[Disclosure: Cards from our partners are reviewed below.]
The Best Way to Use an Unsecured Credit Card for Bad Credit
Everyone kept telling you how important it is to check your credit, so you finally did it — only to find out you don’t have the best scores. That’s OK, you can remedy this situation. One way to do so is to consider using a tool designed with you in mind: Credit cards for poor credit.
Typically, people associate secured credit cards with bad credit, but there are unsecured credit cards — credit cards that don’t require collateral to use — out there designed for people who have some work to do on their scores. Note: As with any new plastic you hope to get, it’s important you read the terms and conditions so you know what you’re agreeing to before you sign up for the card. Many of these unsecured credit cards for bad credit have annual fees associated with them that you’ll want to budget for.
Keep in mind, too, that these seemingly instant-approval credit cards should be used responsibly, which means you want to pay your statements on time and try to keep your credit utilization (debt-to-credit ratio) in a good spot — experts recommend staying at 30%, and ideally 10%, of your total credit limit. In fact, the annual percentage rates on these unsecured credit cards are generally on the high side, because bad credit signals you’re a risk to the issuer, so it’s a good idea to try to avoid carrying a balance at all wherever possible. Do this for a while and you’ll likely see your scores improve. To keep an eye on your progress, you can view two of your scores for free on Credit.com.
Here are four of the best unsecured credit cards on the market for people with fair-to-poor credit to consider.
Why We Picked It: With this card, you’ll have help tracking your account. You’ll receive texts or emails about your account usage so you can monitor your spending and make sure you’re paying off your bill on time and helping to improve your credit.
Additional Details: This is the only piece of plastic on the list that gives you a reward perk. On top of building your credit, you’ll receive 1% cash back on eligible purchases, including groceries or when you fill up your gas tank.
Annual Fee: $0 - $99
APR: 19.74% - 25.74% Variable
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Why We Picked It: The Indigo Platinum Mastercard comes with added fraud protection, helping to keep you and your money safe in the event that your card is stolen.
Additional Details: When signing up, you can choose from different card designs to help make this card fit your personality, all at no additional cost.
Annual Fee: $0 - $99*
Total VISA® Unsecured Credit Card
- Checking Account Required
- Fast and easy application process; response provided in seconds
- A genuine VISA card accepted by merchants nationwide across the USA and online
- Manageable monthly payments
- If approved, simply pay a Processing Fee to open your account and access your available credit
- Reports monthly to all three major credit bureaus
- Select your favorite card design from our gallery, for free!
- No-Fee credit line increase opportunities!
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Why We Picked It: If you’re looking for a no-frills unsecured credit card that will just help you build your credit, this is it. Best of all, Visa is accepted at most places, so you won’t be limited in where you can use it.
Additional Details: There is a one-time processing fee of $89 when you sign up for this card.
Annual Fee: $75 the first year; $48 each year thereafter
Milestone® Gold Mastercard®
- Applying is quick and easy with our fast decision process
- Card designs to fit your personality at no extra charge
- Access your account online or from your mobile device 24/7
- Protection from fraud, if your card happens to be lost or stolen
- Accepted nationwide, wherever Mastercard is accepted
- Account history is reported to the three major credit bureaus in the U.S.
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Why We Picked It: This card gives you access to Mastercard Gold Benefits, which include travel insurance and assistance, all at no extra cost.
Additional Details: You’ll have access to your account and bill pay around the clock, as well as the option to customize your card design.
Annual Fee: $35 - $99*
At publishing time, the Credit One Bank Unsecured Visa Credit Card, Indigo Platinum Mastercard, TOTAL Visa and Milestone Gold 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.
This post has been updated. It was originally published Nov. 3, 2016.