Best credit cards for bad credit in 2022: Top 5 choices if you’re looking to improve your score
If you have bad credit or a low credit score, you are not alone. According to FICO, about 15.5% of consumers have credit scores below 600. Getting a credit card, using it responsibly, and paying it off on time and in full is actually a great way to repair your credit. You may think that a prepaid or debit card is your only payment option, but secured credit cards are a great way to get a better credit score. But what are the best credit cards to apply for if you have bad credit?
There are credit cards specifically designed for people with bad credit. Additionally, credit card issuers are now making it easier to transition from secured to unsecured credit cards once the borrower has established a positive payment history.
If you’re looking for a way to rebuild your credit history and start down the road to good credit, read on to find out the best credit cards for people with bad credit.
What does “bad credit” mean?
Bad credit generally means credit scores below 580. You are considered a high-risk borrower if you have bad credit due to significant debt or a history of default or late payment.
There are three main credit bureaus that handle the details that make up your credit scores: Equifax, Experian, and TransUnion. These agencies review your payment history and record your credit score in your credit report.
There are a few things to consider when looking for credit cards for bad credit.
- Annual fees
- Credit cards designed for people with poor credit often come with annual fees. These can range from $35 to $99 or more. But there are also credit cards that have no annual fee, although they may have other requirements such as a security deposit.
- The annual percentage rate (APR) is the interest rate you will pay on any line of credit you hold monthly. APRs on credit cards for people with bad credit are often higher than on other cards. This means that if you don’t pay off your balance in full, you’ll take on more debt and risk further damage to your credit score.
- Credit limit
- A credit limit or line of credit is the maximum amount of credit that a financial institution extends to a customer on a credit card. The credit limit of credit cards specifically for people with bad credit is usually lower than that of other cards.
- Rewards programs are available on some credit cards for people with fair credit. These programs are usually not overly generous, but they can still be useful. Once you get a good credit score, you will be eligible for credit cards with better rewards.
Best credit cards for bad credit
A bad credit score can turn you off and make you think you’re trapped with a subprime credit card. However, those with bad credit have many options, including the ability to switch from a secured credit card to an unsecured credit card after an on-time payment history.
Here are five of the best credit cards for bad credit.
Capital One Platinum Secured Credit Card
People with limited credit histories can choose the Capital One Platinum Secured Credit Card because it charges no annual fee and has a low APR on purchases and balance transfers. It also has a decent rewards program that allows you to earn points with every purchase.
Advantages: The Capital One Platinum Secured Card has a few benefits, including access to your credit score and automatic line of credit review for a higher line of credit. You can also access your account 24/7 through the Capital One mobile app.
Disadvantages: This Capital One Platinum credit card has high interest rates. If you have a monthly balance, you’ll be paying a lot of interest, so be sure to use your Platinum Secured Card responsibly. Also, it offers no lower interest APR introductory period when you first sign up.
Discover it Secure credit card
The Discover it Secured credit card is another good option for people with bad credit. It has no annual fee and offers a decent rewards program.
Plus, it has a 0% APR on purchases and balance transfers for the first 14 months. This can help you save money on interest if you plan to consolidate your debts and increase your credit.
Advantages: This credit card offers cash back on qualifying purchases, a free FICO score checker, and penalty-free APRs. After eight months, the secured card also provides an automatic review to consider switching you to an unsecured card.
Disadvantages: A disadvantage of the Discover it® Secured Credit Card is that it requires a minimum refundable security deposit starting at $200. This security deposit equals your credit limit, so if you want a $500 credit limit, you will need to deposit $500.
Chime Credit Builder Visa Credit Card
One of the credit cards that can help you rebuild your credit is the Chime Credit Builder Visa credit card. This credit card reports your payment history to all three credit bureaus, allowing you to build a positive credit history.
Advantages: This card has no annual or hidden fees. It also immediately deactivates your card to prevent fraud if lost or stolen and provides free access to your FICO score through Experian.
Disadvantages: One of the disadvantages of the Chime Credit Builder Visa credit card is its relatively low credit limit. Another downside is that it doesn’t offer any rewards or introductory period in April.
Capital One Quicksilver Secured Cash Rewards Credit Card
The Capital One Quicksilver Secured Cash Rewards Credit Card is a great choice for people looking to rebuild their credit and boost bad credit scores.
As you earn 1.5% cash back and strive for a regular unsecured card, you will have the opportunity to improve your payment and credit history, which should have a positive impact on your credit report.
Advantages: With a minimum refundable security deposit of $200, you may be eligible for the Capital One Quicksilver Secured Cash Rewards credit card. This credit card gives you access to credit monitoring and fraud protection.
Disadvantages: The Capital One Quicksilver Secured Cash Rewards credit card has a relatively high APR. Another downside is that it offers no introductory APR period.
OpenSky Secure Visa Credit Card
This secure credit card is issued without a credit check or bank account. The OpenSky Secured Visa Credit Card can help you rebuild your credit reports, as it reports to the three major credit bureaus.
Advantages: This Visa credit card offers great benefits including a lower APR, the ability to increase your credit limit, and free online access to your Experian credit score. You will have the chance to get an unsecured OpenSky Gold card after 12 months of on-time payments.
Disadvantages: One of the disadvantages of the OpenSky Secured Visa Credit Card is that there is an annual fee of $35.
FFrequently Asked Questions
Can I get a credit card with bad credit?
Yes, you can get a credit card with bad credit. There are several options available to you, and each has its advantages and disadvantages. You will need to decide which option is best for you based on your needs and financial goals.
Is a secured credit card my only option if I have bad credit?
It depends on your credit score. For people with very low credit scores, a secured credit card may be your only option. However, you can always try applying for an unsecured credit card, especially once you’ve spent some time building up your credit history.
What are the qualities of a credit card for bad credit?
Qualifications vary from card to card. However, most specify the minimum credit score required and the income you must earn each month.
What is the easiest credit card to get approved?
The OpenSky Secured Visa Credit Card is the easiest credit card to get approved. It is simple to qualify for this card as it does not require credit or bank account verification.
Several bad credit credit cards are available for people who want to improve their credit. It is important that you apply for the best credit card that suits your needs and goals when it comes to repairing bad credit. A secured credit card can be a great option for building your credit. An unsecured credit card may be a better option if you have a stable income and a slightly higher credit score.
Unsecured cards often have the advantages of higher credit limit, rewards opportunities and lower APR. If you can’t qualify for an unsecured credit card right now, start using a secured credit card responsibly to boost your score and build healthy money habits.