Being stuck with a low credit score can make you feel like you’re in an impossible situation. However, a good credit score is required to obtain a credit card. Credit card for those with low FICO scores do exist. Once you have one of these Unsecured credit cards for bad credit, you can use it to gradually raise your credit rating.
If your credit is less than stellar, don’t worry; this guide will tell you which credit cards are the best options and how to apply for them.
Read on to find out what factors into a poor credit score and why this is important.
Table of Contents
- What Is A Bad Credit Score?
- Defining Unsecured Credit Card For Bad Credit Score
- Should You Consider Applying For Unsecured Credit Cards?
- How Important Is Your Credit Score?
- The Difference Between Secured And Unsecured Credit Cards?
- What Kind Of Credit Card Can You Get With Bad Credit?
- 5 Best Unsecured Credit Cards For People With Bad Credit In 2023
- How To Apply For An Unsecured Credit Card?
- What If You Don’t Qualify?
- Frequently Asked Questions
What Is A Bad Credit Score?
It can happen with different lenders and the definition of poor credit scores can vary slightly depending on the type of credit.
Generally, an FICO score below 580 can be considered extremely poor, and between 580 & 669 is generally considered fair.
Defining Unsecured Credit Card For Bad Credit Score
Unsecured credit cards for poor credit are cards which do not require security deposits but can be used by borrowers with good credit or without.
As credit card companies usually only provide access to borrowers who have good credit ratings, it is difficult to use the loan to obtain an unrestricted loan.
One’s credit score can be anywhere from 300 to 850. Creditors like banks and credit card companies use information like your payment history, total debt, and number of account inquiries to determine your score.
One way to severely damage your credit score is to default on loans or close a credit card account while there is a balance due.
If you’ve never had a credit card before, that could also be a factor in your low score.
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When a person’s credit score falls below 630, it is considered sub-par. Scores in the 650s are considered adequate, while those in the 700s are considered excellent. A score of 800 or higher is considered a great score.
When applying for an Unsecured credit cards for poor credit, you won’t need to put up any collateral.
Whenever you make a purchase with an Unsecured credit cards for bad credit, the amount you owe on the card will increase.
You can keep making purchases with that credit card until your balance is equal to or greater than the credit limit associated with that card account.
By paying off what you owe to your credit card company, you increase your available credit line. Because of this, you can keep taking out loans against your initial credit limit without having to apply for a new line of credit.
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Should You Consider Applying For Unsecured Credit Cards?
To avoid the need to put up collateral with a secured credit card, you may prefer an unsecured credit card instead.
Low-credit consumers are encouraged to apply, but approval is not guaranteed. Before applying for credit, it’s a good idea to see what your credit score is currently.
To put it plainly, unsecured credit cards offer more flexibility than their secured counterparts.
Credit limits are typically greater for unsecured cards, and they frequently offer additional services like balance transfers and foreign currency spending.
In most cases, gaining access to these expanded privileges requires passing a No credit check unsecured credit card, the results of which will determine the extent to which your credit card can be used and the interest rate you will be charged.
This means that obtaining an unsecured credit card generally requires at least fair credit.
How Important Is Your Credit Score?
When deciding whether or not to grant you a credit card or loan, a financial institution will look into your credit score.
Lenders look at your credit history as a predictor of how you will handle your finances in the future. They want to minimise their losses, so they won’t extend credit unless they’re confident they’ll be repaid.
Your credit line increases in proportion to your credit score. You’ll be able to apply for credit cards with better terms, such as those that don’t charge annual fees or give you rewards like cash back or points toward travel.
If you have a low credit score, you probably won’t be guaranteed approval unsecured credit cards for bad credit for a travel rewards credit card.
However, there are credit cards that people with low scores can still apply for and use to improve their credit over time. It is possible to get a secured or unsecured credit card even with a low score.
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The Difference Between Secured And Unsecured Credit Cards?
The key differences that you should be looking into are security deposits, the interest rates, application process and rewards programs.
The amount of a cardholder’s initial deposit is the main difference between secured and Unsecured credit cards for poor credit. For a secured credit card to be activated, the applicant must first submit a refundable security deposit to the card issuer.
If you stop making payments on your credit card, the credit card company will be protected by your collateral Unsecured credit cards for bad credit with no deposit.
If you apply for a secured credit card, the credit card issuer will feel much more at ease extending credit to you despite your less-than-perfect credit history.
In most cases, the amount you put down as a security deposit will determine how much credit you’re given.
No collateral is needed to open an unsecured credit card account.
What Kind Of Credit Card Can You Get With Bad Credit?
When your credit is at its absolute lowest, you may only be offered a secured credit card.
When applying for a secured credit card, a security deposit is typically required. Some of them can be used in the same way as prepaid debit cards.
You put a certain amount of money on them at the beginning of the month and can then use that money anywhere the card is accepted.
Secured credit cards have low credit limits and require an initial cash deposit or load.
If you have bad credit but can still get an unsecured credit card, you don’t need a secured card unless you want to put extremely tight spending limits on yourself or can’t afford the annual fee.
You can use an unsecured credit card the same way you would use any other credit card. Most people begin with a $300 monthly credit limit. When you make on-time monthly payments toward your debts, your credit line increases over time.
Without good credit, you won’t be able to qualify for a credit card with the best rates and rewards.
To help you raise your credit score to the fair/good range, we recommend applying for one of the unsecured credit cards listed below..
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5 Best Unsecured Credit Cards For People With Bad Credit In 2023
Below are five of the Best unsecured credit cards for bad credit for people with poor credit. Using the information on the card, you can fill out a simple online application to determine your eligibility.
The following are the top five cards in the deck:-
- Indigo Platinum Mastercard
- Milestone Gold Mastercard
- Total VISA Unsecured Card
- Credit One Bank Unsecured Visa*
- Platinum One Credit Card (for average credit)
If you’re looking for an unsecured credit card, the Credit One Bank Visa stands out from the crowd because it offers rewards and may increase your line of credit after five months of on-time payments.
You should compare your prequalification status with the remaining poor credit credit cards, as they all offer similar perks. First, let’s compare the details of the various Best unsecured credit cards for bad credit available.
Indigo Platinum Mastercard
The Indigo Platinum Mastercard is becoming increasingly popular because it is accessible to people with a wide variety of credit histories.
The Indigo card, like the Credit One bank, allows you to manage your finances and apply for a card online.
The average introductory credit line is $300, and annual fees range from $0 to $99. The annual percentage rate is set at 23.9%. The Indigo card lacks the cash-back features of the Credit One card.
Milestone Gold Mastercard
Milestone Gold also begins with a standard $300 credit limit and a fixed APR of 23.9%. The cost per year ranges from $36 to $99!
Total VISA Unsecured Credit Card
With a 29.99% APR, the Total VISA is the card with the highest interest rate. The initial annual fee is $75, and subsequent annual fees are $48. The minimum credit line for these cards, like most low-limit Bad credit unsecured credit cards, is $300.
Credit One Bank Unsecured Visa Credit Card
If you have bad credit and are looking for a rewards credit card, your best bet is the Credit One Bank.
You can get 1% back on both groceries and gas purchases with this card. The card has an annual fee ranging from $0 to $75 the first year and $0 to $99 the years following, with the exact amount being determined by your credit history and household income.
You may be able to pay this fee monthly rather than in one lump sum at the end of the year.
The card includes a service that monitors your credit score on a monthly basis, so you can see how it has changed as you’ve used it responsibly.
The interest rate is high, ranging from 15.65% to 24.15%, but that shouldn’t be a deal breaker.
Never let your credit card balance carry over from one month to the next if you care about improving your credit score or staying out of debt.
Always pay your monthly balance in full to avoid late fees and high interest rates.
Someone with a low credit score might be able to get a $300 credit line to get started. After five months of on-time payments, this may increase.
Capital One Platinum Card
If your credit score has recently risen above 600, you may be eligible for the Capital One Platinum credit card. In order to qualify for this card, your credit score needs to be 600 or higher.
It offers fraud protection, has an APR of 24.99%, and has no annual fee.
With on-time payments for about five months, a person can increase their initial credit limit from $200 to $500.
How To Apply For An Unsecured Credit Card?
Applying for a credit card online is quick and simple. First, visit the company’s website and complete the quick pre-qualification process. Even though the results of this survey aren’t necessarily binding, they do provide a rough estimate of your eligibility based on your household’s income.
You will be asked to fill out some basic information about yourself, such as your name, address, and social security number.
Also, your credit won’t take a hit from this pre-qualification process. Your credit score will only be affected if the company runs a hard check to see if you officially qualify and open an account. If you’re already qualified, you’ll apply for the credit card without any additional steps.
Do not risk your credit score by applying for multiple cards at once. Upon application and guaranteed approval unsecured credit cards for bad credit, your card will be sent to you via mail within a week to two.
If you do not qualify for any of the above cards due to a low credit score or income, you still have one more option: a secured credit card.
To find out if you are likely to be guaranteed approval unsecured credit cards for bad credit, simply fill out a quick online pre-qualification form.
If you are applying for a secured credit card, however, the card issuer will likely only perform a light No credit check unsecured credit card.
In most cases, all the company needs to know about you to determine if you qualify for a credit card is your name and income level, and this is called a “soft pull,” which has no consequence on your credit score.
An annual percentage rate (APR) is associated with both secured and unsecured credit cards. Best unsecured credit cards for bad credit have a higher interest rate than secured ones.
However, a large number of unsecured card issuers also provide a promotional 0% APR for a set period of time (or even years). You may have a hard time finding a 0% APR credit card if you’re looking for an unsecured card.
Using an unsecured card has its benefits, one of which is the abundance of enticing rewards programs.
When using Bad credit unsecured credit cards, you may be eligible to earn rewards like frequent flyer miles, store loyalty points, or cash back on your purchases.
What If You Don’t Qualify?
If your credit isn’t good enough to get you approved for an unsecured credit card, you may want to investigate secured credit cards instead.
As was previously mentioned, secured credit cards necessitate an initial deposit or prepayment before use.
Secured credit cards aren’t quite the same as other cards, but they’ll help you build credit until you’re approved for an Unsecured credit cards for bad credit.
Don’t expect to get a $10,000 credit line and 2% cash back on all purchases if you have a low credit score. But if you start by applying for one of the secured or Unsecured credit cards for bad credit designed for people with low credit scores, you might be able to raise your score and become eligible.
Credit limits on unsecured cards typically begin at $300 per month and come with an annual fee. Making all of your payments on time each and every month will raise your credit score, which could lead to an initial credit limit in the future.
Make it a habit to know your credit score and where it comes from if you haven’t already. Once you know where you stand financially, you can devise a strategy to improve your credit to good or excellent levels. By using one of the top credit cards for Bad credit unsecured credit cards, you can improve your financial standing and make it easier to apply for loans, credit cards, and even a mortgage in the future.
Frequently Asked Questions
What is the easiest unsecured card to get?
The Credit One card is the easiest, most unsecured credit card available. The service is accessible for people with bad credit and without any credit. A new credit card credited to customers earning 1% back.
Is it possible for you to get an unsecured credit card with a 500 credit score?
It is possible to have unsecured cards with up to 650 credit points. The most unsecured credit card for 500 credit score is the CITI Credit One Visa Card which is based on the credit one card.
What is the bare minimum credit score for an unsecured credit card?
Editorial content can be accessed from anywhere and no one endorses or approves it. The unsecured card’s maximum score should be about 500. The application process requires a very small amount of credit, a very high annual fee and a high APR rate in some cases.
Can you get a $1000 credit card with bad credit?
The only way to get bad credit is to pay up to $500 towards a secured credit card for the amount to be paid. Top secured credit cards: Capital One secured. Major credit bureaus. Citi secured. Discover secured.