Best Unsecured Credit Cards for Bad Credit
You’ve found yourself with bad credit. It’s okay. It can happen to anyone. One missed payment, one unexpected medical bill sent to collections, and — bam, your credit takes a dive. You don’t have to feel too guilty about it. Credit doesn’t define who you are. But it’s your responsibility to fix your poor credit.
One of the best ways to start fixing your credit score is to apply for unsecured credit cards.
What Is an Unsecured Credit Card?
An unsecured card is a credit card you haven’t secured with collateral as you do with a secured card or a secured debt, like a mortgage. Because there’s no collateral attached to this card, banks have a higher level of risk when they lend to you. Not everyone is going to qualify for an unsecured card because of their credit. Most unsecured cards will require a credit score in the good to excellent range. Some are aimed at users with fair credit though, in the 580-669 range.
If you have a credit score in the 400-500 range, you might have to start out with a secured credit card to build debt and then apply for an unsecured card later down the loan. If you do apply for an unsecured card and you are approved, your interest rates are going to vary depending on your creditworthiness.
Best Unsecured Credit Cards for Building Credit
You can build credit in several different ways. You can increase your credit usage and diversify your types of credit. Applying for unsecured cards does both of these simultaneously. You’ll increase your mix of credit, and you’ll increase your credit limit. Both of these things are good to credit reporting agencies. They see you as being responsible with your credit and will slowly boost your score the longer you’ve had your card.
1. Destiny Mastercard®
Annual fee: $75 the first year; $99 the year after
APR: 24.9%
Destiny is a company designed for individuals with less than perfect credit. They have a decent APR compared to other cards on this list, and a moderate annual fee. But like all the cards on this list, you don’t have to put any collateral down to qualify for this card. And you can prequalify without it affecting your credit score. They also report to all three credit bureaus, so as long as you’re in good standing, your credit will bounce back.
2. Revvi Card
Annual Fee: $75 for first year. After that, $48 annually.
APR: 34.99%
Revvi has over 1,340,074 customers. And it’s card designed for credit recovery offers 1% cash back on every payment you make, not something every card on this list offers. However, this card has an account servicing fee of $6.25 a month. You start out with a usable balance of $225, after maintenance fees are taken out. And after a year, you have full access to all the card’s products — including cash advances.
3. Indigo® Mastercard®
Annual Fee: $75 the first year; $99 the year after
APR: 24.9%
Indigo® Mastercard® is another great card if you’re looking to build credit. They pride themselves on taking care of users who might not have had perfect credit history. The card has a lower APR than some of the other cards on our list. And you’re able to shop wherever Mastercard is accepted. They even have in-app shopping as well. Indigo reports to all three credit bureaus, so it doesn’t matter which credit check someone might need to pull from — Indigo will show up in the accounts.
4. First Access Visa® Card
Annual Fee: $75 for first year. After that, $48 annually.
APR: 34.99%
While the First Access Visa® Card has higher interest rates than some on our list, it has a lower annual fee. It does have a monthly maintenance fee of $8.25 that works out to be $99 a year and a one-time program fee that’s $95. You’ll be given a $300 card limit on this card, and your annual fee will come out of that limit — so you’ll have access to $225 when you get your card.
5. Reflex Mastercard®
Annual fee: Ranges from $75 to $99
APR: 24.99% to 29.99% variable
Reflex Mastercard® from Continental Finance is a card designed for people with no credit to bad credit, making it one of the easiest on this list to get approved for. Continental Finance authorizes users to have up to $1,000 in credit, depending on what you qualify for. But what’s unique about this card is that once you’ve made 6 months of on-time, in-full payments, they’ll double your credit limit from $1,000 to $2,000. Doubling the limit decreases your debt-to-utilization ratio and is especially good for your credit score. Continental Finance reports to all three bureaus as well.
6. Milestone® Mastercard®
Annual Fee: $35 annually
APR: 24.9%
Milestone® Mastercard® has the best annual fee on this list. It’s lower annual fee allows you to spend more money building credit and less on the card itself. The card reports to all three credit bureaus, so you’re building credit while using this card. Unfortunately, your limit depends on your credit rating, so the better your credit, the higher your limit. You’ll want at least a credit score of 580 to apply, or they’ll recommend you try their secured partner card.
7. Total Visa® Card
Annual Fee: $75 the first year, $49 after that
APR: 39.99%
This card is one of the more popular cards on this list. Over 90,000 people apply to it each month. There is a one-time service fee of $89 in addition to the annual fee. The second year there is a monthly maintenance fee of $6.25. They require the program fee in order to activate the card, but you have up to two months to pay the program fee. If you don’t, your application will be returned — but it will still count as a hard pull on your credit, so you want to be very sure before applying to this card that you have the money to fund the program. As a bonus, though, they report to all three credit reporting agencies and tout a robust mobile app.
8. First Digital Mastercard®
Annual Fee: $75 for first year. After that, $48 annually
APR: 35.99%
Like some of the other cards on our list, this card also has a program fee of $98. After the first year, they have a monthly maintenance fee of $8.25, which will be taken out of your account and required to be paid off monthly. The card starts with a $300 limit, and your annual fee of $75 will be taken out of that amount, dropping your balance to $225. Pay the card off, and your balance will rise to $300 again. The card boasts 2,500 5-star reviews.
9. FIT Mastercard®
APR: 29.99%
Annual Fee: $99
Fit Mastercard® is different than the other cards on this list because it doesn’t have a minimum interest charge. This card has a maintenance fee, charged monthly at $6.25. But it reports to all three credit bureaus, and you start out with a limit of $400 that doubles to $800 if you prove to be responsible with your credit.
Final Take
If your credit is bad, getting one of these unsecured credit cards for bad credit could put you on the path to repairing it. Just be sure to use your card wisely and be sure to make your payment on time every month.
Karen Doyle contributed to the reporting for this article.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Sept. 28, 2022.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
This article originally appeared on GOBankingRates.com: Best Unsecured Credit Cards for Bad Credit
