It's a catch-22, you can't build your credit score unless you have access to a credit card, but getting a credit card when you have bad credit can be difficult – unless you find credit cards for bad credit.
Credit cards for bad credit aren't the only credit-building tool but they are the most expedient. The best credit cards for bad credit have low-interest rates and no annual fees. But when your credit is shaky it's going to be rare to find credit card issuers that don't charge an annual fee.
Credit Cards for Bad Credit
Milestone® Mastercard® Features
Destiny® Mastercard® Features
OpenSky® Secured Visa®
OpenSky® Secured Visa® Credit Card Features
Chime Secured Visa®
Chime Credit Builder Secured Visa® Credit Card Features
While most people can get approved for a secured card for bad credit, unsecured cards for bad credit are available too. Get the security and convenience of a full-feature, unsecured MasterCard® Credit Card – accepted at millions of merchant and ATM locations worldwide and online with the Indigo Mastercard built for people with bad credit.
Credit cards for people with bad credit like the Milestone® Mastercard® consider applicants that even have prior bankruptcies. Building or repairing your credit, especially after bankruptcy, can make it easier to open doors with lenders, landlords, and even potential employers.
The Destiny Mastercard® is one of the few credit cards for bad credit with no deposit required. The Destiny Mastercard® can help people with bad credit improve their credit score as long as payments are made on time and credit card balances are kept low. It has been proven that using less of your available credit can help improve credit scores.
OpenSky® Secured Visa® Credit Card
OpenSky believes in giving an opportunity to everyone. No credit check is necessary to apply or even a bank account to be approved. With the OpenSky Secured Visa, you can get back on the right path no matter if you have a bankruptcy, foreclosure or car repossession.
Chime Credit Builder Secured Visa® Credit Card
The Chime Visa® Credit Builder Card is a secured credit card with no security deposit required. You will need a Chime Checking Account and a direct deposit of at least $200 a month to qualify. But there are no fees or interest assessed. The Chime Checking Account is required so that you can move money instantly—across your Chime accounts. The money you move into Credit Builder’s secured account is the amount you can spend on the card.
Based on a representative study conducted by TransUnion®, members who started using the Chime Visa® Credit Builder Card saw an increase of 30 points in their credit score after 4 months of reporting.
How can I build my credit fast with a credit card?
To build a credit history fast you need to have at least one account open and recorded on your file for six months. Here is what you need to do for a good credit score:
Set up automatic monthly bill payments. Late payments destroy credit scores. If a payment is more than 30 days overdue, the credit card issuer may report it to the credit bureaus. Plus, late payments come with late fees which can be up to $28. Avoid negative side effects of forgetting to pay on time with automatic monthly payments from a bank account.
Nourish your payment history. Always pay on time, even if it's just the minimum payment. A good payment history is essential for future approvals and credit limit increases. Ideally, you should pay the full balance by the due date (to save on interest, too).
Use between 1% to 10% of your available credit limit. Using less of your available credit limit demonstrates good credit management and helps your utilization rate. How much of your available credit you're using accounts for 30 percent of your credit score. Never max out your credit limit.
Step to take after credit cards for bad credit are opened
Credit cards for bad credit help people with low credit scores add positive information to credit reports but there are steps that will help keep you on track.
- Review your credit reports. Regularly review your credit reports, at least 3 to 4 times a year for unauthorized activity, errors and unpaid bills. You may request a free copy of your credit report annually at annualcreditreport.com.
- Dispute errors. Credit bureaus maintain tons of information on consumers. Mistakes are bound to happen. Dispute those mistakes as soon as possible.
- Don't close old accounts. Lowering your available credit will lower your credit score.
- Use your accounts. Make purchases and pay the full balance each month.
- Maintain a low balance-to-limit ratio. Using less of your available credit will help raise your credit score.
- Pay bills on time. Lenders consider payment records to help determine your reliability.
- Start early. The length of your credit history is a key factor in determining your credit scores. Don't wait to build or rebuild credit.
Make wise financial decisions
The desire for a credit card does not solely rest with spending. Credit cards are needed in certain situations and a matter of convenience in other situations. Renting a car, reserving a hotel room and even an emergency repair may involve the need for a credit card.
Avoid any credit card offer that is too costly. Even though the Credit Card Act of 2009 capped upfront fees to 25% of a credit card’s limit, some subprime credit card issuers are finding ways around the law by charging upfront processing fees.
For some consumers, the upfront fees may be worth rebuilding credit. However, you must keep in mind credit card balances should be kept to no more than 30% of the available credit limit in order to increase credit scores.
1 Security Deposit Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.