ARE THERE CREDIT CARD COMPANIES THAT APPROVE BAD CREDIT?
Having no or bad credit can make the credit and loan search somewhat difficult. What we have done here is list every bank and financial institution we can find online that may approve bad credit credit card request.
There Are Many Types Of Credit Cards That Can Be Used To Start Rebuilding Your Credit Score
On this page you will find unsecured credit cards designed for people with bad credit. Meaning you don’t have to have a good credit score in order to apply. Be prepared. Bad credit unsecured credit cards tend to have a processing fee and have low credit lines. Click Here To Find Unsecured bad credit credit cards and to apply online!
These credit cards require a security deposit, and report as unsecured on your credit report. They are the credit builder of choice because you can set your own credit limit (your credit limit will generally equal the amount of your security deposit). They tend to have lower processing fees then their unsecured counterparts. With steady on time payments, many secured credit cards will become unsecured after a year. And your security deposit gets returned to you! That’s why secured credit cards are our favorite way to help our reader start building credit. Low processing fees, you set your own limit, you get it back AND sometimes earn interest on the money you use as security! You should DEFINITELY take a look at a secured credit card if you are looking to rebuild your credit! Click Here!
Pre-paid cards are basically debit cards with the Visa or Mastercard logo on them. These debit cards generally do not require a credit check, which causes some people to call them guaranteed approval cards. Many of them have credit builder programs, which means for a fee they will report your credit card activity to the credit reporting agencies. On your credit report, it will look just just like an unsecured credit card. Thus helping you build up your credit profile. Prepaid cards are mostly used for convenience or by people who have set up a budget and want to use them to stick to it! If you want to use it for credit repair, you MUST make sure it has the credit builder program. Click Here For A List of Prepaid Debit Cards and To Apply Online
Is your credit report full of credit cards with low credit lines? If you have been turned down for a loan or credit card because you lack comparable credit” merchandise cards can help! Again they just look like a regular credit card on your credit report. What makes them great for credit repair is that they routinely give large credit lines to their customers. Many of them range between $5,000 – $10,000! Catalog cards can only be used to purchase items from the catalog they are attached too. Click Here For A List Of Guaranteed Approval Catalog Cards
Best Unsecured Credit Cards for Bad Credit of 2017
Find the best unsecured card to begin rebuilding your credit.
Best Unsecured Credit Cards for Bad Credit of 2017
Find the best unsecured card to begin rebuilding your credit.
Credit cards are either secured or unsecured. Unsecured cards are the most common and do not require a deposit to open the account; secured cards require a cash security deposit that can be retained by the issuer if the cardholder defaults on payments.
Most credit cards designed for people with bad credit are secured. However, there are a number of unsecured credit cards that can be used to improve or establish your credit. If you have bad credit, unsecured cards can be risky, as they often do not have the best terms. Interest rates and fees can be high and may do more harm than good.
An unsecured credit card can help you improve your credit, but it’s important to understand how unsecured cards work and which are the best ones available.
Unsecured credit cards for bad credit are not backed by a cash deposit like secured cards. They are traditional credit cards that can be used to pay for purchases and are subject to interest and late fees.
Unsecured credit cards for bad credit are designed for people who have trouble getting approved for regular cards. They have lower approval requirements, so you may be approved for one even with a poor credit score. They can offer a good opportunity for rebuilding or establishing your credit, but they often have drawbacks like high interest rates and fees.
Unsecured credit cards for bad credit are useful for people who:
- Have a poor FICO score (579 and below)
- Want to establish a credit history
Related Low Credit Score Card Categories
Your credit score is a numerical representation of your creditworthiness. It is one of the factors that lenders use when making approval decisions. Your credit score is an indicator of how well you pay your debts and how big of a risk you represent to lenders. There are several different credit scoring models in use today, but the most common is the FICO score.
Your FICO score is calculated based on the data in your credit report collected by the three major credit bureaus: Equifax, Experian and TransUnion. That data includes your outstanding debt, payment history, defaults, judgements and bankruptcies.
- Exceptional (800+)
- Very good (740-799)
- Good (670-739)
- Fair (580-669)
- Poor (579 and below)
If you have a credit score in the poor FICO range, you have bad credit. People with bad credit have very little creditworthiness and often find it difficult to obtain a new unsecured credit card.
The Consumer Financial Protection Bureau recommends four ways to obtain your FICO score:
- Purchase directly from MyFico.com for $19.95 (this includes your FICO score from all three major credit bureaus)
- Paid credit monitoring services
- A nonprofit credit counselor (make sure to use a government approved counselor)
- Your monthly credit card statement if it is offered as a cardholder benefit
People with bad credit are risky for creditors. They have a greater chance of defaulting than someone with a higher score, which is why applicants with bad credit are often denied new cards. Credit cards for people with bad credit are designed to offer a second chance while also protecting the lender against the possibility of default.
Typically, creditors use secured cards to offset their risk. These cards require a cash security deposit on the account, typically 50 to 100 percent of the credit limit. If you miss a monthly payment on a secured card, the creditor may use money from the deposit to pay the bill. Most secured credit cards have very low starting credit limits.
With unsecured cards for bad credit, issuers offset their risk by charging high interest rates, steep penalties for late payments and regular maintenance fees. With a higher cost to use the card, issuers make more money upfront in case a cardholder defaults. Like secured cards, unsecured cards for bad credit usually have low credit limits, though they are typically higher than the limits on secured cards.
Benefits of unsecured cards for people with bad credit:
Drawbacks of unsecured cards for people with bad credit:
- High interest rates
- Potential high annual fees
- Potential monthly maintenance fees
Read the Best Credit Cards for Bad Credit guide to learn how you can use credit cards to improve your credit score.
If you have bad credit and are looking for an unsecured credit card, you should research these key features before applying:
- Annual fee
- Additional fees and charges
- Credit limit
- Ability to increase credit limit
- Penalty APR
- Foreign transaction fee
- Reporting to the three credit bureaus
- Cardholder benefits
For unsecured credit cards, the features with the largest potential impact to your credit and finances are the APR, annual fee and additional charges. These are the features that can make an unsecured credit card expensive to own even with responsible use.
Unsecured credit cards for bad credit typically have APRs that are 10 to 15 percent higher than traditional cards for people with good credit scores. Carrying a balance on a high-interest card can result in significant interest charges, so you should find a card with the lowest rate possible.
Most credit cards for bad credit charge an annual fee to maintain the account, either in one large sum or divided into monthly installments. Many charge a variety of additional fees as well, including monthly maintenance charges, account verification fees, credit limit increase fees and more.
All of these fees are charged directly to your balance, where they will accrue interest just like a purchase. Even if you never use the card for purchases, just owning it and incurring fees will cost you money. Plus, credit limits on unsecured cards for bad credit are typically much lower than traditional cards. All of those fees can result in a high utilization ratio, which can have a negative impact on your credit score.
To save money and prevent further damage to your credit score, you should look for a card with the lowest annual fee and least amount of additional charges.
Read the Best Credit Cards for Bad Credit guide for complete information on these key features and how to evaluate them.
Best for cash back rewards and prequalification
Best for no monthly maintenance fee and prequalification
This content is not provided or commissioned by the bank advertiser. Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.
Credit cards are good. Seriously. I think just about everyone should have at least one credit card to help build credit, use for emergencies, fraud protection, and a host of other benefits. But I know that not everyone agrees with me, and many people think that credit cards are bad.
When you’re dealing with credit cards, there are several different things that you should know. It’s important that you understand all of the advantages and disadvantages that you should be aware of when you’re handling your finances. Your finances are one of the most important areas of your life, and it’s important that you’re getting the most out of it.
A reader who has had past difficulties with credit card debt challenged me to stop using credit cards:
Ryan, I challenge you to go three months without using your credit cards! Put the $1000 emergency fund in place, freeze your credit cards (better yet cut them up!), and go the entire first quarter of the fiscal year without the plastic.
She believes credit cards are bad and that no one should use them. She has had problems with debt, so I understand where she is coming from. But even though she doesn’t love credit cards, I think her statement takes it just a little too far. Not everyone is in debt, and many people gain benefits from their credit cards.
This article is going to explore the different advantages of credit cards and some of the different ways that you can use them. Hopefully, this post will answer any questions that you have and give you some insight into the world of credit cards. I know that everybody is different, which means that not everyone is going to need a credit card, but I’m speaking for the majority of people.
1. Build credit history: Charging small amounts and paying them off is a great way to establish credit history. Without credit history, it can be more difficult to get loans (including good loans such as student loans or a mortgage), secure insurance, or even land a job. If you are able to secure a loan without any credit history, your loan rate may be higher as a result.
Having a good credit history can help save you thousands of dollars on all of the major loans in your life. For example, when you apply for a mortgage loan, the difference in an applicant with a good credit history versus a bad history could be thousands of dollars. Holding a credit card, and making timely payments is one of the easiest ways that you can build your credit history.
2. Emergency source of funds: I mean for a real emergency. A real emergency fund is always best, but not everyone has $1000 cash to buy emergency airline tickets, make car repairs, deal with a natural disaster, etc. And in my opinion, paying 15% interest is much better than taking out a payday loan in an emergency. Some payday loans have interest rates near 1000% if left for an entire year.
As we mentioned, having your emergency fund in cash in a savings account is a much better idea, but if you don’t have that available, a credit card can be one of the best ways that you can pay for the bills that pop up. If something were to break or some emergency pop up, it can be difficult to pay for those bills, but that’s where your credit card will come in. It will give you and your family the money that they need.
3. Fraud / Theft Protection: If your card is lost or stolen, you are only responsible for the first $50 in unauthorized charges. Fraud protection for debit is similar, but only if you notify your financial institution within 2 days. If you wait longer than 2 days, you can be liable for up to $500 on your debit account. Fraud and theft protection is non-existent for cash.
4. Disputed charges: When you dispute a charge on your credit card, most credit card companies remove the charge until the dispute is resolved. With a debit card, the money will not be returned unless you can prove the dispute in your favor. With cash, the money is usually gone.
5. Rewards: Many credit cards offer rewards including cash back, airline miles, discounts, rebates, gift cards and many others. Most of these rewards are designed to get people hooked into using the cards or spending more than they would otherwise, but used properly, rewards points can earn you a lot of money. Some credit cards offer a sign up bonus of several hundred dollars – just for opening an account and meeting a minimum spending requirement.
6. Convenience: I don’t like to carry large amounts of cash with me. If you lose it, it’s gone. If it’s stolen, it’s gone. Credit cards are small, convenient, and carry better consumer protections. They are also convenient to use to buy things on-line, or to buy large dollar items. Another, convenience is travel. I will be going on a cruise next week and if I use my credit cards I won’t need to exchange as much currency. Some credit cards don’t even charge a foreign transaction fee.
7. Car rentals: Some car rental agencies will not allow you to rent a car if you do not have a credit card. Some may allow you to rent a car with a debit card, but may lock up a substantial amount of money in your account until you return the car. You won’t be able to use those funds during that time. Many credit cards also provide additional liability insurance when you rent a car. Debit cards? Not so much.
8. Extended warranties: Many credit card companies provide extended warranties on items you purchase with their card. In some cases, the manufacturer’s warranties are doubled. That’s not a bad feature!
9. Short term loan: Credit cards usually have a grace period, after which your payment is due. This can be several weeks, which allows you to earn interest on purchases you have already made. While this may not be a big deal for a hundred dollars, if you charge a thousand dollars every month and add it up over the course of a year, you can actually earn some decent money with this. With cash or debit cards, the money is immediately removed from your account and you do not earn any interest on it.
10. Budgeting tools: Most credit card companies provide detailed transaction logs which are easily downloaded into Quicken, Mint.com, or other free money management tools. This makes budgeting much easier to track and plan. Yes, it can be done with cash, but it is much more labor intensive. And time, as they say, is money.
Honorable Mention (NOT FOR EVERYONE. )
- Credit card arbitrage: (Note:this is only for experienced credit card users and not recommended unless you completely understand what you are doing, and are responsible enough to follow through with it). Credit card arbitrage entails taking a cash advance on an introductory 0% interest credit card offer, investing the money in a bank account to earn interest, and paying minimum payments until right before interest kicks in, then paying the card in full. Some people are able to do this to the point of having $100,000 in credit card debt, but the debt is actually cash which is earning them money in the bank. Use this calculator to determine how much you could earn from 0% balance transfers.
To get the most out of the benefits listed above, the credit card holder needs to pay the entire balance in full every month. When used properly, credit cards can be a very useful addition to someone’s life. When they are not used properly, credit cards can be BAD! In fact, I am an advocate of not using credit cards if that is not the best financial decision for your situation. Even though they do not have as many benefits as credit cards, I also think using debit cards can be a great way to make financial transactions. Always do your research, and please be financially responsible.
The 10 reasons I listed above are benefits for me because I do not carry a credit card balance (I do not practice the “honorable mention” benefit, but it is worth noting). My wife and I have been blessed to have been able to put together a sufficient emergency fund, and we are able to use our credit cards for our purchases and pay them off in full every month. I won’t stop using my credit cards because for me, it is not a problem. In fact, doing so would cost me money.
In my opinion, everyone can benefit from having a credit card if they use it responsibly. The key here is responsible use. If you know you can’t handle it, or don’t think you can, then don’t do it.
If you have any more questions about credit cards or how you can use them, don’t hesitate to contact me today. I would be happy to answer those questions and ensure that you’re getting the most out of your finances. I know that navigating the financial waters isn’t easy, but that’s why I’m here to help. There are dozens and dozens of credit cards on the market, which means that there is one that will work well for you.