Best Credit Cards for Bad Credit | Unsecured Credit Cards | Roost
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Best credit cards for bad credit 

Compare credit cards for those who have bad credit or no credit at all

Bad credit? Maybe you hit hard times. Or maybe you just had way too much fun in the past and are paying for it now. Either way, you can improve your credit situation. If you’ve been turned down for a credit card from your bank and other popular card companies, you may benefit from looking to establish your credit using a credit card designed for those with bad or no credit — either secured or unsecured. 

The terms are not great (as the name implies), and you may be required to get a secured card to start,  but if you have a credit score between 300-600, then here are a few cards along with tips to help you rebuild your credit. 

Best credit cards for bad credit compared

We looked at hundreds of credit card options and picked three that service people with bad credit: 

When reviewing these credit cards, we compared interest rates, one-time fees, annual fees, monthly fees and grace periods. If you plan to accept a card offer, carefully read the fine print that may spell out other types of charges such as late fees, penalty rates, cash-advance fees, credit limit increase fees, and more that you’ll want to try to avoid.

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Interest Rate34.99%
Annual Fee$75 first year, $48 after
Monthly Fee$0 first year, $6.25 after
One-time FeeUp to $95
Grace Period21+ days
This image has an empty alt attribute; its file name is image-3.png
Interest Rate35.99%
Annual Fee$75 first year, $48 after
Monthly Fee$0 first year, $6.25 after
One-time FeeUp to $95
Grace Period21+ days
Indigo
Interest Rate24.99%
Annual Fee$0-$99 first year, $99 after
Monthly Fee$0
One-time Fee$0
Grace Period25 days

How are these credit cards different?

Credit cards for bad credit do not come with the best terms as you might expect. If you acquire one of these cards, use them carefully until you can get a card with better terms. Besides a higher interest rate, they may also charge you,

  • A one-time “program” fee
  • A monthly fee
  • An annual fee

They deduct these fees from your available credit balance, which can quickly deplete your available credit line. For example, if your credit balance is $300 and you have to pay a $99 program fee, your balance is already down to $201 before you even use the card. If this is the case, it is best to pay off the $99 balance within the grace period to help keep your debt to available credit ratio low.

If you are a student, you may want to consider a credit card for students.

How to get a credit card with bad credit

  1. Apply to one of the above cards or look for a card that advertises “bad credit” or “rebuilding” credit. 
  2. Like most credit applications, you’ll need to fill out an application with your contact information, Social Security number and job information. 
  3. Your credit will be checked
  4. If it’s a secured card, you’ll need to make a deposit from your bank account or prepaid card. Sometimes they want this ahead of approval, but if you are not approved, then they’ll refund it. 
  5. Get approved! 

If you can not obtain credit approval, you may be able to work on your credit by getting a secured credit card or co-signer.

• Bad/Fair credit cards

Some credit card companies offer card options that can help you build or rebuild your credit. These credit cards may not have the best terms, but if you use them carefully, you can improve your credit. Once your credit is improved, you can apply for a card with better terms in the future. In the meantime, a secured credit card may be your best option. 

• Unsecured vs. secured credit cards

An unsecured credit card does not require you to fund it or “pay a deposit” to get it. A secured credit card requires you to pay the creditor a deposit before they extend credit to you. For example, if you pay $500 towards a secured credit card, your credit limit is $500. The credit card company holds your $500 to ensure that they will receive payment from you should you default. If this is the only kind of card you can get, you can start to build your credit by charging small amounts to the card and paying it off monthly. Eventually, you should be able to clean up your credit enough to qualify for an unsecured card.

• Co-signer

If you have a generous friend or family member with good credit, you may be able to convince them to cosign on a credit card. A co-signer will help you get a credit card and with a more favorable interest rate and possibly lower fees. 

No matter which card you get, paying your bills on time every month will help slowly improve your credit report and move past mistakes of the past.  A good time to begin building or rebuilding your credit is after you obtain a steady income with enough extra to start making regular credit payments. Pay special attention to late fees and penalties, so you don’t get dinged. Some may even raise your interest rate if you make a late payment! Penalties are easy to miss, and fees can escalate quickly, so be careful.

“I think that a lot of the small print that people miss is that if you do not pay your card as you should, they can ask for the entire amount of money upfront, or increase your interest, so you are paying more back to them. When you get a credit card, you have to be able to make sure that you can pay it off in the right time that it should be. Otherwise, you will be in a sticky situation.”

— Ethan Taub, CEO, www.loanry.com

What is “bad credit?”

Generally, a bad credit score is under 580. You may have a low credit score because you missed payments, owe too much, or have bills in collections. Some creditors are not as lenient and may consider scores in the 600s to be “fair” or bad. The creditor usually decides what credit score they will accept from their applicants. If you don’t know your current credit score, you can check your credit score for free via the three reporting agencies. 

What is a guaranteed approval credit card?

You may have heard of these types of cards; however, there is no such thing as a “guaranteed approval” credit card. Most credit card providers will need you to show proof of income and perhaps a valid Social Security number. In most cases, when someone refers to this type of card, they are referring to secured cards.

If your credit score is over 650 and you have a steady income, you may get the best terms by first applying for a credit card through your bank or credit union. If you are turned down, or already know you have bad credit, then consider a card specifically designed for those with bad credit. With careful use, you can raise your credit score and improve your credit situation.

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A quick note! Our goal is to gather and share info that’s up-to-date and helps you make great decisions as a renter. That said, the information you get directly from a provider could be a little different. Make sure to review their terms and conditions directly; and, if you see anything here that needs to be updated, please let us know! Advertising disclosure
Last Updated: October 20th, 2020