Unsecured Credit Card That Are Easy to Get
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If you don't have a strong credit score, you've probably learned how difficult it can be to qualify for a credit card — in turn making it even harder to improve your credit.
Secured credit cards are a great credit-building option, but they're not the right fit for everyone. 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. If you're ready to commit to the healthy credit habits that will help you secure and maintain a great credit score over time, these cards can be helpful tools.
Here are a few of the unsecured credit cards we like most for building credit:
Before You Start
If you already have bad credit, it's essential to pay down any existing high interest debt and develop a solid plan for avoiding new debt before opening any new card account. Make sure you have the money to pay down any charges you make in full, and develop a habit of paying your bill on time each month. If you carry a balance on a new unsecured credit card, you'll risk damaging your credit score even further, and falling deeper into debt.
Best Unsecured Cards for Bad Credit
Good for Cash Back
Credit One Bank® Platinum Visa® for Rebuilding Credit
Editor's Score: (2.7/5)
Editor's Score: (2.7/5)
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Good for Alternative Approval Process
Petal® 2 "Cash Back, No Fees" Visa® Credit Card
Editor's Score: (4.0/5)
Editor's Score: (4.0/5)
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Good for Building Credit
Capital One Platinum Credit Card
Editor's Score: (3.6/5)
Editor's Score: (3.6/5)
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Rewards rate:
Earn 1% cash back rewards on eligible gas, grocery purchases and mobile phone, internet, cable and satellite TV services. Terms apply.
- Intro offer: N/A
- Annual fee: $75 for the first year. After that, $99 annually ($8.25 per month)
- Regular APR: 24.74% Variable
- Recommended credit score: 300-670 (Bad to Fair)
Overview
While rebuilding your credit with the Credit One Bank® Platinum Visa®* you'll earn 1% cash back on everyday purchases: gas, groceries, monthly mobile phone, internet, cable, and satellite TV services.
You can select your own payment due date, and Credit One Bank reviews your account regularly to determine whether you're eligible for credit limit increases. The downside of this card is its annual fee, which can vary a lot depending on the details in your application. You'll pay $75 the first year, then $99 each year after that (billed at $8.25 per month). The ongoing variable APR is 24.24%.
Why we chose this card
Despite its pricey annual fee, we like this card's cash back rewards, which aren't common among cards for bad credit. These cash back categories include many purchases you're likely to spend money on anyway, like groceries and monthly services.
But ultimately, this is a credit card designed for building credit. You may start with a credit limit as low as $300, but regular checks can help you prove your creditworthiness and qualify for credit line increases. Plus, the option to prequalify online can help you ensure your eligibility before undergoing a hard inquiry on your credit report.
Rewards rate:
Up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments. 1% cash back on eligible purchases right away.
- Intro offer: N/A
- Annual fee: $0
- Regular APR: 14.49% – 28.49% (Variable)
- Recommended credit score: (No Credit History)
Overview
With the Petal 2 Visa Credit Card, issued by WebBank, Member FDIC, you'll earn 1% in cash back on eligible purchases. As you make on-time payments, you can increase that rate to earn up to 1.5% back on eligible purchases after 12 on-time monthly payments. There's no annual fee, and a minimum credit limit of $300 (your individual credit limit is based on creditworthiness). The Petal 2 Visa Credit Card charges a variable APR of 14.49% to 28.49%, and some people can get approved without a credit score.
Why we chose this card
The Petal 2 Visa Credit Card is geared toward consumers with lower credit scores, including those who have made credit mistakes in the past. You'll get the chance to build credit through responsible credit use while earning cash back rewards, and your monthly payments are reported to the credit bureaus every month.
What's really unique about this card is the alternative approval process it offers for people without good established credit. Some applicants may be given the option to link their banking information when applying, which may be used to generate a Cash Score. This score helps determine your eligibility for the card, and is based on factors like your regular bill payments, spending, savings and the money you make. You can also see if you're pre-approved for the Petal 2 Visa Credit Card before submitting a full application and agreeing to a hard inquiry on your credit report.
- Intro offer: N/A
- Annual fee: $0
- Regular APR: 26.99% (Variable)
- Recommended credit score: 580-740 (Fair to Good)
Overview
The Capital One Platinum Card doesn't offer many rewards or benefits, but it's a solid choice for building your credit score. There's no annual fee and you'll pay a 26.99% variable APR on any balances you carry. Capital One assigns your credit limit based on income and other factors in your application.
Why we chose this card
While the Capital One Platinum Card doesn't offer any rewards on your spending, it's a useful tool for improving your credit and instilling good credit habits that will help you maintain your score over time.
Capital One promises to automatically review your account for credit line increases starting at 6 months, and the CreditWise from Capital One program can help you monitor your credit score and your progress over time. Like the others on our list, this card also lets you get pre-approved online without a hard inquiry on your credit report.
Best Unsecured Credit Cards for Bad Credit Summary
Credit One Bank® Platinum Visa® for Rebuilding Credit
Good for: Cash Back
Earn 1% cash back on gas and groceries, as well as monthly mobile phone, internet, cable, and satellite TV services. Your annual fee may be up to $95 the first year and up to $99 thereafter, and an APR of 24.24% applies.
Petal 2 Visa Credit Card
Good for: Alternative Approval Process
The Petal 2 Visa Credit Card, issued by WebBank, Member FDIC charges no annual fee and comes with a variable APR of 14.49% to 28.49%. You can get pre-approved online without a hard inquiry on your credit report, and may even get approved without a credit score by linking your bank account with your application, so Petal can assess your bill payment history to determine eligibility.
Capital One Platinum Credit Card
Good for: Building Credit
The Capital One Platinum Credit Card is a no-frills card for building credit through responsible credit use. The 26.99% variable APR is high, but there's no annual fee and Capital One automatically reviews your account starting after six months for credit line increases.
| Card Name | What It's Good For | Annual Fee | APR |
|---|---|---|---|
| Credit One Bank® Platinum Visa® for Rebuilding Credit | Cash Back | $75 for the first year. After that, $99 annually ($8.25 per month) | Variable APR of 24.24% |
| Petal 2 Visa Credit Card | Alternative Approval | $0 | Variable APR of 14.49% to 28.49% |
| Capital One Platinum Credit Card | Building Credit | $0 | Variable APR of 26.99% |
What Is an Unsecured Credit Card?
An unsecured credit card is probably what comes to mind when you think of a typical credit card. Unlike secured credit cards — which require an upfront deposit that acts as your credit line — unsecured credit cards do not require any collateral to secure the line of credit you can borrow against. When you're approved for an unsecured credit card, your credit limit is based on factors like income, your credit history, and other debts you have (personal loans or other credit card debt, for example).
Unsecured credit cards range from credit-building cards like the ones on this list to the most premium travel rewards credit cards. These cards can offer great spending power and even help you save money, but they also require responsible use to avoid high interest debt. Credit cards often carry extremely high APRs, which begin to accrue on any balance you don't pay off in full when your statement balance is due each month.
Secured Cards vs. Unsecured Cards
The biggest difference between a secured and unsecured card is the deposit. When you open a secured credit card, you'll need to secure your line of credit with an upfront security deposit. This works similarly to a secured loan, which requires some form of collateral. In most cases, the amount you deposit toward your secured credit card will equal your credit limit. For example, if you apply for the Discover it® Secured Credit Card and put down the minimum deposit requirement of $200, Discover will assign you a credit limit of $200.
Many secured cards allow you to deposit more money over time to increase your credit line. Plus, when you're ready to close your card account in good standing, or you qualify to upgrade to an unsecured card, you'll receive the deposit back in full.
Unsecured cards don't require an upfront deposit as collateral. However, if you're approved for an unsecured credit card and you have less-than-great credit, you may be assigned a low credit limit. A low credit score or little credit history can be an indicator of risk to issuers — the more evidence you can show of using credit and paying it back over time, the more likely an issuer is to trust you with a larger credit line.
Both secured and unsecured credit cards can be helpful tools for building credit, as long as your issuer reports your credit movements, including on-time monthly payments, to the three credit bureaus regularly.
Can an Unsecured Credit Card Help You Build Credit?
Practicing healthy credit habits with a credit card — whether secured or unsecured — is one of the most effective ways to build credit.
Your payment history is the most influential factor in your credit score, so it's important to pay your credit card bill early or on time each month to build a strong positive payment history. And to avoid high interest debt, only charge purchases you know you can afford to pay off in full by the time your statement is due.
Credit utilization ratio is the second-most influential factor in your score, and is greatly affected by how you use your credit card. This ratio refers to the amount you owe in relation to your credit limit, and applies to individual accounts as well as your overall available credit. Avoid spending more than 30% of your credit limit in any given month to maintain a healthy credit utilization rate. You may get even better results if you're able to keep your utilization rate below 10%.
Other factors that make up your credit score include the length of your credit history, new credit, and your credit mix, though they aren't as influential to your score as payment history or utilization. Boost your credit by maintaining your credit accounts in good standing for as long as possible — even if you're not using them — and avoiding opening or closing too many accounts within a short time period.
Methodology
EDITORIAL INDEPENDENCE
As with all of our credit card reviews , our analysis is not influenced by any partnerships or advertising relationships.
We believe the most important reason for anyone with bad credit to use a credit card is as a tool to improve their credit score and build good credit habits. As a general standard, any card on our list must report regular payments to the three credit bureaus. We also prioritize cards that offer pre-qualification before applying and credit-building tools to help with improving your credit score. Other factors we consider include annual fee, APR, other fees, any rewards or benefits, and more.
*All information about the Credit One Bank® Platinum Visa® for Rebuilding Credit has been collected independently by NextAdvisor and has not been reviewed by the issuer.
Source: https://time.com/nextadvisor/credit-cards/best-unsecured-credit-cards-bad-credit/
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