Best Credit Card for Bad Credit 2019

21 Nov 2019

Credit cards have become an integral part of our daily spending. With a plethora of rewards systems and cash backs offered by the credit card companies, it is natural for most of us to fall for it. But, an important criterion to get a credit card is good creditworthiness and excellent credit score.

What if someone doesn’t have a good credit score?

What is someone falls below the defined range of good credit asked by the companies?

Will such a person never get a credit card?

The answer is “No.” Credit card companies have leveraged their policies and have come up with a solution for the same. They have the provision for a person with bad credit score to get a credit card. However, such cards might be secured, or they come at higher interest rates as compared to the others.

What is the bad credit score?

A credit score or rating showcases the financial health of an individual. A good credit score range from 650-750 and above. Individuals are having a good credit score face no problem to get credit cards or loan. However, those who fall in the slab of 300-649 are considered as poor credit scorer or bad credit scorer. Such individuals may get a credit card, but the offers might not be as lucrative. Still, some companies charge zero annual fees and offer 1% cashback rewards on purchases.

When it comes to choosing the right credit card for a person with poor credit score then secured cards are the best. They charge the lowest fees and also offer great deals. The right credit card for most people with bad credit is going to be a secured card. Secured credit cards charge the lowest fees and offer the best approval odds.

It’s imperative that you should make a continuous effort to improve your credit score all the time, to be able to get the best of the offers from creditors/lenders. But, you will find it tough to raise your score without getting an opportunity to ‘reconstruct’ your credit profile. There exist credit cards for bad credit who allow you to re-establish yourself in the minds of the creditors, with a series of timely payments and this is regarded as one of the better ways to raise your credit score. But, at the same time, you won’t be able to avail the benefits, if you do not manage your credit well enough.

Now, we will look at 4 popular credit card options that are designed specifically, keeping in mind the distinct needs of borrowers with poor credit.

  1. Prepaid Cards

These Credit cards are excellent options for borrowers with poor credit. The unique thing about such a credit card is that it does not lend any money to you. Rather, you decide to put a certain amount of money into your own

account and amount is deducted from it, every time you make a purchase. You are in no need of incurring any interest as there is absolutely no space for any overdraft here. These cards are comparatively easier to get too. All you need to do is to provide some basic banking information and your prepaid credit card will be approved.

  1. Low Balance Cards

Many creditors offer credit cards for bad credit, with a string attached, named the ‘low balance’ option. These credit cards do not let you spend extravagantly in a particular month but helps you to improve your credit profile and if you are able to do so, they increase your credit limit. Do bear in mind that ant lender/creditor assesses the risk associated in lending money to you, when you actually apply for a credit card. Once they are sure about your enhanced credibility and reliability, they will come over to offer better and cheaper rates/perks to you.

  1. Secured Credit Cards

When it comes to choosing the right credit card for a person with poor credit score then secured cards are the best. They charge the lowest fees and also offer great deals.

These credit cards may charge a higher Annual Percentage Rate (APR) from you, very much like the unsecured credit cards, but with one striking difference. These credit cards come with less rigid qualifying conditions as the card balance is agreed to have been ‘paid’ already by the cardholder in full. 

 These credit cards work similar to a normal savings account debit card , albeit with a difference. Depending on the APR, a monthly fee is imposed on the outstanding card balance amount. A nominal finance charge may also be levied on these balances.

  1. Pre-approved & Acceptance Guaranteed Credit Cards *

You may have noticed that the name of this group of credit cards is accompanied by an asterisk. This means certain qualifying conditions are needed to be fulfilled by you before you can avail these credit cards with bad credit.

The time at residence, credit rating, time of employment and income are some of the most common qualifying conditions in this regard, with the nature and extent varying from card to card. In general, most credit cards with bad credit would require an uninterrupted income of six months and beyond and an annual income of $12000 or more. Many creditors also look for a minimum residency criterion of six months at the present address.

Some financial institutions may attach a higher APR for borrowers with a low credit rating. They may also charge a higher annual fee or even can ask for a security deposit from borrowers in this category.

How to Get a Personal Loan with a Bad Credit

How to choose the best credit card for bad credit?

Well, if you have a bad credit score, don’t just rush to get the card, instead think about why you need the card and compare the various options so that you end up getting the right card. Here are some of the tips that you must consider:

  • Compare credit card fees- It is imperative that you must compare the various prices charged by the credit card companies. Check for the annual fees, monthly fees, late payment charges, etc. before finalizing the one.

  • Try to get secured cards –If you have a bad credit score, try targeting the secured cards as they have a higher probability of getting approved. Moreover, they have lower fees as compared to other cards. These cards require you to keep something as safety deposit which acts as collateral or credit line. Thus, you get the card approved easily.

Tabular Representation of Credit Cards for Bad Credit Score:

Name of the Card

Ideal For

APR

Annual Fees

Discover it Secured card

Secured

Variable rate of 24.99%

No Annual Fees

Credit One Bank Platinum

No deposit

Variable rate of 26.99%

No Annual Fees

Green Dot Visa Secured Credit Card

No Bank Account

19.99%

$39

OpenSky Secured Visa

Secured and Instant Approval

Variable rate of 19.39%

$35

Capital One Secured Master Card

No fees

Variable rate of 26.99%

No Annual Fees

Citi Secured Master Card

There is no processing fees

Variable rate of 24.74%

No Annual Fees

Indigo Master card

Bad credit score or people with no credit score can apply for this

23.9%

$0-$99

There are many other credit card companies, but these are some of the most popular choices. You can do the comparative analysis of credit cards based on the categories mentioned above and choose the right option for yourself.

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