Having poor credit can feel like a financial roadblock, especially when you need access to credit for emergencies or to build a better credit history. Fortunately, there are credit cards specifically designed for individuals with less-than-perfect credit. This guide will explore the best credit card options for those with poor credit, helping you navigate the application process and rebuild your financial standing.
Securing a credit card with poor credit can be a stepping stone toward improving your credit score and accessing more favorable financial products in the future. It's important to understand the different types of cards available, the associated fees, and how to use them responsibly to achieve your financial goals.
| Card Type & Name | Key Features | Ideal For |
|---|---|---|
| Secured Credit Cards | Requires a security deposit (typically equal to the credit limit). Often reports to all three major credit bureaus. Lower credit limits. | Individuals with very poor credit or no credit history. Those who want a low-risk way to build credit. People who are comfortable providing a security deposit. |
| OpenSky Secured Visa Credit Card | No credit check required. Reports to all three major credit bureaus. Requires a minimum $200 security deposit. Annual fee applies. | Individuals with extremely poor credit who have been denied other cards. Those who want to avoid a credit check. People who can afford the security deposit and are willing to pay an annual fee. |
| Discover it® Secured Credit Card | Earns rewards on purchases (cash back). Reports to all three major credit bureaus. Security deposit refundable after responsible use. | Individuals who want to earn rewards while building credit. Those who want the potential to have their security deposit returned. People who are comfortable with a security deposit and are looking for a reputable issuer. |
| Capital One Platinum Secured Credit Card | Requires a security deposit. Reports to all three major credit bureaus. Potential for a higher credit line than the security deposit. | Individuals who want a chance to build credit with a reputable issuer. Those who can afford a security deposit and may want a higher credit line. |
| Unsecured Credit Cards for Bad Credit | No security deposit required. Higher interest rates and fees than secured cards. Often reports to all three major credit bureaus. | Individuals who want to avoid a security deposit. Those who are confident they can manage their spending and pay their bills on time. People who are willing to pay higher interest rates and fees. |
| Credit One Bank Platinum Visa for Rebuilding Credit | Designed for individuals with fair to poor credit. Reports to all three major credit bureaus. Annual fee applies. | Individuals who want an unsecured card and are willing to pay an annual fee. Those who are comfortable with potentially lower credit limits and higher interest rates. |
| Avant Credit Card | Designed for individuals with fair to poor credit. Reports to all three major credit bureaus. No security deposit required. | Individuals who want an unsecured card and are willing to pay higher interest rates and fees. Those who are comfortable with potentially lower credit limits. |
| Store Credit Cards | Can be easier to obtain with poor credit. Limited to purchases at the specific store. May not report to all three major credit bureaus. | Individuals who frequently shop at a particular store and want to earn rewards or discounts. Those who have been denied other credit cards. People who are comfortable with limited purchasing power. |
| Amazon Store Card | Offers rewards on Amazon purchases. Can be easier to obtain with poor credit than some other cards. | Individuals who frequently shop on Amazon and want to earn rewards. Those who have been denied other credit cards. People who are comfortable with using the card only for Amazon purchases. |
| Walmart Rewards Card | Offers rewards on Walmart purchases. Can be easier to obtain with poor credit than some other cards. | Individuals who frequently shop at Walmart and want to earn rewards. Those who have been denied other credit cards. People who are comfortable using the card only for Walmart purchases. |
Detailed Explanations
Secured Credit Cards: These cards require a security deposit, which typically serves as your credit limit. They are a great option for those with poor or no credit history because the risk to the issuer is minimized. The key benefit is that responsible use, like making on-time payments, is reported to the major credit bureaus, helping you build credit.
OpenSky Secured Visa Credit Card: A popular choice because it doesn't require a credit check. This makes it accessible to almost anyone, regardless of their credit history. However, it does have an annual fee, so weigh the cost against the benefits of building credit without a credit check.
Discover it® Secured Credit Card: This card stands out because it offers cash back rewards on purchases, a rarity for secured cards. It also allows for the potential return of your security deposit after demonstrating responsible credit use, making it a financially attractive option.
Capital One Platinum Secured Credit Card: Capital One is a well-known issuer, and this card provides a reliable way to build credit. While it requires a security deposit, it may offer a higher credit line than the deposit amount in some cases, providing more purchasing power.
Unsecured Credit Cards for Bad Credit: These cards don't require a security deposit, but they typically come with higher interest rates and fees to compensate for the increased risk to the issuer. They are an option for those who can't or don't want to provide a security deposit, but responsible use is crucial to avoid accumulating debt.
Credit One Bank Platinum Visa for Rebuilding Credit: This card is specifically designed for individuals with fair to poor credit. It reports to all three major credit bureaus, helping you build credit, but it does have an annual fee and potentially high interest rates. Carefully consider the costs before applying.
Avant Credit Card: Avant offers an unsecured card option for those with less-than-perfect credit. It reports to all three major credit bureaus, which can help you build credit. Be aware of the potential for higher interest rates and fees associated with unsecured cards for bad credit.
Store Credit Cards: These cards are typically easier to obtain than general-purpose credit cards, even with poor credit. However, they are limited to purchases at the specific store, and some may not report to all three major credit bureaus, limiting their credit-building potential.
Amazon Store Card: This card is a good option for frequent Amazon shoppers. It offers rewards on Amazon purchases and can be easier to obtain with poor credit. However, it can only be used for Amazon purchases.
Walmart Rewards Card: Similar to the Amazon Store Card, the Walmart Rewards Card offers rewards on Walmart purchases and may be easier to obtain than general-purpose credit cards. It is best for those who regularly shop at Walmart.
Frequently Asked Questions
What credit score is considered "poor credit"?
Generally, a credit score below 580 is considered poor credit.
Can I get a credit card with no credit history?
Yes, secured credit cards are a good option for building credit from scratch.
How can a credit card help improve my credit score?
Responsible use, such as making on-time payments and keeping your credit utilization low, can positively impact your credit score.
What is a secured credit card?
A secured credit card requires a security deposit that typically serves as your credit limit.
What is credit utilization?
Credit utilization is the amount of credit you are using compared to your total available credit. Aim to keep it below 30%.
What are the key factors to consider when choosing a credit card for poor credit?
Consider interest rates, fees (annual, late payment, etc.), reporting to credit bureaus, and any potential rewards programs.
How long does it take to rebuild credit with a credit card?
It can take several months to a year or more to see significant improvements in your credit score with responsible credit card use.
Are there any alternatives to credit cards for building credit?
Yes, options like secured loans, credit-builder loans, and becoming an authorized user on someone else's credit card can also help build credit.
Conclusion
Choosing the right credit card for poor credit requires careful consideration of your financial situation and goals. Secured credit cards offer a low-risk way to build credit, while unsecured cards provide access to credit without a security deposit, albeit with higher fees and interest rates. By comparing the options and using your credit card responsibly, you can take the first step toward improving your credit score and achieving your financial objectives.