Best Credit Cards For Bad Credit

More than 30% of the American population has a credit score lower than 600 which is considered by banks as someone with “bad credit.” So if you have bad credit, you’re not alone. Getting approved for a credit card having bad credit is harder, because banks see you as an ‘ increased risk ‘. The good news is that SuperDinero has investigated and found for you the best credit card for bad credit.

The biggest difference of credit cards for people with bad credit is that they are of smaller amounts and of greater interest. In this article we will present you with different options of the best credit cards for bad credit. We will show you both secured credit card options as well as unsecured credit cards as well as their respective advantages and disadvantages. This information will help you better understand your options and possible credit card terms for which you may apply.

“Many of the listings that appear on this website are from companies which we receive compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The site does not review or include all companies or all available products.”

A. Best credit cards with collateral for people with bad credit:

One of the most common credit cards for people with bad credit are secured credit cards. These cards are different than normal credit cards as they require a deposit (which is normally refundable) on your part in order to be able to open the account. Since you are making an upfront deposit you have better chances of being accepted to these credit cards even if you have a bad credit history.

These types of cards are usually used for people with bad credit or without credit but who want to improve or establish their credit history, as these cards report your payment history to the 3 main credit bureaus. By using these cards responsibly you can improve your credit score. By improving your credit score you will be able to qualify better credit cards (with and without collateral) with lower interest rates and many other types of loans that you would not qualify for by having a low credit score.

Advantages:

  • Report your payment history to the 3 credit bureaus to help you improve your credit score if you pay on time.
  • They help people with bad credit or without credit to be able to access a credit card.
  • Many secured cards will automatically check your account after your first few months to see if they can promote you to an unsecured credit card or if they can raise your credit limit (without the need for a deposit).
  • Some cards have cash back programs which give you back a% of the amount of your purchase in certain purchases that qualify.
  • Usually deposits you make to open secured cards are refundable.
  • Applying is free.

Disadvantages:

  • These cards require a refundable deposit in order to be granted card.
  • Low credit limits.
  • You accumulate interest on unpaid balances (as with regular credit cards).
  • Some secured credit cards have yearly costs (try to only apply to cards without annual costs to get more out of your money).

B. Best unsecured credit cards for people with bad credit:

Credit cards for people with bad credit without collateral are like normal credit cards that do not require a deposit to be able to open them. As they do not require a deposit they are a little harder to qualify if you have bad credit, but not impossible. The biggest difference if you have bad credit is that the terms you apply are lower amounts and interests may be higher. Although the terms are not the best, these cards can be a good option because they give you access to a line of credit (without having to make a deposit) even if limited. Also these credit cards sometimes have even lower interests than personal loans for people with bad credit.

Advantages:

  • With these cards there is no need to make a deposit in order to receive the credit card.
  • You can check if you pre-qualify without damaging your credit score.
  • Many cards automatically monitor your account every month to see if you qualify for an increase in your credit limit.
  • These credit cards are specifically designed for people with bad credit so you have a better chance of being approved.
  • Applying is free.

Disadvantages:

  • Low credit limits to begin with.
  • You accumulate interest on unpaid balances (as with other credit cards).
  • Some unsecured credit cards have yearly costs (check the terms of the card for more information).
  • They do not give the best (usually 14.99%-24.99% interest but varies by card and annual costs usually 0-$99 per year but varies by card).

“Many of the listings that appear on this website are from companies which we receive compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The site does not review or include all companies or all available products.”