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If your credit isn’t great, it might be difficult to qualify for unsecured credit cards. And that, in turn, can make it difficult to build credit. So what are your options when it comes to unsecured credit cards for bad credit?The good news is that there are unsecured credit cards designed specifically for people with bad credit or limited credit histories. But you’ll need to be careful. Some unsecured credit cards for bad credit are better than others. Before you apply for a card, check the terms carefully to make sure the card makes sense for your situation. To help you narrow your search, we’ve put together a list of our picks for some of the best options out there.
Best for low fees: Petal® 2 Visa® Credit CardHere’s why: The Petal® 2 Visa® Credit Card doesn’t charge any fees. None. Petal has kicked annual fees, late-payment fees, returned-payment fees, and every other fee to the curb. That’s impressive for any card, but especially for an unsecured card that considers consumers who have limited credit. Important note: There might not be any fees, but the card still charges interest. Petal has designed a credit approval algorithm that looks at your entire financial picture, not just your credit scores. In fact, Petal says you could be approved for the Petal® 2 Visa® Credit Card without any credit scores or credit history whatsoever. And as an extra perk, the Petal® 2 Visa® Credit Card offers its cardholders 1% to 1.5% in cash back rewards. You start out earning 1% cash back on all purchases. Then you’ll graduate to earning 1.5% cash back after making 12 on-time monthly payments. Check out our full review of the Petal® 2 Visa® Credit Card to learn more. Best for restaurant and travel rewards: Deserve® Pro MastercardHere’s why: With the Deserve® Pro Mastercard, you’ll earn 3% cash back on travel purchases and 2% cash back on dining purchases. It’s important to note that the extra cash back on these bonus category purchases only applies to the first $500 of purchases made each billing cycle. Luckily, you’ll also earn an unlimited 1% cash back on all other purchases. The Deserve® Pro Mastercard could be a great option for many consumers. But college students will probably want to check out the Deserve® EDU Mastercard instead. Best for building credit: Capital One Platinum Credit CardHere’s why: Cardholders can get access to higher credit limits in as little as six months. That’s a great incentive to pay your bills on time every month. And if you’re able to keep your spending rate the same after earning that higher credit limit, your credit utilization rate could improve, which could help your credit scores too! The Capital One Platinum Credit Card has no annual fee or foreign transaction fees. But you won’t earn any rewards. Learn more by reading our full review of the Capital One Platinum Credit Card. Best for unlimited cash back: Capital One QuicksilverOne Cash Rewards Credit CardHere’s why: With the Capital One QuicksilverOne Cash Rewards Credit Card, you’ll earn unlimited 1.5% cash back on all purchases. That’s right: With the Capital One QuicksilverOne Cash Rewards Credit Card, there are no reward caps. You simply get 1.5% back on everything that you buy with the card. That’s impressive for a card that considers applicants who have what Capital One considers fair credit. This card has a $39 annual fee. But with a 1.5% cash back return, you’ll need to spend only $2,600 to earn that much in rewards with this card, which comes out to spending about $217 a month for a year. If you plan on spending more than that each month, then this card could be a good option. Get more details about the Capital One QuicksilverOne Cash Rewards Credit Card in our full editorial review. Best for prequalification: Credit One Bank® Platinum Visa® for Rebuilding CreditHere’s why: If you shop for the Credit One Bank® Platinum Visa® for Rebuilding Credit card directly through the Credit One Bank website, the issuer offers the chance to see if you prequalify for the card before you apply. This is a soft credit check — meaning it won’t affect your scores — and you can find out if you prequalify in less than a minute. Just keep in mind that prequalification doesn’t guarantee the terms and eventual approval. We also like that the Credit One Bank® Platinum Visa® for Rebuilding Credit lets you earn rewards while you build your credit. You’ll earn 1% cash back rewards on gas and grocery purchases, as well as internet, mobile phone, cable and satellite TV services. Cash back is automatically applied as a statement credit. In addition, the card comes with regular, automatic reviews of your account to see if you’re eligible for a credit line increase. While credit prequalification, rewards and automatic credit line reviews are the shining features of the Credit One Bank® Platinum Visa® with Cash Back Rewards, it does lag in other areas. You’ll pay an annual fee of $75 for the first year, $99 thereafter. And it comes with other expensive fees (for cash advances and late or returned payments, for example) as well as a high variable purchase APR of 26.24%. How we picked these unsecured credit cardsWhen choosing the best unsecured credit cards, we looked for card issuers that said they would consider applicants with average, damaged or limited credit histories. We also looked for cards that minimized fees. If you’re looking for unsecured cards for bad credit, you’re probably trying to avoid having to pay the deposits that secured cards require. But if an unsecured card has a high annual fee, that kind of defeats the whole purpose. Some secured cards will refund the deposit you paid after a certain number of on-time payments. So you’d eventually get that money back. But that’s not the case with annual fees. Finally, we looked for unsecured credit cards that offered rewards. We believe that you shouldn’t be left out in the cold when it comes to earning cash back or points while you’re working to build your credit. And, thankfully, most of the card issuers on this list agree. Should you consider applying for an unsecured credit card now?Depending on your situation, it may be possible for you to skip a secured credit card, which would require you to deposit money as a collateral, and go with an unsecured one. Here are a few examples of when this might work for you.
While each of these credit cards is targeted at people with limited or bad credit, you’re not guaranteed approval. Check where you’re at with your credit by taking a look at your credit scores, and then carefully consider your options before deciding to apply. How to make the most of unsecured credit cards for bad creditHere are a few pointers to make the most of the cards on this list. Pay your bill on time every month.One of the most important factors in your credit scores is your payment history, so make sure you always pay on time. To do this, set up a reminder each month or request automatic payments from your checking account. If you want to go an extra step and avoid interest, pay your entire bill (on time) instead of making only the minimum payment. Keep your balance relatively low.Another key factor in your credit scores is the amount of credit you use. One way to calculate this is through your credit utilization rate, which is all your balances divided by your credit limits. The lower your rate, the better it can be for your credit scores. Most experts recommend keeping your overall credit card utilization below 30%. Avoid multiple credit applications in a short period.It may be tempting to apply for multiple credit cards, but it’s best to give it some time first. Each individual hard credit inquiry that accompanies an application won’t do too much to your credit scores. But too many in a short period can lower your scores and signal that you’re a risky borrower, which can hurt your chances of getting approved. Once your credit scores have gone up, you can apply for more-attractive credit cards that offer better terms or rewards. If you’re looking for more ideas to improve your credit scores, check out our Guide to Building Credit. Next steps: Consider secured credit card optionsIf you’re unable to be approved for an unsecured card with your current credit history, don’t worry. You may be able to qualify for a secured credit card to help build your credit. By their very nature, secured credit cards require a deposit of around $200 or more as collateral to “secure” the card in case you don’t make your payments. It makes sense, then, that there’s no such thing as a secured credit card with no deposit so keep that in mind when looking into secured credit cards. If you’re interested in trying out a secured credit card while you work on your credit, here are some that might work for you.
About the author: Clint Proctor is a freelance writer and founder of WalletWiseGuy.com, where he writes about how students and millennials can win with money. When he’s away from his keyboard, he enjoys drinking coffee, traveling, obse… Read more. Can someone with bad credit get an unsecured credit card?You might be able to make regular payments toward your monthly credit card purchases, for example, but not have the cash upfront to secure a minimum deposit. While they are less common, and can offer less favorable terms than other cards, there are some unsecured credit cards available for people with bad credit.
What unsecured credit card is easiest to get?The Credit One Visa Card is the easiest unsecured credit card to get. It is available to people with bad credit or no credit. Cardholders also earn 1% cash back on eligible purchases.
What is the minimum credit score for an unsecured credit card?Typically, you'll need a credit score in the good to excellent range (670-850) to get approved for an unsecured credit card. Some card issuers offer credit cards aimed at consumers with below-average or fair credit (580-669).
Can I get an unsecured credit card with a 540 credit score?If you have a credit score between 400 and 550, don't rule yourself out of being able to own a good credit card. Instead, consider applying for an unsecured credit card that will help you build a better credit history.
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Unsecured credit cards for bad credit with no processing fee
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