Getting an unsecured credit card is one of the best – and easiest – ways to begin building your credit. Unfortunately, some of the best unsecured credit cards are only available to those with long credit histories and excellent credit scores.
That’s why we created this list of unsecured cards for people with bad credit. Even if you have a short credit history or a blemish on your report, you may be able to qualify for an unsecured credit card without a cosigner.
The Simple Dollar’s Top Picks for 2016
When you’re searching for a new unsecured card, you’ll want to compare several options and find the perfect one for your situation. Consider this a starting point: Based on several criteria, we currently recommend the following cards for consumers with poor or average credit:
Rules for Getting a Credit Card with Poor or Average Credit
Whether you’re trying to fix poor credit, or simply build your credit from the ground up, an unsecured credit card is your best bet. Not only do unsecured credit cards report to all three credit reporting agencies, but they also help you build credit without the use of a deposit.
Although you might start with a low credit limit at first, some of the best unsecured credit cards for bad credit may raise your limit over time.
Before you take the plunge, however, you should be aware of some simple rules that can help you make the most out of your unsecured card:
Rule #1: Know your credit score.
Before you consider applying for an unsecured credit card, you should first take some time to find out your credit score. To get a free copy of your credit score from at least two of the three credit reporting agencies, you can sign up for a free credit tracking site like CreditKarma.com or CreditSesame.com.
Not only that, you should also spend some time browsing through your credit report. Using the site AnnualCreditReport.com, you can get a free copy of your credit report from all three credit reporting agencies. If you’re worried about your credit score, you can also sign up for one of the free credit monitoring services that are out there.
Rule #2: Only apply for cards you might qualify for.
If your credit score is under 700, you should definitely avoid applying for the best rewards credit cards. For now, stick to cards for poor or average credit, including any card on this list.
Applying for a new cards will result in a hard inquiry on your credit report, which could temporarily lower your score. Meanwhile, you may not be able to qualify for one of the best unsecured cards for bad credit if you applied for another card in the last 90 days.
Rule #3: Use your card with caution.
Once you get approved for an unsecured credit card, it’s important to take things slowly. When you’re first starting out, you should put only small purchases – and only purchases you can afford – on your card. Get used to paying the bill in full each month before you begin using your unsecured card more frequently.
If you start falling behind, you can also revert back to using cash – or even a prepaid debit card. Since prepaid debit cards are funded with your own money, these products allow you to enjoy the convenience of credit without the worry of borrowing more money than you can afford.
Best Unsecured Cards for Bad Credit
Credit One Bank® Unsecured Platinum Visa®
When it comes to the top unsecured cards for bad credit, the Credit One Bank® Unsecured Platinum Visa® is your best choice. Since this card is unsecured, you don’t have to put down a deposit to start using it. Meanwhile, it’s one of the only unsecured cards for bad credit that offers a rewards program.
Currently, the rewards program offers 1% cash back on all grocery or gas purchases made with this card. If you commute to work by car or drive often for any reason, your rewards could add up easily over time. But that isn’t the only perk this card offers – in addition to cash back on gas purchases, the Credit One Bank® Unsecured Platinum Visa® also offers free credit score tracking that can help you keep track of your progress over time. Another bonus – this card promises to report to all three credit reporting agencies, so your responsible use will help build your score.
This cards annual fee range is $0-$99 the first year and each year thereafter. If you spend a lot on gas, however, you could easily recoup this fee over the course of a year (or less).
If you’re worried about the annual fee, it’s important to note that it is charged to your account in monthly increments – not in a lump sum. This way, you don’t have to come up with it all at once. Here are some of the most important details on this offer:
- No security deposit required. Get a 100% unsecured card that can help grow and build credit.
- Focused on growing or rebuilding your credit? We report account activity to all three major credit bureaus each month to help keep your credit score up-to-date.
- Find out if you're Pre-Qualified without harming your credit score. It's fast, easy, and secure.
- Looking for more credit? Get credit line increase opportunities, a fee may apply
- Get 1% cash back on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV. Terms apply.
- Your account is safeguarded against unauthorized charges with Zero Fraud Liability at no additional charge
- Stay in-the-know about your account with custom email and text alerts that remind you of your payment due date, notify you when a payment posts, or warn you if your available credit runs low
- Show off your style with a premium card design, a fee may apply.
Total VISA® Unsecured Credit Card
Another genuine Visa card that can help you rebuild your credit is the Total VISA® Unsecured Credit Card. Since this is another unsecured card, you won’t need to pay a deposit to start using it right away. The Total VISA® Unsecured Credit Card doesn’t offer a rewards program, but it does promise a fast and easy application process that provides a response in seconds. To get started, all you need to do is pay the $89.00 processing fee and pay any other applicable annual or monthly service fees.
Paying a processing fee isn’t optimal, and not something we’d recommend when applying for a traditional credit card — but this card is aimed at those with poor credit. And in every case, an unsecured card with an annual fee or processing fee is a better way to rebuild your credit than doing nothing at all. Here are some of the important details you should know before you sign up:
- Fast and easy application process; response provided in second
- A genuine VISA card accepted by merchants nationwide across the USA and online
- Manageable monthly payments
- If approved, simply pay a Processing Fee to open your account and access your available credit
- Reports monthly to all three major credit bureaus
Best Unsecured Cards for Average Credit
Now that we’ve covered the best unsecured cards for bad credit, it’s time to feature a few cards that might be available to those with decent or average credit, which usually describes someone with a credit score between 630 and 689.
This is where knowing your credit score can really come in handy. If you check your credit score and find out that it isn’t as bad as you thought, you might be able to qualify for an unsecured card for average credit — when the perks get better and the fees get lower. Here are some of the best offers available to people who fall into that category:
Tips for Using an Unsecured Card to Build Your Credit
Once you decide which unsecured card for bad credit is best for you, it’s time to use your new card to your advantage. It isn’t always enough just to get a card in your name; you also have to make sure you’re taking advantage of your new card’s benefits. If you want to use your new unsecured card responsibly to build your credit over time, these tips can help:
Tip #1: Proceed with caution, especially at first.
When you get your first unsecured card, it’s important to remember that your line of credit is not secured by any type of collateral. Unlike secured credit cards, which require a deposit, unsecured cards offer a line of credit based on the card issuer’s trust that you’ll pay it back.
That’s why it’s extremely important to proceed with caution, especially at first. When you’re first starting out, you can use your card for a few purchases each month then pay your bill in full. Using your card infrequently at first is a great way to ease into it.
Tip #2: Pay your bill in full every month.
Since you may not see your credit card bill for several weeks after you make a purchase, it’s easy to wind up in debt. This is another reason it makes sense to take it slow at first. When you’re only using your card infrequently, it will be much easier to pay your balance in full when your bill arrives. Doing this month after month will help you get in the habit of paying your bill in full and remaining debt-free — the best path to a solid credit history.
Tip #3: Pay your bill several times each month.
If you have access to online bill pay and link your checking account to your credit card, you may even want to pay your credit card bill more than once per month. Doing so can help you stay on top of how much you’ve spent, keeping you on budget and out of debt. It can also help you build the type of responsible credit habits that will raise your score over time.
Tip #4: Monitor your credit score and apply for a better card once your score hits 720.
The point of getting an unsecured credit card for bad or average credit is to raise your score over time. If you end up with a card that offers online credit tracking like the Credit One Bank® Unsecured Platinum Visa®, make sure to take advantage of this tool.
Keeping track of your credit score is the best way to know when you’re ready to transition to a better card with superior perks. Once your credit score hits the excellent range – which is anything over 720 – you’ll know it’s time.
Directory of Credit Cards for Bad Credit
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