,000 and it is always exactly as much as your security deposit. The APR for the Gold Visa card is 9.99 percent. Unlike the APRs for many credit cards, this rate is fixed. Approval for the card is guaranteed.

Open Sky Secured Visa

Open Sky offers a secured Visa card with a credit limit from $200 to $3,000. The credit limit is determined by the security deposit. The card does not require a credit check for approval and the annual fee is $50. The APR is a variable 14.25 percent. (It can go as high as 18.25 percent if you fail to make a payment or exceed your credit line.)

Credit One Visa Platinum

The Credit One Visa Platinum is an unsecured credit card designed for people with poor credit. The starting credit line is $1,500, but this may increase automatically as you show that you are able to responsibly make payments. The card also comes with other perks such as travel accident insurance and an auto rental collision damage waiver. The APR is 23.90 percent and the annual fee is $75 for the first year and $99 after that. The fees for this card are relatively high, but that is largely because the balance limit is high as well. This can be either good or bad. As long as you keep it paid down, this card can go a long way in helping to rebuild credit.

In shopping for your new credit card, think about what you are willing to accept when it comes to fees and interest rates. If your goal is to build credit at the lowest possible cost, the best plan is to go with a card with low flat annual fees and avoid paying interest by paying off the entire balance every month. However, if you are simply looking for a card that you can use to make purchases that require a card, you should probably consider getting a prepaid card instead. These are just as convenient as credit cards, and they do not come with the same fees. The only disadvantage is that they do not help to build your FICO score.


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