Best Credit Cards for Bad Credit
Bad financial decisions or simply not being able to keep with up debt can hurt all of our credit scores. Rebuilding your credit score isn't something that can be done overnight. It will take time and you'll perhaps have to make sacrifices here and there. To understand how you can rebuild your credit, you first need to know what determines your credit score.
Whether you’ve got poor credit or trying to repair it, a credit card for bad credit can help you achieve your financial goals. While these cards usually carry a high APR and offer no rewards, you can use them responsibly to improve your score in the long run. Plus, some of these cards offer free credit score monitoring and credit score access, which can be highly beneficial to you.
Discover it Secured
The Discover it Secured a credit card is a good option for those with bad credit, as it offers good cashback rewards. This credit card will give you up to 2% cash back at restaurants and gas stations, and you can also earn unlimited 1% cash back on all other purchases. You can redeem your money back for gift cards or statement credits. The card also provides access to your FICO credit score once a month, which can help you improve your score.
The Discover it Secured credit card is easy to apply for, but it is important to note that approval is not guaranteed. Certain factors, such as income and debt, may prevent you from being approved. In addition, you may be turned down if you have filed for bankruptcy or have other bankruptcy on your credit report. The good news is that this card does not charge any annual or foreign transaction fees, which are familiar to other secured cards. However, you should know that a late payment can damage your credit score.
It would help if you tried to pay your monthly bills on time to improve your credit score. The best way to do this is to pay the entire balance on time. If you cannot do that, you may consider getting a second credit card to increase your available credit and keep your credit utilization low. The Discover it Secured a credit card is a good option for people with bad credit, but you should pair it with another credit card if you plan to make large purchases.
Another good thing about the Discover it Secured credit card for bad credit is that the issuer reviews your account after a certain period. After seven months, your account should be reviewed again, and you may be eligible to graduate with an unsecured Discover card. However, the issuer will still review your FICO score to determine whether or not you qualify for the unsecured card.
If you have poor credit, you may want to consider a Capital One credit card for bad credit. This card offers excellent tools to help you improve your credit score. Although this card will not automatically raise your credit limit, you can improve your score by keeping your balance low and making your payments on time.
Capital One offers secured and unsecured credit cards for those with bad or fair credit. These cards require you to keep your balance low and make payments on time or the whole. Capital One also reports your account data to the major credit bureaus, so if you make on-time payments, you can earn more points and eventually upgrade to a better Capital One card.
A secured credit card from Capital One has a lower security deposit than an unsecured credit card. It may also only require a small deposit. As you raise your FICO credit score, you can upgrade to an unsecured card. The deposit will be refunded to you as statement credits depending on your credit score. After six months, Capital One will monitor your account and raise your credit limit accordingly.
Once you’ve applied and been approved, you can activate your new Capital One credit card online or through the phone. You can also sign up for the Capital One mobile application once your application is approved. However, you must be aware that prequalification does not guarantee approval. A full credit check can reveal negative details that were not apparent during a soft credit pull.
Capital One offers a variety of credit cards to help those with bad credit build their credit. A secured card requires a security deposit, but keeping your balance low can increase your credit limit over time. This card also offers automatic credit line reviews. After making at least two payments on time, you can request a higher credit limit.
The Discover it credit card is an excellent solution for people with a poor credit history. This card requires a refundable deposit of $200 and is a great way to start rebuilding positive spending habits. It reports your credit history to all three major credit bureaus and automatically conducts monthly account reviews. Discover will return your deposit if you don’t make payments within seven months.
Another great feature of the Discover credit card is the rewards program. This credit card offers 2% cash back at gas stations and 1% cash back on everything else. The company also offers a Cash Back Match program, which will match any rewards you earn in the first year. Another bonus of this card is that it does not charge foreign transaction fees. While Discover cards are not as widely accepted outside of the U.S., they still offer many perks.
Another feature of the Discover credit card for bad credit is its low annual fee. This card is also great for people with no credit history because it reports activity to the three major credit bureaus. This can help you build your credit history and qualify for premium credit cards in the future. Furthermore, you can take advantage of the ongoing rewards and welcome bonus. You can even upgrade your account at the seven-month mark.
Among other benefits, Discover its Secured credit card offers features such as account freeze and credit report monitoring. These features will let you know if anyone is misusing your account. If your card is being misused, you will be unable to make new purchases, cash advances, or balance transfers. This card also comes with an introductory balance transfer fee of 3%, which increases to 5% after the intro period.
Discover it Cashback
You can still get a credit card from Discover if you have bad credit. This card has a zero late payment fee, and you can get a free FICO credit score online. However, you have to keep in mind that you will have to pay a balance transfer fee that can be very expensive. Fortunately, you can avoid this fee with a credit card offering cash back.
The Discover it Cashback credit card is an excellent option if you’re looking for a card with a high cashback rate. It also offers a variety of rewards, such as a matching cashback rate for the first year. You can use this card to pay for groceries and gas and get cash back on certain purchases. It has a reasonable APR, which is another plus. However, if you’re looking for a more versatile card that lets you earn more rewards on everyday purchases, you may want to look elsewhere.
The Discover it Cashback credit card offers a great sign-up bonus, but be aware that this bonus is only available to new cardholders. The card gives you an unlimited cashback match for the first year, so you can get a higher percentage of cash back than you would have otherwise. But be careful not to apply for too many credit cards in a short period, as too many credit card applications can hurt your credit score.
Applicants need a credit score of at least 670 to get the Discover it Cashback credit card for bad credit. Applicants with lower credit scores can also get the Discover it Secured credit card, which does not have a minimum score.
The Revvi Card is a credit card that offers terrible credit individuals cashback rewards. It offers 1% cash back on all purchases and reports to all three major credit bureaus. The application process is straightforward and takes about two minutes. The card does not require a security deposit.
To apply for the Revvi Card, you must have a checking account and a routing number. You will also need to pay a one-time activation fee. Once approved, the Revvi Card will send monthly reports to the three credit bureaus. This will help you qualify for a lower interest rate in the future.
The Revvi Card’s application process requires just a few minutes. You will need to enter your name, physical address, email address, and phone number. You will also need to check the “YES” box if you have a checking account. You will also need to answer whether or not you have any other debit accounts.
If you have bad credit and want a credit card to help you improve your financial situation, the Review Card is a good choice. While it offers an inferior cashback program, it offers lower fees than Fortiva and Aspires. It also allows foreign purchases. The Revvi Card is one of the best credit cards for bad credit and offers good approval odds.
Another option is to apply for a secured credit card. While these credit cards do not offer many benefits, they provide the chance to repair your credit and start building your credit again. The downside to these cards is that you’ll pay a security deposit, which equates to the credit limit you’ve been approved for.
There are five factors that is used when figuring out what your FICO credit score is. Most banks and lenders will take a quick look at your FICO Score and available credit reports to decide whether they should lend you a loan or issue a credit card.
How FICO Score is Calculated
Payment History (35%)
Your overall payment history made to your lenders. It includes how long overdue payments are, total amount past due, bankruptcy or judgments. Basically it states how responsible you are with your payments. It makes up 35% of your FICO Score which is the largest determination point by far.
Amounts Owed (30%)
The total amounts owed individually. It also includes all of your accounts with their current balances, the proportion of credit line and loan amounts used. Unlike payment history, it just shows how much money you owe right now and states your income to debt ratio.
Length of Credit History (15%)
Includes since when you first became credit active and shows the time since your accounts have been active.
New Credit (10%)
This is a section of your FICO Score that lenders will likely examine to see if you’ve been rebuilding your credit score. It shows the re-establishment of positive credit history after poor decisions made on your credit. It also shows the time since newly opened accounts and proportion to total accounts, and time since recent credit inquiries.
Types of Credit Used (10%)
States the various types of accounts you’ve opened like installment of loans, mortgages, or credit card accounts or retail accounts. It gives enough information to lenders for what you’re looking for.
How to rebuild credit score?
The FICO score starts from 300 and goes all the way up to 850. A bad credit score is one that is below 670. However, if your credit score is between 580 and 669 which is considered fair, there are many available credit cards that you can get easily.
A FICO score between 300 and 579, on the other hand, is considered poor so you might have some hard time acquiring a new credit card, even if you want to rebuild your credit. The credit cards that are listed below should be easily accessible by you if your credit score is below 600.
Credit Cards to Rebuild Credit in 2023
Discover it® Secured
Getting an unsecured card with bad credit is extremely hard if not impossible. Discover it® Secured credit card is the best overall in our list with the easy application process. You can be eligible for a credit card by just simply putting a deposit amount that you’d like.
- Discover will automatically review your credit card account on a monthly basis and see if you’re eligible for the deposit return. You can get your deposit back in eight months if you make your payments on time. Since you’ll be rebuilding your credit, making your payments responsibly must be the main focus.
- 2% cashback at restaurants and gas stations up to $1,000 in combined purchases each quarter, then 1%.
- Unlimited cash back on all other purchases
- At the end of your first year, Discover will match the cash back you earned throughout the year.
- Discover isn’t widely accepted like Visa, Mastercard, or American Express.
- It has low credit limits so making purchases on high-cost items or many expenses is not an option.
- 24.99 APR which is considerably high.
OpenSky® Secured Visa®
If your credit score is beyond bad and can’t even get a secured card because of it, OpenSky® Secured Visa® credit card seems to be the only option. It makes no credit background check so you can put the deposit amount you like and get your credit card. It is a simple credit card that is aimed to rebuild credit score.
- OpenSky® Secured Visa® Credit Card doesn’t offer any cash back or points. It also doesn’t have a welcome bonus. If you don’t qualify for any other credit card and aiming to rebuild your credit, this card can be used as a gate for better credit cards in the future.
- No rewards whatsoever.
- $35 Annual Fee
Capital One® Journey® Student
If your credit score is just below 500 or around that range and you’re currently attending a college or university, Capital One’s Journey can be an option. Don’t expect a high credit line with this credit card. It is a secured credit card so you aren’t required to put in a deposit.
- 1% cash back on all purchases
- Upon making your payments on time, the cash back increases to 1.25%.
- No annual fee
- $0 fraud liability
- After making your payments on time, you can get access to a higher credit line.
- Limited credit line
- Requires credit score check
- High late fee (up to $39)
- Relatively high 26.74% APR