With the state of the economy, a lot of people are suffering, and it’s especially hard for people with bad credit. The good thing is that there are a few credit cards that are excellent options when it comes to building credit and they are available to people with any credit history.
Here are 3 credit cards for bad credit record holders:
Discover It Secured
This credit card can help you rebuild your credit score or establish a credit history. This credit card allows you to choose the best credit line for your needs by making a refundable security deposit and even gives you 2% cash back on up to $1,000 in purchases each quarter at gas stations and restaurants. With each timely payment, your overall credit score will improve. This credit card has no annual fees and requires only a deposit of $200 to open a line of credit, which is on the low end for secured cards. As your credit score increases over time, you won’t need to make any additional deposits.¹
Indigo Platinum Mastercard
If you have had financial difficulties in the past and can’t seem to find a good credit card provider for yourself, look into getting an Indigo Platinum MasterCard. When you apply for this card you get a soft pull on your credit – not a hard pull. Plus, because this card is an unsecured credit card, you do not need to deposit funds to open a line of credit, but it does have a small annual fee. You can avoid high interest rates and improve your credit score by making payments on time. You could apply for this credit card even if you filed for bankruptcy in the past.²
Credit One Bank Unsecured Visa
You can prequalify for this credit card without lowering your credit score. Plus, if you make your monthly payments on time, you can get a 1% cash back reward on all your purchases. The due dates are very flexible, but depending on your score you may have an annual fee on this card.³
Benefits of Having a Credit Card
Without a credit card, consumers are unfortunately at a disadvantage. Credit helps consumers get through emergency situations, and having access to credit is essential to building a credit score.
Credit cards help build credit and improve your credit score when you make monthly on-time payments. Higher credit scores lead to lower interest rates on loans. A lower interest rate allows you to pay off the loan faster and keep more money in your pocket.
Here are 3 benefits of having a credit card:
1. Access to an instant credit line.
Sometimes expenses need to be paid immediately. A credit card provides credit to pay off these expenses. It’s important to pay off the credit card before the due date so that you do not have to pay interest. If this is not possible in your financial situation, pay the minimum payment, so that you do not have to pay a late fee. Missing a payment lowers your score but paying only the minimum payment does not lower your score.
2. Build your credit.
The credit cards on this page accept consumers that other banks do not. When other banks say no, these credit card companies give you a chance to rebuild your credit.
3. Pay off purchases over time.
Credit cards allow you to make large purchases today and pay off the purchase price over time. Credit cards are a good option if you cannot afford to make a large purchase, but you know you can pay off the interest and the balance over time.
Tips and Tricks to Rebuild Your Credit Score
Having a higher credit score allows you to get lower interest rates on loans, such as personal loans or car loans. Many people who have lower credit scores can raise them, but they have to make the right moves. Here are 3 ways to increase your credit score.
1. Make monthly on-time payments.
When you make on-time payments, it shows that you have a history of paying back credit provided to you. This increases your credit score and allows lenders to provide you lower interest rates, because your score is higher.
2. Open more credit lines.
This does not mean that you should open credit lines and use all the credit provided to you. Opening more credit lines is smart because it helps increase your credit score. When you have more credit available to you but do not change your monthly expenses, the amount of credit you are using is lower. This is called your credit utilization. Opening more credit lines lowers your credit utilization. This increases your credit score, because it shows lenders that other lenders have given you credit and that you have not used all of it.
3. Don’t close unused credit cards.
Just like opening more credit lines decreases your credit utilization, leaving credit cards that you already have open – as long as you can pay the annual fee – is a smart financial move, because it also decreases your credit utilization. When you leave credit cards open the amount of credit that is available to you is higher. When you are not using this credit, your credit utilization is lower and this increases your credit score. Another reason not to close unused credit cards is that it increases the length of your credit history. If you keep your first credit card open, you will have a longer credit history. This is because having a credit account open for a long time increases your “average age of accounts,”¹ which is the average time that you keep a credit account open. When your average age of accounts is longer, your credit score is higher.
Getting access to credit with no credit score or a low credit score is possible by applying to these cards now. The credit options on this page are available to people with no credit or bad credit and have been chosen by CardResearch. Building credit is not easy, but anyone can gain access to credit and improve their credit score by applying to the credit cards on this page.
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