Having a low credit score can be frustrating. And costly. Not only will certain opportunities
(financial or otherwise) be almost impossible, but the ones you do qualify for will actually be
more expensive. Does it make sense to actually charge more money to people who are likely to
have less of it? Not really, but that’s how credit scores work.
If you’re suffering from bad credit, don’t panic. There are still ways for you to get a credit card.
Some require a security deposit, while others may not. You won’t receive a high credit limit, but
you have to start somewhere, right?
These cards are designed for those with credit scores of 580 or less. The good news is that they
will help you build your credit back up. After a year or two, you may likely qualify for a standard
(ie, less costly) card.
Discover it Secured
We’ll start with a popular secured credit card, the Discover it Secured. You don’t even need to
have a credit score to apply, so approval is almost guaranteed. It comes with no annual fee and
even has a decent rewards program – something not every secured credit card features.
The interest rate of 25.99% APR is high, but that’s unfortunately par for the course when it
comes to having bad credit.
To establish a credit limit, you’ll have to make a cash deposit of at least $200. Your credit limit
will match your deposit, dollar for dollar. After seven months, Discover will automatically review
your usage to determine if you can transition to an unsecured card.
Credit One Bank Platinum Visa for Rebuilding Credit
This credit card for those with bad credit actually isn’t a secured card. That means you don’t
have to fork over a deposit in order to be approved. However, unlike most other secured cards,
the Credit One Bank Platinum Visa for Rebuilding Credit does come with an annual fee – $75
for the first year, and $99 annually thereafter (billed monthly).
The payoff for that annual fee? A blanket 1% cashback on gas and grocery purchases, and
select telecom utilities. The interest rate is a 24.74% variable APR. There’s no welcome bonus
or introductory APR, and it doesn’t allow balance transfers.
Basically, if you need a credit card but don’t have the money to make a deposit for a secured
one, this is the card for you. The annual fee is easier to swallow when it’s billed monthly. Credit
One will automatically review your account to see if you qualify for increased credit limits. Use
this card responsibly for a bit and your credit score may climb high enough that you don’t need
to use it at all anymore.
Capital One Platinum Secured Card
The Capital One Platinum Secured Card has one extra perk that makes it stand out from other
secured credit cards. You can put down a deposit as low as $49 or $99, and still start with a
$200 credit limit. That makes it much easier for those with bad credit to obtain this no annual fee
card.
What’s the catch, you ask? No welcome bonus, no reward program to speak of, and a painful
28.49% variable APR. On the other hand, this is a pretty much the cheapest way to get started with a secured credit card. After six months, Capital One will start reviewing your account to see
if you qualify for an unsecured card.
Chime Credit Builder Visa
The Chime Credit Builder Visa card is a credit card, but also isn’t really a credit card. Yeah, it’s
confusing, so allow us to explain. It functions exactly like a credit card, but the credit limit is tied
to a linked (and required) Chime bank account. That account, which you can add to at any time,
acts like a security deposit on a secured credit card does.
Simply put, the card won’t let you purchase more than you have in the secured account. It acts
more like a debit card, but is still functionally a credit card. That means your payments will be
reported to the credit bureaus and will (probably) cause your credit score to go up.
There are no rewards, no annual fees, and even no interest rate (remember, you can only use it
to buy things you already have the money for, which is then automatically paid for). One thing to
keep in mind, though: Chime is not a bank. Rather, they are a financial technology company.
OpenSky Secured Visa
The good thing about an OpenSky Secured Visa is that they don’t even do a credit check when
you apply. All you have to do is prove that you earn a regular income of some sort. One of the
big positives with this card is that you’ll find out almost instantly whether you were approved or
not.
After that, you can make a minimum $200 security deposit to get started. (You don’t even need
a bank account, as you can send it via wire transfer, check, or money order.)
OpenSky will consider you for credit limit increases after six months. Best of all, they won’t ask
for additional security deposits if they do raise your limit. Unfortunately, this card doesn’t directly
transition into an unsecured card at any time. You’ll have to apply for a whole new card when
your credit is good enough.
This card does come with a $35 annual fee, which is the lowest we’ve seen (that wasn’t $0, that
is). That helps offset the 19.64% variable APR, which is lower than many other credit cards for
those with bad credit.
