[Update: Some offers mentioned below have expired. For current terms and conditions, please see card agreements. Disclosure: Cards from our partners are mentioned below.]
What is the best credit card for someone with bad credit? I’m finally out of credit card debt and now I want to improve my credit score. – Walter
Congratulations on getting out of debt! That’s a wonderful accomplishment. You are correct that getting the right credit card can help you boost your score. If you get a credit card and pay your bill in full every month – and on time – you will see your score improve. It will take some time, so just be patient. It’s important, of course, that you don’t get back into debt. But if you feel you’re ready for a credit card, here are a few suggestions for you.
An excellent card for rebuilding credit is the Orchard Bank Classic MasterCard®. When you apply for a card, Orchard Bank will determine if you qualify for a secured or an unsecured card. Don’t despair if you only get offered a secured card, which requires a deposit in a savings account to secure the card. This issuer reports to all three credit bureaus, so you can use the secured card to rebuild your credit history. And you even earn interest on your deposit.
The issuer has three other cards in the unsecured category. If you qualify for an unsecured card, you’ll be offered one of these. The APRs for the unsecured cards range from 14.90-19.90 percent. The APR for one of these cards can be high, so stay focused on paying your bill every month and boosting your credit score. Another downside of these cards is that the annual fee ranges from zero to $60 the first year, and after that, it ranges from $35-$59, based on your creditworthiness.
If you determine that a secured credit card is the way you’ll need to go, you might also consider the Citi® Secured MasterCard®. With this card, you deposit an amount ($200 to $5,000) into a Certificate of Deposit (CD). You earn interest on the CD and the issuer reports to the major credit bureaus so you’ll rebuild your credit history. After 18 months, you’ll be considered for the unsecured Citi® Platinum Select® MasterCard®.
Image: IKEA Boy ♂【J.D Chen】™, via Flickr.com