credit cards bad credit
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Credit cards can be a tool to help you build credit, and they’re useful for emergencies or for shopping without putting your debit card at risk of data breaches. However, if your history with credit has left your credit scores lacking, you might be wondering how to get approved for a new credit card.

What Are Credit Cards for Bad Credit?

If you have good credit, you probably get more credit card offers in the mail than you know what to do with. But if your credit has been through some ups and downs, you might find it difficult to qualify for traditional credit card offers. That’s where credit cards for bad credit come in.

There are two types of credit cards for bad credit: Unsecured credit cards with low credit limits that don’t require good or even fair credit for approval; and secured credit cards that require a deposit that often ends up being the amount of your credit limit (although some offer a higher limit than your deposit).

Both of these credit card types are designed to give people with less-than-perfect credit access to credit cards. And both types report your payment activity to credit reporting agencies. If you pay on time every month and keep your balances low you might eventually find yourself qualifying for cards usually reserved for those with better credit. That could mean saving money on fees and interest, plus getting access to higher credit limits.

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How to Choose a Credit Card for Bad Credit

If you read reviews of credit cards for bad credit, you might find secured credit cards faring better than unsecured credit cards for bad credit. That’s because many traditional credit cards for bad credit often include added expenses like higher interest rates, annual fees, processing fees, and even account opening fees.

Secured credit cards, on the other hand, don’t always come with annual fees, nor do they necessarily charge processing fees or account opening fees. And, although they do require a deposit, you can most often get that deposit back when you close the card if you pay the balance in full. What’s more, some secured credit cards review your credit activity to see if you might qualify for an unsecured credit card, at which time they might upgrade you.

Some of the Best Credit Cards for Bad Credit¹

Because of the fees associated with many traditional credit cards for bad credit, the list below is focused on some of the best secured credit cards. However, if you want to see what traditional credit cards for bad credit look like, you can take a look Milestone® Gold Mastercard® or the Indigo® Platinum Mastercard® for more information on what these types of cards entail.

All of the data below is current as of June 2019.

Keep in mind as you review the APRs for each credit card that the interest rate you are ultimately given will be based on your creditworthiness. That’s why credit card issuers typically advertise cards with a range of potential APRs. Also, APRs can sometimes change when there’s a late payment — something called a “penalty APR,” which is in addition to any late fee that might be assessed. It’s important to note overall that rates are subject to change.

Bank of America BankAmericard® Secured Credit Card

  • Details: Secured credit card that requires a minimum $300 deposit
  • Annual Fee: $0
  • Late Payment Fee: Up to $39; no penalty APR
  • Purchase APR: 25.24%
  • Rewards: None
  • Upgrade option: Account will be reviewed periodically and could become eligible for a security deposit return

Credit Builder Secured Visa® Credit Card

  • Details: Secured credit card that requires a minimum $300 deposit
  • Annual Fee: $35
  • Late Payment Fee: Up to $15; penalty APR of 24.99%
  • Purchase APR: 23.24%
  • Rewards: None
  • Upgrade Option: Academy Bank, the issuer of this card, says you can “upgrade to an unsecured card with good performance.”

Discover it® Secured

  • Details: Secured credit card that requires a minimum $200 deposit
  • Annual Fee: $0
  • Late Payment Fee: No fee for the first late payment, but up to $39 for late payments after that
  • Purchase APR: 25.24%
  • Rewards: You can earn 2% cash back for purchases made at gas stations and restaurants (up to $1,000 in purchases per quarter). You can also earn unlimited 1% cash back on the rest of your purchases, and they’ll match your earned cash back at the end of your first year with the card.
  • Upgrade option: After eight months with the card, Discover will start reviewing your card activity every month to see if you can be eligible to have your security deposit returned.

Secured Mastercard® from Capital One®

  • Details: Secured credit card requiring a deposit of $49, $99, or $200
  • Annual Fee: $0
  • Late Payment Fee: Up to $38
  • Purchase APR: 26.99%
  • Rewards: None
  • Upgrade option: None mentioned, however the card does offer access to a higher credit limit after the first five on-time payments

Wells Fargo Secured Credit Card

  • Details: Secured credit card requiring a minimum deposit of $300
  • Annual Fee: $25
  • Late Payment Fee: Up to $37
  • Purchase APR: 21.24%
  • Rewards: None
  • Upgrade option: You can become eligible for an upgrade at any time if you meet Wells Fargo’s credit qualifications

¹This list of cards is provided for informational purposes only. Upturn Credit does not endorse any particular card or have any relationship with the card issuers. You should review all product information carefully before applying for any card.

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