In general, an unsecured credit card that’s specifically designed for someone with bad credit does require an initial security deposit to get approval. That doesn’t necessarily mean these are better than secured cards, it just means they’ll have more strict approval requirements, likely higher fees and not a lot of spending power (really not a lot more than cash). An unsecured credit card will also usually have a very low spending limit, one that can’t be increased just by paying more like a lot of credit cards can be.
How to Get A Credit Card With Bad Credit
But still, a credit card like this can be very useful for helping someone rebuild their credit, or to provide some emergency financial flexibility. An important note, though: unsecured credit cards for people with bad credit will often have interest that’s double the normal credit card, so people that apply for an unsecured card need to keep a close eye on what they spend an have a plan to immediately pay it off. People who are applying for an unsecured card to help raise their credit score need ot make sure they get one that reports to all the major credit bureaus.
What Are The Best Credit Cards For Bad Credit That Don’t Require A Deposit?
Many credit cards for people with a low credit score require an initial deposit that becomes the first credit limit. Fortunately, there are some unsecured credit cards for bad credit with no deposit necessary. An initial deposit can take away from a person’s spending power at first, so here’s a look at some of the very best credit cards for poor credit that don’t make the applicant have a deposit.
Milestone MasterCard
- 23.9% ARP
- $35, 59, or $99 annual fee, depending on the applicant’s creditworthiness (with a $75 fee the first year)
- 25 day grace period at the close of each business cycle where the cardholder can avoid all interest by paying their debt completely
- Mobile access is provided to all Milestone card holders, making it easier than ever to track a balance or make a payment
- A credit score of 620 to 660 is the primary target applicant for the Milestone card (it’s impossible to say for sure if a lower score will be approved, but quite often, they will be)
The Milestone Gold MasterCard is geared towards people who have poor credit, and actually has somewhat reasonable terms for a card like this. As an added bonus, cardholders can create their own custom card design at no additional charge, plus cardholders get the same MasterCard Global Service program benefits that any other cardholder gets (offering 24/365 emergency card replacement stolen or lost cards, emergency cash advances, and more).
The fees on this card are among the lowest on this list, as most unsecured credit cards have a monthly fee or even a fee for every transaction. Once the annual fee is paid with this card, there are no more fees or interest unless a balance is carried on the account. This is maybe the best unsecured credit card for bad credit.
Credit One Bank Credit Card with Gas Rewards
- Annual fee of somewhere between $35 and $75 depending on the applicant’s creditworthiness for the first year, and $35 to $99 for each year after that (also depending on credit history)
- $19 annual “user participation” fee
- No grace period, meaning interest is tallied at the posting date when each purchase is made
- Annual interest rate that’s somewhere between 17.9% and 23.9%
The one biggest unique thing about the Credit One Bank Credit Card is that it’s a credit card for people with bad credit that comes with a rewards program. When using this card, account holders will get 1% cash back on all eligible gas purchases. It doesn’t sound like much, but free money is never bad, and adds up over time! As long as the account is not delinquent, cash back rewards will pile up. Another great thing about this card is that people can get pre-qualified without impacting their credit score. And if the first six payments are made on time, Credit One will give the account holder a chance to get a credit line increase, meaning an increase in credit score for both paying on time and for having a higher credit limit.
The Credit One Bank Credit Card even lets cardholders see their credit information for free each month with their online credit score tracking feature, making this card an excellent choice for someone looking to rebuild their credit.
First Premier Bank Forward Credit Card
- The initial credit limit on this card will be $300, which turns in to about $225 with the annual fee of $75 that’s charged
- After the first $75 annual fee, the annual fee becomes $45 a year and $6.25 a month after that (if the credit limit is $300). For a credit limit of $300, the annual fee is the same outside of the first, which becomes $100
- Regular ARP is 36%, and balance transfers are not allowed on this card
- There is a 27 day grace period after the payment due date when interest can be wiped away, but the maximum late fee that can be assessed is $38
This card does report to Experian, TransUnion, and Equifax, meaning it’s a good choice for someone who is trying to build up their credit score. As long as the payment is made on time, this card will increase the holder’s credit score. This card has a cash advance fee of 5%, with a minimum of a $6 fee.
One major downside to this card is that it does have a one time processing fee of $95 that has to be paid before the account can be opened. If that processing fee is not paid within 90 days after application, the application is withdrawn. Another important thing to be wary about is that every time this account is eligible for (and approved for) a credit limit increase, a fee of 25% of the amount of the increase will be charged to the account.
Indigo MasterCard for Less than Perfect Credit
- Annual fee of $0 to $99 depending on creditworthiness
- Regular APR of 23.9%, which is towards the lower end when compared for other credit cards for bad credit
- The max late fee that can be charged on the Indigo credit card is $37, and the max over limit fee is $37 as well
- A big bonus to this card is no cash advance fee for the first year, and either $5 or 5% later (whichever is greater)
For people who are trying to get a credit card with bad credit, there’s one major plus with the Indigo MasterCard for Less than Perfect Credit – the fact that users can pre-qualify for a card without affecting their credit score. Someone who is interested can see exactly what sort of credit limit they could get, or find out if they can get a card at all without damaging their credit score.
Perhaps the biggest advantage to this card is that there can be no annual fee if the applicant is deemed worth enough. Most applicants for this card will not receive that offer, but a few will, and for those, this is maybe the best card available.
The Indigo Mastercard does report to all three major U.S. credit bureaus, meaning it’s a good start for people who want better credit.