What is the Best Bad Credit Credit Card To Use in 2019
It is possible to get a credit card even though you may have a bad credit record. The problem, however, is that most of such credit cards are usually not as good as you may want. This isn’t too big of an issue though because bad credit credit cards are usually useful for helping you build or rebuild your credit score. This improves your qualifications for better credit cards which you can then upgrade to.
If you are in the market for a credit card ideal for bad credit, you will have a choice between two types of cards:
- Secured Cards
Secured cards are our ideal credit cards for bad credit. with a secured card, you are supposed to make a security deposit protecting the issuer in the event that you fail to pay. After using the card for some time, when you decide to upgrade or close the account, the issuer will refund you the deposit provided there are no issues linked to the card. Since these cards require the user to make a security deposit, they are much easier to get as the issuers usually feel secured. Secured credits also tend to charge fair fees making them affordable. You will still be required to provide details on your income though. Serious issues on your credit report and cases of bankruptcy could, however, hinder you from getting these cards.
- Unsecured Cards
Unsecured cards don’t require any security deposits. This may seem like a huge plus but unfortunately, these cards tend to charge extremely high fees. In the end, therefore, these fees make the cards more expensive compared to a one-time security deposit as is the case with secured cards. Unsecured cards also have low credit limits which most people are likely to find annoying.
Choosing a Bad Credit Credit Card
There are numerous bad credit credit cards but not all of them are as good as they may appear. Some of these cards could end up costing you more or worse, destroy your credit score even further. It’s therefore, important to ensure that you are getting the right credit card and the following factors should help you out:
Before applying for a card, make sure that you sit down and make calculations on all the fees that you are going to pay. As we already pointed out, unsecured cards don’t require any security deposits and this is one of their biggest selling points. What most people don’t realize is that they charge high annual fees, maintenance costs, and other fees which can end being too costly. Most secured cards have fair annual fees while others don’t have the fee at all. They also have no hidden charges.
The only major thing you will need to pay for is the security deposit which will be refunded when you want to close or upgrade the credit card. You must make these calculations and choose a card that will be more affordable to have.
Reporting to Credit Bureaus
If the card you are using doesn’t report your payments to the major credit bureaus then you are never going to see any improvements in your credit scores. You must, hence, ensure that the card you are getting reports all the payments you make to these bureaus. Therefore, you should avoid prepaid cards since they don’t really involve any borrowing of money and hence they don’t report payments to any credit bureaus.
Free access to your credit scores
The best credit cards allow their clients to access their credit scores every once in a while. This is very useful as it allows you to monitor your progress and see how you can improve your scores and qualify for better credit cards. Some companies even go as far as offering their clients with free financial educations programs and debt-payment calculators. These resources are useful in equipping you with knowledge on how to improve your credit score and overall financial reputation.
Opportunity to upgrade
An ideal credit card company provides a clear path showing its clients how they can improve to better cards once they improve their credit scores. Make sure that the card you are buying has such terms and they should also be in a position to upgrade you without too many complications. The last thing you would want is to work hard and improve your credit score significantly and have your issuer charging you excess fees on a card with no rewards.
Top 3 Credit Cards for Bad Credit
Here are the three credit cards that are highly recommended to everyone with bad credit:
1. Capital One Secured MasterCard
Capital One Secured MasterCard is our top pick credit card for people with bad credit. This card has very minimal upfront costs that almost everyone can meet. The company also doesn’t charge any annual fees to their clients.
With the Capital One Secured MasterCard, you can get up to $200 line of credit with as little as $49! This, however, hugely depends on your creditworthiness and hence individuals with the worst credit record might have to pay slightly more but it still remains quite affordable. The company might also refund your deposit in case you use the cards responsibly and they will also help to improve your credit line.
How does the Capital One Secured MasterCard work?
Capital One requires the applicants to put down a refundable deposit of $49, $99, or $200 to establish their credit line. You should then go ahead to make your payments in full every month to increase your credit line and also to avoid interests. The higher the deposit the higher the credit line. You can also increase your credit line without necessarily making high deposits. This will require you to make your first five payments on time.
Something else that makes Capital One Secured MasterCard a decent option is that they give you the liberty of choosing your monthly due date! This way, you can select a date that is convenient for you and hence you shouldn’t have any problems meeting the deadline.
This card from Capital One also offers a CreditWise tool that you can use to view and monitor your credit score and progress.
2. Credit One Bank Platinum Unsecured Visa
This is yet another remarkable credit card for everyone with bad credit. The Credit One Bank Platinum Unsecured Visa is perhaps the only of its kind that offers rewards. This card has 1% cash back rewards in your day-to-day purchases. This reward is provided in an automatic statement credit that helps you in paying off your account balances.
The Credit One Bank Platinum Unsecured Visa also allows you to change your due date even after your initial billing period. All you have to do is contact the customer service and they will help you in readjusting the date to six days after or before the current date.
How does the Credit One Bank Platinum Unsecured Visa work?
To use this card effectively and improve your credit score, it is best that you avoid charging anything that you cannot pay for outright. Use it carefully and ensure that you clear all the balances on time each month. Avoid interest payments and you will see your credit score improve in no time.
You should also read through the eligible purchases supported by this card. These include internet, groceries, gas, satellite TV services, dining, mobile phone services etc. and you will qualify for the cash back rewards.
Take note that the Credit One Bank Platinum Unsecured Visa bills annual fees from your account when it is opened. This will affect how much is available on the credit card. If, for instance, the credit line is around $400 with an annual fee of say $60, the actual balance available on the card will be $340.
3. Indigo Platinum MasterCard
The Indigo Platinum MasterCard is probably the best credit card for anyone who has ever filed for bankruptcy. Bankruptcy damages one’s credit scores significantly and it can stick on your credit report for as long as 10 years. This makes it very difficult for you to rebuild your credit reputation with almost all companies in the market. Indigo is one of the companies that won’t disqualify you simply because you have a previous bankruptcy record. They will check whether you still qualify for their cards after considering various other factors thus increasing your chances of rebuilding your credit record.
How does the Indigo Platinum MasterCard work?
Before making your application, you will have to answer a few questions and the results will show you the chances of your application being approved. If approved, you are encouraged to make all your monthly payments on time to avoid penalty APR and boost your credit score.
Unfortunately, Indigo Platinum MasterCard doesn’t have any reward programs and hence you should consider upgrading to a better card after improving your credit score.
Don’t let your extremely bad credit discourage you from rebuilding it. With the above cards, you can change your credit history in a year and see yourself qualify for even better credit cards. Just make sure that you choose a card that is within your means. You should also avoid looking desperate, i.e. applying for multiple cards at the same time as this will only damage your credit score.
Instead, apply for credit cards that you are confident with your qualifications. You can also try out some pre-qualification options in form of enquires or questions like what Indigo Platinum MasterCard offer before making your application.