Sometimes unfortunate things happen and they cause people to be left with bad credit scores. These low credit scores mean that these individuals are going to pay more interest on any loans they may want to take out. These are loans for doing virtually anything from a loan someone may use for home improvements to buying a car or a house and back again.
This low credit score also makes some companies look twice at extending credit to these customers with poor scores and if they are going to extend credit how much if any they will extend. If the person does get a loan they will likely pay a much higher percentage of interest than someone with a stronger credit score as a collateral to ensure that the company is getting their money on a “riskier” loan.
Now About Credit Cards
The same is true for credit cards. Companies that extend credit cards to people with bad credit will likely charge a much higher percentage of interest rates on the balances of those cards on a month-to-month basis than they would charge to someone with better credit. The people who have poor credit scores are also likely to not be able to get as big of a line of credit or as much of a loan as those with higher credit scores as they are more of a risk to give these loans to in the first place. Some credit card companies are willing to give these people with lower credit scores credit cards anyways.
Best Bad Credit Credit Cards in 2018
Capital One Secured Mastercard: This is a great pick for a low deposit credit card that allows people with a credit rating of between 350-629 to have a $200 line of credit for an up-front down payment of $49, $99, or $200 depending on the credit score. The limit may only be $200 but it’s at a 24.99% annual APR and it allows the user to make the deposits towards the card in payments over time. People who make 5 payments on time are eligible for a higher credit line and can use this to help improve their credit scores going into the future. However, some of the lowest credit scores like those who experienced bankruptcy may not qualify. You must have a savings account to qualify. This helps build credit back up.
OpenSky Secured Visa: This is a credit card that people can get without a credit check. It helps people with a credit score between 350-689. This card carries a 23.74% annual APR. Even people with badly damaged credit, therefore, can qualify for this card. No bank account is needed either. You can open it and pay through your debit card, wire transfer, or check/money order. The card, however, is unsecured and there are no upgrades offered.
Discover It Secured Card: No Annual Fee: This may be the best card of all for people with bad credit scores ranging between 350 and 689. Not only does it have a 0% annual APR, but it also offers 2% cashback on up to $1000 worth of spending power per quarter on purchases at places like gas stations and restaurants. Handle an account responsibly for 8 months, and Discover will consider upgrading you to an unsecured credit card.
Bad credit is a challenge to overcome but it’s not an unheard-of hardship to overcome. Credit cards for bad credit do exist and while you will have to put down-payments up for the first few times you spend money if you manage that card successfully for long enough it can help you restore your credit. You will also be able to upgrade to cards that don’t require upfront payment if you handle your account responsibly over time. It’s a great way to build up your credit and establish trust with money-lenders including credit card companies, again.