If you have bad credit you’re in for a bumpy ride in your search for a credit card. That’s not to say that there aren’t any offers available, because there are, but many of them are so downright ridiculous and unscrupulous that it makes sense to leave them alone. Don’t be sucked in by offers that seem too good to be true either because they usually are. Never fear we’ve presented some tips for choosing credit cards for bad credit and highlighted some of our top picks just for you. Get ready, set and go select your card.
First Things First: Check Your Credit Score
Get a clear idea of your credit score before you go searching for credit cards. Federal law makes provisions for one free credit report from each of the three main credit bureaus in the United States. During your search for a credit card for bad credit you will no doubt come across a number of offers promising rewards and no introductory APR. Read the terms and conditions carefully before you get roped in by these offers. Many of them will burden you in hidden fees and high interest rates so use good judgment when making a decision.
If your credit score is really bad don’t expect an interest rate that is lower than 15% APR and certainly reward cards may be out of your reach for now. Get a card with a reasonable offer and focus on rebuilding your credit by paying your card on time and soon your diligence will pay off. Here are some of our favorite credit cards for people with bad credit.
Capital One Secured MasterCard
A secured credit card is the way to go if you have bad credit or no credit at all. There is no better secured credit card than the Capital One Secured MasterCard. Bad credit consumers are rarely turned away and the annual fee of $29 is lower than most other secured credit cards.
Another good benefit of this card from Capital One is the low deposit which by the way can be paid in installments. You’ll have up to 80 days after signup to pay the deposit which ranges from $49-$200 for a $200 credit card limit.
Use the Capital One Secured MasterCard to rebuild your credit and once your score has improved close the account, get your deposit refunded and move on to a card with lower fees.
Capital One Newcomers
If you’re an immigrant to the United States you’ll need to start building credit from scratch. The Capital One Newcomers card is designed specifically for immigrants who need to establish credit. It has no annual fees and comes with special rewards that card holders can take advantage of. No foreign transaction fees, 2% cash back on travel and 1% cash back on all other purchases are just some of the amazing benefits of this secured credit card.
It pays to be realistic about your circumstance. Don’t expect to get the same benefits as people with impeccable credit. Rewards, low interest rates and waived annual fees are out of your reach for now. Even so steer clear of inflated interest rates and excessive fees from providers looking to exploit your circumstance.
You might have to choose between low interest and high fees or high interest rates and low fees. If you plan to pay off your balance every month then the latter would be your best option. Avoid programs that charge interest rates higher than 30%.
You credit union is another option that you can check out for secured credit cards. There you’ll get a card with an interest rate that won’t exceed 18% and you probably won’t have to worry about late fees either.