[DISCLOSURE: Cards from our partners are reviewed below.]
If you find yourself struggling with debt, you’re not alone. Millions of Americans deal with debt every day. And right alongside debt usually comes an ailing credit score. So how do you get yourself back on track? It all starts with a plan. By using a credit card responsibly, most people can improve their credit faster than they could imagine. Unfortunately, it’s hard to get a credit card when you have bad credit. You do have choices, though, and most come in the form of a secured card.
What’s the difference between a secured and an unsecured credit card?
The biggest difference between a secured credit card and an unsecured credit card is that the issuer requires a deposit for a secured card. Because secured cards are meant for people with less-than-ideal credit, this offers protection for the card issuer. The deposit also determines the cardholder’s credit limit.
Here’s a look at some of the best secured and unsecured credit cards on the market this year.
Our Picks for the Best Secured Credit Cards
Discover it Secured Card
The typical secured card is pretty simple. It gives you the chance to rebuild your credit, but it doesn’t offer many perks. The Discover it Secured card is a little different. With it, you will earn 2% cash back on up to $1,000 each quarter at restaurants and gas stations. Plus, after 12 months with the card, Discover will match your earnings. You will still be required to place at least a $200 refundable deposit, which will act as your credit limit. After eight months, Discover will assess your account and consider moving you to an unsecured card. There is a $0 annual fee for this card and its variable APR is 23.99% Variable on purchases & balance transfers.
Capital One Secured Mastercard
Most secured cards offer their cardholders a credit limit equal to the deposit placed on the account. However, the Capital One Secured Mastercard will allow a cardholder to put down either $49, $99 or $200 and receive a $200 limit. It all depends on your credit standing.
If you make your first five payments on time, you may be able to receive a higher limit without having to put down any additional deposit. Capital One will report your credit utilization and payments to the three major credit bureaus. The annual fee for this card is $0, and the variable APR on purchases and balance transfers is 24.99% (Variable).
One of the big drawbacks to most secured cards is their high APR. However, one of the few secured cards offering a lower APR is the OpenSky Secured Visa credit card. While this card does come with an annual fee of $35, it offers a variable APR of 18.39% Variable.
When you apply for the OpenSky Secured Visa card, there is no credit check, which means a hard inquiry will not appear on your account. You will still be required to place a deposit between $200 and $3,000, which will serve as your credit limit. This card reports to all three of the major credit bureaus.
Our Picks for the Best Unsecured Credit Cards
Credit One Bank Unsecured Visa Credit Card
The Credit One Bank Unsecured Visa credit card is completely unsecured, which means no security deposit is required. The focus is on rebuilding credit, which will be helped along by them reporting details to all three credit bureaus. This card also offers the opportunity to earn rewards. Cardholders receive 1% cash back on eligible purchases. You can get pre-qualified for this card, which will give you an idea of your approval chances before you apply and have a hard inquiry placed on your credit report. Depending on your creditworthiness,the annual fee is $0 - $99. The card comes with an APR of 16.99% - 24.99% Variable on purchases.
Indigo Platinum MasterCard
Another good unsecured card for those with poor credit is the Indigo Platinum MasterCard. As with the Credit One Bank Unsecured Visa card, you can get pre-qualified to get you an idea of whether you’ll be approved without a hard inquiry. Depending on your creditworthiness, there will be an annual fee of $0-$99. The variable APR is 23.9% on purchases.
At publishing time, the Discover It Secured Card, Capital One Secured Mastercard, OpenSky Secured Visa Credit Card, Credit One Bank Unsecured Visa Credit Card, and Indigo Platinum MasterCard are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, these relationships do not result in any preferential editorial treatment. This content is not provided by the card issuers. Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuers.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.