Best Credit Cards for Bad Credit Scores

Many Americans with bad credit fear applying for a new card because they worry it could drop their scores even further. Yet, when credit cards are used responsibly, they can actually help to restore and build healthy credit history. The trick is to find a card with a low limit, fair interest rates, and no annual fees.

The Capital One Platinum Secured Card is the best credit card for building and repairing bad credit. It comes with no annual fees, although cardholders are asked to deposit a one-time payment of $49 to increase their limits to $200. Within six months, Capital One will then assess your payment history and increase your limit to improve your credit score.

Bad credit can feel like a life-long curse but, with responsible financial planning, a credit card can help you restore your score within 6 months. In this article, we'll introduce 5 of the best credit cards designed to help average people like you, so you can stop fighting with unjust interest rates and financial exclusion.

These 5 Credit Cards are the Path to Excellent Credit

If you've been turned down for a loan or new line of credit, you're not alone—over 43 million Americans suffer from bad credit. This number is especially high among young adults, with over 60% of millennials having a score below the good range.

There is some good news, though. Even if your credit is bad, you can still qualify for a credit card. In fact, using a credit card responsibly is one of the best ways to improve your score. When you make purchases with a credit card and pay off your balance from month to month, you'll build a good history of credit use.

This positive history will eventually outweigh any negative marks and your score will start to go up. Of course, you'll have to find the right card to avoid paying high interest rates and annual fees. Below, we've provided five of the best options designed to help you build credit.

1. Capital One Platinum Secured Card

Although it sounds fancy, the Capital One Platinum Secured Card was specifically made for people with low or no credit. By securing your card with a one-time deposit of $49, you can access a credit line of up to $200, which sets this card apart from other secured cards. Rather than receiving a credit line equivalent to your deposit, you'll automatically start with $200.

Additionally, the Capital One Platinum Secured Card offers the following benefits:

  • Credit line reappraisal after 6 months based on your payment history and credit utilization
  • Variable-rate APR of 26.99%
  • All payments are reported to the three main credit bureaus, helping to build your credit score
  • Cardholders can choose their payment dates

We should point out, though, that the Capital One Platinum Secured Card does not offer reward points and, if you have any prior bankruptcies, you may be denied approval.

2. Discover it® Secured Credit Card

The Discover it® Secured Credit Card is another great option if you're looking to improve your credit score. One of the main benefits of this card is that it offers a cash-back rewards program, which is rare for secured cards. You'll earn 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter) and 1% cashback on all other purchases.

Other benefits of the Discover it® Secured Credit Card include:

  • Variable-rate APR of 24.49%
  • No annual fees
  • Free credit score monitoring
  • All payments are reported to the three main credit bureaus

To qualify, applicants must deposit at least $200 and their credit line will match the initial deposit for the first seven months. After a probationary period, Discover will then review your account and may increase your limit depending on your payment history.

3. Wells Fargo Secured Credit Card

The Wells Fargo Secured Credit Card is a good option for people with limited or no credit history, not necessarily bad credit. One of the main benefits of this card, though, is that it offers a relatively low APR for a secured card. Additionally, the annual fee for this card is only $25, which is below the average for a bank-supported credit card.

Other benefits of the Wells Fargo Secured Credit Card include:

  • A variable-rate APR set at 20.24%, which is lower than the average for secured cards
  • Ability to choose your credit limit (between $300 and $5,000) based on your initial deposit
  • Deposits are returned once your account matures
  • Access to online credit education resources
  • No monthly fees

Wells Fargo does charge a 3% foreign transaction fee as well as a $37 late fee, so be aware of your spending if you take this card abroad.

4. Secured Sable ONE Credit Card

If you're only planning to open a credit card to build your score, the Secured Sable ONE Credit Card is arguably your best choice. This card works like any other secured card, meaning your credit line will match your initial deposit, up to $10,000. But what sets this card apart is its many benefits:

  • An incredibly low variable-rate APR of just 11.74%
  • 2% cash back rewards on Amazon, Uber, Netflix, Spotify, and many other popular purchases
  • No annual fees
  • Deposits are returned once your account matures

Best of all, Sable ONE requires a minimum deposit of just $10 to qualify. This makes it the most inclusive credit card for Americans without much savings.

5. OpenSky® Secured Visa Credit Card

Last but not least, we wanted to introduce the OpenSky® Secured Visa card. This credit card is available for applicants with credit scores as low as 300 although it does require a deposit of $49 as well as a $35 annual fee. This makes it more expensive than other options but cardholders can benefit from the following:

  • A low 18.14% variable-rate APR
  • Guaranteed-decision applications that can be completed in 5 minutes without a credit check
  • Flexible payment dates
  • Deposits may be returned once the account matures

Because these cards are backed by an annual fee and a deposit, OpenSky® is more willing to accept applications, regardless of your credit history.

The Bottom Line

You don't have to live in the shadow of bad credit. By using a credit card responsibly, you can slowly repair your score and escape the debt trap of high interest rates. We recommend applying for one of the five cards discussed here and encourage you to pay the full balance from month to month.

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