It goes without saying that applying for a credit card with poor credit is extremely difficult. Many credit card issuers require applicants to have a good to excellent credit score.
The conundrum is that it’s impossible to improve your credit score without using your credit. To put it simply, credit is like a muscle. To improve weak muscles, you must exercise.
In the same way, applying for credit cards for poor credit score is a great way to open up the opportunities an excellent credit score can bring. The good news is that there are numerous credit cards aimed towards people with poor credit.
Below, you’ll find a comparison of three of the best credit cards for poor credit:
- Secured Mastercard® from Capital One
- OpenSky® Secured Visa® Credit Card
- Netspend® Visa® Prepaid Card
If you want to make a well informed decision on which credit card is right for you, continue reading below for more information.
1. Secured Mastercard® from Capital One
Like the following credit cards on this list, the Secured Mastercard from Capital One is one of the top credit cards for poor credit. It’s designed to accommodate people who don’t want to pay an annual fee on their road to rebuilding their credit.
This card also offers flexible security deposit conditions, allowing you to make a payment you’re comfortable with. Below, you’ll learn about the specifications, pros, and cons associated with applying for this credit card.
Quick Facts:
- There isn’t an annual fee.
- This credit card reports to all three major credit bureaus: Equifax, Experian, and TransUnion.
- This credit card is accepted across the world.
- By making the minimum security deposit, you’ll earn a credit limit of $200. You can add more money to your account before it opens to increase this limit.
- Cardholders will need a bank account to make their security deposit.
- If you make on-time payments for as little as six months, your credit limit can increase without an additional deposit.
- Members can manage their account 24/7 using the official mobile app or by phone.
Click here to learn more and to view other options
Specifications:
One of the major benefits of applying for this credit card is the $0 annual fee. Though, potential cardholders may want to consider the interest rate before moving forward:
- Annual Fee: $0
- Regular APR: 26.99% Variable
- Introductory APR: $0
- Credit Score Range: 300-629
Credit cards for poor credit are notorious for having pricey interest rates. This is expected since the credit card issuer is taking a chance on you. As long as you make on-time payments with this credit card, you won’t run into any penalties.
You may even be considered for a higher credit limit without making an additional security deposit. This is a huge bonus that many other credit cards for poor credit don’t offer outright.
Who is This Card For?:
The Secured Mastercard for Capital One is a great secured credit card for repairing your credit score. The $0 annual fee is its top benefit. This means that you won’t pay anything to own this credit card.
While the interest rate is on the slightly expensive side, you should only apply in full confidence that you’ll make on-time payments. By doing so, you can graduate to an unsecured credit card with a lower interest rate, rewards, and a higher credit limit.
Pros:
Below, you’ll find some of the advantages of owning the Secured Mastercard from Capital One:
- Anyone with limited or bad credit can apply for this credit card.
- There is a $0 annual fee.
- There isn’t a foreign transaction fee.
Cons:
Not every secured credit card for poor credit is perfect. Here are the noticeable disadvantages of applying for this credit card:
- There isn’t any rewards program. This means you won’t earn rewards points from eligible purchases that you can use to redeem for lucrative offers.
- The APR is pretty expensive. While that’s to be expected for most credit cards for poor credit, this APR can make a lot of potential applicants uncomfortable.
Bottom Line:
If you have bad credit and avoid paying an annual fee, this is the perfect credit card to consider. However, potential cardholders should be mindful of the expensive APR and lack of rewards.
2. OpenSky® Secured Visa® Credit Card
Poor credit isn’t the only obstacle in applying for a credit card. Most credit card issuers expect cardholders to have a bank account. A lot of people don’t have a bank account for a wide variety of different reasons.
If you have poor credit, you should be denied a credit card just because you don’t have a bank account. Thus, the OpenSky Secured Visa credit card allows anyone with bad credit to apply, even if they don’t have a bank account.
There is no hard credit check required, and the interest rate isn’t too expensive for anyone on a tight budget.
Quick Facts:
The OpenSky Secured Visa credit card is an exceptional option for people trying to rebuild their credit score. Below, you’ll find some quick facts surrounding this credit card for poor credit:
- There isn’t a hard credit check. Anyone is free to apply for this credit card.
- You can pay a security deposit as low as $200. This refundable deposit will become your credit line.
- You can build your credit score quickly. This credit card reports to all three major credit bureaus.
- OpenSky claims that 99% of all their customers without a credit score earned one within as little as six months of applying.
- There is a Facebook community for people to share their experiences and insights using this credit card.
- The OpenSky website provides amazing resources and educational tips to help you rebuild your credit.
Click here to learn more and to view other options
Specifications:
In exchange for paying a manageable interest rate, cardholders will need to also pay a $35 annual fee. Below, you can find some more information about this secured credit card for poor credit.
- Annual Fee: $35
- Regular APR: 17.39% Variable
- Introductory APR: $0
- Credit Score Range: 300-689
Pros:
The OpenSky Secured Visa credit card offers all the following benefits to cardholders:
- There isn’t any credit check required. No matter what your credit score is or if you have any inquiries, you can still apply.
- You also don’t need to have a bank account. You can pay your security deposit using a money order or other eligible payment options.
- This credit card reports to Equifax, Experian, and TransUnion. This will allow you to build your credit card instantly within as little as six months.
Cons:
If you are considering applying for this credit card, you should keep these key disadvantages in mind:
- This credit card carries an annual fee. $35 doesn’t seem like a lot of money, but there are other cheaper or free options.
- While the APR isn’t as high as the Secured Mastercard Capital One, it’s still pretty expensive.
- You must pay a $200 minimum deposit. For applicants on a tight budget, this may be an obstacle.
Bottom Line:
Ultimately, cardholders can enjoy a lower interest rate when applying for this credit card. They don’t even need to have a bank account or endure a hard credit check.
However, the $35 annual fee can prevent a lot of people from applying for this credit card.
3. Netspend® Visa® Prepaid Card
If you have poor credit and want to avoid applying for a credit card altogether, you can opt to use a prepaid card. Netspend is one of the premier providers of prepaid cards for all kinds of users.
Quick Facts:
- No bank account or credit check is needed to open an account.
- These cards are accepted virtually anywhere.
- Cardholders are required to pay a monthly service fee.
- There are more than 130,000 cash reload locations across the world.
Specifications:
There are a few fees you should be aware of before applying for this prepaid card, such as:
- Monthly Fee: $9.95
- ATM: $2.50
- Cash Reload: $3.95
- Balance Inquiry: $0.50
To waive the monthly fee, cardholders can enroll for the “Pay-As-You-Go” feature. However, they will then be required to pay $2.00 per purchase.
Pros:
Using this prepaid card has its benefits, which include:
- Cardholders have easy access to withdraw and add cash to their accounts.
- You can receive your paycheck with direct deposit up to two days early.
- There is an overdraft grace period if you accidently spend more cash than what you have available.
Cons:
Before applying for the Netspend Visa prepaid card, here are some drawbacks to consider:
- The monthly service fee can be problematic over time.
- ATM and cash reload services aren’t free.
- Overdraft fees can cost $20 each, and you only receive five attempts per month.
Bottom Line:
If you’re looking for a convenient alternative to using a credit card, the Netspend Visa prepaid card is a great option. However, the monthly service fee isn’t something many cardholders would be comfortable with.
There are also a variety of additional ATM and overdraft fees to be mindful of that can make owning this prepaid card a lot more expensive.
