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Best Credit Cards for Bad Credit

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by Heather Swick | Updated Jun. 13, 2017
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Overview

If you have missed payments, defaulted on debt, or underwent bankruptcy, you may find it difficult to qualify for a new line of credit. This is often indicated by your credit score dipping below 549, which signals to lenders that you may be a risky debtor. However, that does not mean that the situation is hopeless. On the contrary, there are many lenders who will consider and approve applicants with bad credit. Typically, these cards come with security deposits that also set your credit limit. While you will likely start with a low line of credit, secured credit cards can serve as excellent stepping stones to higher credit and, in turn, better credit card offers. Read below to see some of the best credit cards for bad credit. See More


Best Rewards Credit Card for Bad Credit

More Details

  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • A security deposit of $200 or more will establish your credit line (up to the amount we can approve). Automatic monthly reviews starting at 7 months to see if we can transition you to an account with no security deposit.
  • Reports to the three major credit bureaus. Plus, get your FICO® Credit Score for free on monthly statements, on mobile and online.
  • Earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases.
  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • Tools to assist you; email alerts, text reminders and 24/7 customer service.

Annual Fee

$0

Purchase Intro APR

N/A

Balance Transfer Intro APR

10.99% APR for 6 Months

Regular APR

23.74% Variable

Benefits

If you have poor or limited credit, most of the credit cards you qualify for aren’t going to offer you any rewards. You will commonly see high APR rates and fees, but cash back bonuses are rare. Discover it® Secured Credit Card gives you the best of both worlds: a credit-building secured card with some impressive rewards. There is 1% cash back on every purchase, plus 2% cash back at gas stations and restaurants up to $1,000 each quarter. Also, at the end of your first year, all of the cash back you’ve earned will be doubled. There is no annual fee, and your credit usage will be reported to all three major credit bureaus to help you boost your score. And another important bonus - you can be upgraded to unsecured after successfully using this secured option.

Things to consider

Despite the rewards, this is still a secured card and there is a high APR. Discover it® Secured Credit Card has an APR of 23.74% Variable, so if you’re prone to carrying a balance, you’re going to rack up some interest payments with this card.

Our verdict

If you want rewards while you’re improving your credit, this is our recommendation. You’ll receive bonuses in addition to working toward stronger credit, which can be a hard combination to find. This is an excellent secured card option with impressive user reviews. Just remember to keep your balance low, and you’ll enjoy cash back rewards along with credit benefits.

Best Low Interest Credit Card for Bad Credit

More Details

  • Low fixed interest rates with no penalty rate!
  • Reports to all three nationwide credit bureaus
  • Fast, easy application process
  • No processing or application fees!
  • Guaranteed Approval* as long as your monthly income exceeds your monthly expenses by $100 or more
  • *See application for additional details

Annual Fee

$39

Purchase Intro APR

N/A

Balance Transfer Intro APR

N/A

Regular APR

13.99% (F) Fixed

Benefits

A secured card is one of the best ways to build your credit, and they’re accessible for people with poor credit. primor® Secured MasterCard Classic Card comes with that foundation, plus some decent bonuses. It’s a basic secured card that does its job well. If building credit is your primary concern, this card reports to all three credit bureaus, which will help boost your score. Additionally, your credit line can be anywhere from $200 to $5,000 - it depends on how much money you put down as a security deposit. One of this card’s most attractive features is its low APR of 13.99% (F) Fixed, which is rare with secured cards. You also won’t need a credit check with this card, meaning your report won’t be dinged when you apply.

Things to consider

There are some fees associated with this card, so take that into consideration when you’re applying. There is a $39 annual fee, plus a late fee of up to $29, a 5% cash advance fee and a 3% foreign transaction fee. You will also need to prove that your monthly income exceeds your monthly expenses by at least $100 to be eligible for this card.

Our verdict

primor® Secured MasterCard Classic Card is our pick for a low fixed interest rate in a secured card. You’re going to have some upfront costs with a secured card, but that low 13.99% (F) Fixed APR, credit reporting and lack of a credit check are great features worth the cost.

Best Military Credit Card for Bad Credit

More Details

  • Best for members rebuilding or establishing credit.
  • Determine your own credit limit ($250 to $5,000) with an interest-earning CD.
  • No foreign transaction fees when you travel outside the United States.

Annual Fee

$35

Purchase Intro APR

N/A

Balance Transfer Intro APR

N/A

Regular APR

10.65% - 20.65% Variable

Benefits

If you or your spouse is an active or retired military member, you may be eligible for the USAA Secured Card® Platinum Visa®. This card includes benefits that are ideal for members of the military and their families. For example, if you’re on deployment or PCS, you will have an APR of 4% on balances for up to a year. It requires a security deposit of $250 to $5,000, which is put into a two-year CD. This is one secured option that allows you to gain interest while you use your card. Your account activity is also reported to the three major credit bureaus, which helps boost your score. You also get some benefits that go beyond the basic secured card offerings, like extended warranties for U.S. store brands, travel accident insurance, no foreign transaction fees and collision damage waiver coverage.

Things to consider

It’s common for secured card options to have an annual fee, and this card is no exception. There is a yearly fee of $35. You also have the possibility for a higher APR of 20.65%, but depending on your credit, it could be as low as 10.65%. So if you have poor or no credit and plan to carry a balance, this could work against you.

Our verdict

If you’re a member of the military and expect to travel often, this is a strong contender for a secured card. Visa is accepted worldwide. That, paired with the $0 foreign transaction fee, makes it convenient for relocating. The additional benefits, plus the USAA service, make this a standout choice for improving your credit.

Methodology SmartAsset has developed a quantitative and independent system for evaluating the relative value of a credit card offer versus other offers in the marketplace. Our system evaluates cards based exclusively on their features, such as their rewards earning rate (if applicable), fees, perks, and rewards program redemption options. The annual rewards values on this page are calculated using annual spending assumptions in various categories such as, but not limited to, gas, restaurants, airfare, and US supermarkets. These spending assumptions are built on research that SmartAsset has conducted on existing cash back credit cardholders. Our promise with our credit card recommendations is that we will always strive to have the most comprehensive, accurate, and objective method of evaluating credit card offers. Any recommendations are solely determined by the result of this research and model, and is never influenced by any fees, commissions, or other forms of compensation that SmartAsset may receive from credit card issuers for leads generated on our website.

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