- Annual fee: $0 – $99.
- APR range: 17.99% to 23.99% Variable.
- Rewards: 1% cash back.
- Other features: Monitors for higher credit line eligibility with automatic alerts.
The name of this card says it all – the Credit One Bank® Visa® for Rebuilding Credit is designed to help you rebuild credit. All of your payments will be reported to three credit bureaus, which means that if you make on-time payments your credit score will increase over time.
A big benefit of this card is the 1% cash back rewards on eligible spending. Since most credit cards for poor credit borrowers don’t offer any cash back rewards, this can be enticing.
In contrast, the biggest drawback is the potential lack of a grace period to make payments without incurring interest charges. You’ll find out whether or not you’ve received a grace period after you apply for the card. If there isn’t a grace period, you could incur interest charges on the day you make the purchase. With that, it is critical to be careful with your spending if you don’t receive a grace period.
Summary of the best unsecured credit cards for bad credit
How I came up with this list
Curious about how these credit cards made the cut? Here’s how I came up with this list:
Cards that work with low credit scores
If you are looking for a credit card with bad credit, the options can be somewhat limited. Unfortunately, many credit card issuers are unwilling to work with you if you have a poor credit score or no credit history at all.
With that, I only included cards that can work with low credit borrowers.
Reported to major credit bureaus
If you have bad credit, chances are you want to improve that credit score. But if the issuer doesn’t report your payments to the big credit bureaus, your score is unlikely to rise over time.
I selected cards that report to the major credit bureaus. This should help you boost your score with responsible payments.
Low annual fee
I only put cards on this if it had an annual fee of $100 or lower. You’d be surprised how quickly annual fees can add up!
What is an unsecured credit card for bad credit?
If you have bad credit or no credit, it can be difficult to find a credit card. In general, credit scores under 600 are considered ‘bad.’ Although this is not a reflection of your personal character, it can impact your ability to open an unsecured credit card.
In many cases, people with bad credit resort to secured credit cards. A secured credit card will require a deposit to open which will usually match your credit limit. An unsecured credit card doesn’t require a deposit to get started.
If you don’t want to make a deposit for a secured credit card, then looking for unsecured credit cards that work with bad credit is a good option.
Why should (or shouldn’t) you use an unsecured credit card if you have bad credit
So is an unsecured credit card right for you?
Why you should use an unsecured credit card
If you have bad credit, an unsecured credit card can help you build or rebuild your credit score. An unsecured credit card is a great choice if you are able to manage your spending responsibly and make on-time payments.
Once you’ve built up your credit score, you can transition into a credit card with better perks.
Why you shouldn’t use an unsecured credit card
An unsecured credit card might not be a good idea if you are easily tempted by a higher credit limit. If you overspend with an unsecured credit card, it could end up hurting your credit score instead of helping.
Most important features of unsecured credit cards for bad credit
Here’s what to keep an eye out for:
A high annual fee could be a big issue for your budget. Make sure that you are able to comfortably afford a card’s annual fee before applying.
The APR of a credit card is an important factor to consider. A lower APR can mean fewer interest charges. But if you are planning to make on-time payments within a grace period, the APR may not be as big of an issue.
A grace period between your purchase and the interest charges is key. If there isn’t a grace period, you could get stuck paying more interest charges than you anticipate.
The goal of an unsecured credit card for bad credit is to boost your credit score. With that, it is critical that the issuer reports your payments to the major credit bureaus – Experian, Equifax, and TransUnion.
After you consider the features above, other perks like cash back and protections can come into play. Although extra perks shouldn’t necessarily be the deciding factor, it is worth choosing a card that has perks that you can actually use.