Best Credit Cards for Low Credit

of February 2025

Best-Credit-Cards-for-Low-Credit

In This Article

Introduction

Having a poor credit score can feel like a catch-22 situation – you need credit to build credit, but lenders are hesitant to extend credit when your score is low. Fortunately, there are credit cards designed specifically for people with bad credit that can help break this cycle and put you on the path to a healthier credit profile.

In this comprehensive guide, you’ll explore the best credit cards for bad credit in 2024.

Whether you’re looking for a secured card, an unsecured card for bad credit, or a card that caters to specific needs like earning rewards or building business credit, dive into the nitty-gritty details of each card, including their pros, cons, and key features, to help you make an informed decision.

SUMMARY

1. First Progress Platinum Prestige Mastercard Secured Credit Card
2. First Progress Platinum Select Mastercard Secured Credit Card
3. Bank of America Customized Cash Rewards Secured Credit Card
4. Chime Credit Builder Secured Visa Credit Card
5. Capital One Platinum Secured Credit Card
Overview of Credit Cards for Bad Credit
How to Choose a Credit Card for Bad Credit
Pros and Cons
What to Watch Out For
Pro Tips
Recap

1. First Progress Platinum Prestige Mastercard Secured Credit Card

First Progress Platinum Prestige Mastercard Secured Credit Card

You can rebuild your credit without breaking the bank with the First Progress Platinum Prestige Mastercard Secured Credit Card. It stands out for its relatively low APR, making it an ideal choice if you need to carry a balance occasionally.

Pros

  • Reports to all three major credit bureaus to help rebuild your credit
  • Offers a lower-than-average standard APR of 15.24% (Variable)
  • Provides approval opportunities even with bad credit
  • Earns 1% cashback on payments

Cons

  • Charges a $49 annual fee
  • Applies a foreign transaction fee
  • Requires a security deposit of $200 to $2,000

You can choose your own credit line based on your security deposit amount and build your credit score with responsible usage. There’s no minimum credit score required for approval. If you keep your balance low and pay on time, you’ll typically see an increase in your credit score.

2. First Progress Platinum Select Mastercard Secured Credit Card

First Progress Platinum Select Mastercard Secured Credit Card

If you’re looking for a more affordable option, the First Progress Platinum Select Mastercard Secured Credit Card is the right fit. With a lower annual fee and the potential for approval even with a recently discharged bankruptcy, this card offers a fresh start.

Pros

  • Charges a low $39 annual fee
  • Provides a way for those with low credit scores to rebuild
  • Reports to all three major credit bureaus
  • Allows applications even with a discharged bankruptcy in your file

Cons

  • Limits your credit line maximum to $2,000
  • Carries a higher variable APR of 19.24%

You can earn 1% cash back on payments and choose your own credit line from $200 to $2,000 based on your security deposit. Build your credit score with responsible usage; there’s no minimum credit score required for approval.

3. Bank of America Customized Cash Rewards Secured Credit Card

Bank-of-America-Customized-Cash-Rewards-Secured

Earn rewards while you rebuild your credit with the Bank of America Customized Cash Rewards Secured Credit Card. This card offers the same generous cash back program as its unsecured counterpart, making it a standout option for you with bad credit.

Pros

  • Charges no annual fee
  • Earns up to 3% cash back in a category of your choice
  • Offers the potential for an upgrade to an unsecured card
  • Accepts a refundable security deposit of $200 to $5,000

Cons

  • Imposes a spending cap on your highest-earning reward categories
  • Charges a 3% foreign transaction fee
  • Has a 28.24% variable APR

Earn 3% cash back in the category of your choice (gas, online shopping, dining, travel, drug stores, or home improvement/furnishings), 2% cash back at grocery stores and wholesale clubs, and 1% cash back on all other purchases. Earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%.

4. Chime Credit Builder Secured Visa Credit Card

Chime-Credit-Builder-Secured-Visa-Credit-Card

Break free from the traditional secured card model with the Chime Credit Builder Secured Visa Credit Card. This innovative card requires no security deposit, making it a more accessible and affordable option if you have bad credit.

Pros

  • Charges no annual fee or interest
  • Requires no security deposit
  • Performs no credit check for application
  • Helps build credit history without the risk of debt

Cons

  • Requires at least $200 in direct deposit for eligibility
  • Limits your credit line based on the amount in your Chime account

Open a Chime Checking Account and receive a qualifying direct deposit of $200 or more. The Chime Credit Builder Card is a secured card that uses the funds in your Chime account as collateral. Chime will report your activities to Transunion, Experian, and Equifax to help build your credit history. Use your card everywhere Visa is accepted, including for everyday purchases like gas and groceries.

5. Capital One Platinum Secured Credit Card

Capital-One-Platinum

The Capital One Platinum Secured Credit Card is a solid choice if you’re looking to rebuild your credit on a budget. With a low minimum security deposit and no annual fee, this card makes building credit more accessible.

Pros

  • Charges no annual fee
  • Requires a minimum security deposit of only $49 for a $200 credit limit
  • Considers you for a higher credit line after on-time payments automatically
  • Provides access to CreditWise credit monitoring tools

Cons

  • Carries a higher ongoing variable APR of 30.74%
  • Denies applicants with recent bankruptcies or debt collections
  • Has no introductory APR

Get an initial $200 credit line with a refundable security deposit starting at $49. Enjoy $0 Fraud Liability protection. Monitor your credit score with CreditWise from Capital One. Access your account 24/7 with online banking and the Capital One mobile app.

Overview of Credit Cards for Bad Credit

Overview-of-Credit-Cards-for-Bad-Credit

Credit cards tailored for individuals with poor credit can be a useful tool for improving your credit score. They typically have more lenient approval criteria, making them accessible to those with limited credit histories.

It’s important to note that these credit cards often come with higher fees, interest rates, and fewer rewards compared to cards designed for those with excellent credit.

There are two main types of credit cards for individuals with poor credit: secured and unsecured cards.

Secured credit cards require an initial refundable security deposit, which usually becomes your credit limit. This deposit acts as collateral for the issuer, reducing their risk when providing credit to individuals with poor credit histories. While secured cards may offer fewer benefits, they offer a chance to establish or rebuild credit through responsible usage and timely payments.

Unsecured credit cards for poor credit don’t require a security deposit, but they typically come with higher fees, annual fees, and interest rates. These cards are tailored for individuals with poor credit who may not have the funds for a security deposit or prefer not to tie up their money.

Both secured and unsecured credit cards for poor credit can aid you in building or rebuilding your credit when used responsibly. The key is to make timely payments, maintain low credit utilization, and regularly monitor your progress.

How to Choose a Credit Card for Bad Credit

When selecting a credit card for bad credit, there are several factors to consider in order to ensure you find the best option for your specific needs and financial situation.

  • Evaluate the overall cost, considering annual fees, monthly maintenance fees, and APRs
  • Look for opportunities to upgrade to an unsecured card or increase your credit limit after demonstrating responsible usage
  • Consider the rewards potential, especially if you plan to use the card for everyday expenses
  • Evaluate credit-building features like reporting to all three major credit bureaus and credit monitoring tools
  • Check for additional perks like fraud protection, discounts, or credit score tracking
  • Determine your specific needs, such as personal or business use, spending patterns, and financial goals

Remember, rebuilding your credit takes time and consistency. By choosing the right credit card for your situation and using it responsibly, you can gradually improve your credit score and increase your chances of qualifying for better financial products in the future.

Pros and Cons

Pros-and-Cons-of-the-Best-Credit-Cards-for-Low-Credit

Like any financial product, credit cards for bad credit come with their own set of pros and cons. Understanding these advantages and disadvantages can help you make an informed decision and set realistic expectations.

  • Provides accessibility to credit if you have poor or limited credit histories
  • Reports your payment history and credit utilization to major credit bureaus
  • Requires no credit history for some cards
  • Offers the potential for upgrades to better cards or the return of your security deposit with responsible usage
  • Allows you to earn cash back or other rewards on purchases with some cards
  • Charges higher annual fees, monthly maintenance fees, and APRs
  • Limits your credit availability with lower credit limits, often based on your security deposit amount
  • Necessitates an upfront refundable security deposit for secured credit cards
  • Lacks many perks, rewards, and benefits offered by cards for good or excellent credit
  • Risks high interest charges if you carry a balance on a card with a high APR

What to Watch Out For

While credit cards for bad credit can be a valuable tool in rebuilding your credit, there are several potential pitfalls to be aware of:

  • Beware of high fees and interest rates, carefully reviewing the terms and conditions
  • Evaluate whether credit limit increases are truly beneficial or come with additional fees or higher APRs
  • Watch for penalty APRs that can be triggered by late payments or other infractions.
  • Avoid overlimit fees by staying within your credit limit
  • Monitor your credit reports regularly and dispute any inaccuracies promptly
  • Decline unsolicited credit limit increases that could negatively impact your credit utilization ratio

Pro Tips

Pro-tips-of-the-Best-Credit-Cards-for-Low-Credit

Here are some pro tips for you:

  • Prioritize on-time payments
  • Maintain a low credit utilization ratio
  • Monitor your credit reports
  • Consider a credit-building loan
  • Be patient
  • Avoid closing older accounts
  • Seek professional guidance

Recap

Rebuilding your credit can be a challenging journey, but having the right credit card for bad credit can make a significant difference. In this comprehensive guide, you’ve explored the best credit card options for you with a poor or limited credit, including secured cards, unsecured cards for bad credit, and cards that cater to specific needs like earning rewards or building business credit.

Remember, the key to success is choosing a card that aligns with your financial situation and goals, minimizes fees and costs, and provides opportunities for credit-building through responsible usage and on-time payments.

Consistent, responsible credit management is the foundation for rebuilding your credit, and a credit card for bad credit can be a valuable tool in that journey. Stay focused, stay patient, and celebrate the small victories along the way. With dedication and perseverance, you’ll be on the path to better credit and increased financial opportunities.

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