Sometimes the credit score one has is not the best due to various reason. It could be to various reasons which the credit has declined. Often people believe that having a low credit leads to not being able get a credit card, or just cards with very high fees. That is not the case. There are credit cards out there that not only are appropriate but work as great stepping stones to increase your credit score. Below we go through best credit card options.
Things to Think about When Choosing the best Credit Card when having a low credit rating
Why Low Credit Score?
Credit scores values range between 300-850. Usually, when a person has credit that is below 630, that person is classified as having bad credit. Generally, there are different factors that go into having a low/lower credit. Sometimes, something as innocent such as applying for an additional credit card can lower the credit score. Other more severe factors such as missing payments on say cellphone bills or previously declaring bankruptcy.
Type of Cards
There are two type of credit cards which are available when you have a low credit score.
- Secured Cards: With this card as applicant you have to provide a security deposit, which the credit card issuer uses in case you don’t pay your bills. You will of course get this money back if you close the account. Providing a security deposit does not guarantee that you will receive the credit card, but it improves your chances.
- Unsecured Cards: These cards don’t require any type of deposit. On the other hand they tend to charge higher fees and have lower credit limits. The downside with unsecured cards are that over time to cost with them will be higher than having a secured card.
In addition to trying get as good of a credit card with low rates and fees when having a low credit score it is good to think about a couple other factors when choosing a card. Not only can will you be able to use the card, but it will help you increase your credit.
- Low Fees: Try to find credit cards with as low fees and maintenance charges as possible. Unsecured cards have high annual and maintenance fees and these fees can easily add up. You will avoid all these issue with secured cards.
- Updates from Credit Bureaus: The main way to increase your credit score is various credit bureaus get updates that you are making your payments. A card that gives them these updates can quickly help you raise your credit.
- Free Credit Score: Make sure you pick a card which the issuer gives you free access and updates on your credit scores. That way you can follow your progress and see how your credit improves and what additional things you can do to increase your rating.
- A road to upgrade to better card: Try find a credit card provider that gives you the optionality if you are making your payments, increasing your credit score that you can upgrade your credit card to a better one as you are making your improvements.
Credit Cards for Low Credit Scores
Discover it Secured
- Annual Fee: $0
- Regular APR: 25.24% Variable APR
- Intro APR: 10.990% on Balance Transfers up to 6 months
- Suggested Credit Score: 350-629
- Security Deposit: $200-$2,500
This Discover Secured card is a very good card. It has no annual fees. In addition, you get the kicker of getting a cash-back reward of 2% quarterly on $1,000 of spending. On top of that you receive 1% cash-back on all other spending. Discovery will review account after 8 months to make an assessment if you are eligible for an upgrade. In additional you get free credit scorecard with your FICO credit score.
Capital One Secured Mastercard
- Annual Fee: $0
- Regular APR: 26.99% Variable APR
- Intro APR: Not Available
- Suggested Credit Score: 350-629
- Security Deposit: $49, $99, $200 (depending on credit)
Capital One card has no annual fee. You will receive $200 credit line right away after making a deposit of $49, $99, $200 (depending on credit). Furthermore you will get opportunity for higher credit line after making the first 5 months payments on a timely manner. This a good card if you have had your credit rating lowered.
DCU Visa Platinum Secured Credit Card
- Annual Fee: $0
- Regular APR: 13.75% Variable APR
- Intro APR: Not Available
- Suggested Credit Score: 350-850
- Security Deposit: Equal to credit limit
DCU secured hard has a much lower APR than any other credit card, on top of no annual fee. You will have to make a deposit that equals your credit limit. This is a good card when you pay your credit every month, but more importantly really good card if you need carry the balance for future months. Provides insurance for travel and car rentals.
OpenSky Secured Visa Credit Card
- Annual Fee: $35
- Regular APR: 19.64% Variable APR
- Intro APR: Not Available
- Suggested Credit Score: 350-689
- Security Deposit: $200 and upwards
There are no credit checks to apply for the OpenSky card. This beneficial for those that want to rebuild their credits. The credit limit equates to the security deposit which equates as low as $200. Unfortunately you are not able to upgrade the card as you make timely payments.
Green Dot primor Visa Gold Secured Credit Card
- Annual Fee: $49
- Regular APR: 9.99% Variable APR
- Intro APR: Not Available
- Suggested Credit Score: 350-850
- Security Deposit: $200-$5,000
Green Dot’s credit card offers an amazing APR rate. In addition, there are no penalties for late payments. The card provides $5,000 of credit if put in the same amount to deposit. The yearly annual fee is on the higher side, but it could be worth it as the APR is rather low.
Credit Builder Secured Visa Credit Card
- Annual Fee: $25
- Regular APR: 22.74% Variable APR
- Intro APR: Not Available
- Suggested Credit Score: 350-689
- Security Deposit: $300-$3,000
The Armed Forces Bank card will earn you interest on your secured deposit. As the name of the card points out, this credit card will automatically report your usage to the 3 big credit agencies allowing you to raise your credit ratings. The provider gives the opportunity to upgrade your card if you have good performance.
Additional Reading
These Are the Best Cash Back Credit Cards
Note: buckgenius does not guarantee the correctness of the various offerings in this article. This information have been gathered from providers and various information sites such as J. D Power. They might change at any given moment. The reader is suggested to check with the providers about the most up to date offerings.
