Credit Cards For Bad Credit Or No Credit
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Millions of Americans have either bad credit or no credit at all. When you are in this situation, it can be extremely difficult to establish a credit history. But without a credit history, it is also a challenge to be approved for a new credit card account. Thankfully, there are credit cards that are specifically designed for people who have bad credit or no credit.
There are many reasons why people might have bad credit. For example, some have trouble paying their medical bills while other have payments that are missed during a divorce. Other times, people have bad credit following job loss or a foreclosure.
In addition, there are some that have no credit at all. This includes young adults and recent immigrants who have never borrowed money. Other people with no credit are those who have never taken out a loan in their lives, only to realize that they will have trouble being approved for a credit card because they have no credit history at all.
If you have bad credit or no credit, consider these four cards:
Capital One is one of the top credit card issuers for people with all credit histories, but it also offers a secured card for those with bad credit or no credit. New applicants first submit a refundable security deposit of $49, $99, or $200, depending on their creditworthiness. Then, you will receive a credit line between $200 and $3,000, and your card will work just like any other credit card.
You will receive a statement each month, and must make a minimum payment. Capital One offers its Credit Tracker app, which allows you to watch as your credit improves with on-time payments. When you make on-time payments for the first five months of your account, you can receive a higher credit line automatically. Other benefits include extended warranty coverage, auto rental insurance, and a price protection policy. The standard interest rate for purchases is 24.99% variable APR. There is no annual fee for this card, and no foreign transaction fees.
Citi is another major bank that offers a secured credit card to people with bad credit or no credit. New customers start by providing a refundable security deposit of between $200 and $2,500 when submitting their application. Once approved, this card’s credit limit will be equal to the amount of the secutity deposit.
Benefits include worldwide rental car insurance, and trip cancellation and interruption coverage. You also receive extended warranty coverage as well as a damage and theft protection plan. Another benefit is that Citi is a major retail bank. If you already have a credit or savings account with Citi, then you can manage all of your accounts in one place, using the same login. In addition, making credit card payments from another Citi account is simply a matter of transferring funds within the bank, rather than making a payment to a different company.
This card can be used anywhere MasterCard is accepted. It has a standard APR 22.24% for purchases. There is no annual fee for this card, but it does have a 3% foreign transaction fee.
If you are a student with no credit history, this could be the right card for you. The Journey® Student Rewards Card from Capital One® offers 1% cash back on all of your purchases, and an additional 0.25% rewards when pay on time each month. You can also use Capital One’s CreditWise program to monitor your credit score each month. In addition to offering you a credit score, this program includes a what-if simulator to let you see how your credit score can be affected by potential future decisions.
Cardholders also receive automatic access to a higher credit line after making five on-time payments as part of its credit steps program. Cardholder benefits include extended warranty coverage, auto rental insurance, and a 24-hour travel assistance hotline. The standard interest rate for payments is 20.24% APR. There is no annual fee for this card, and no foreign transaction fees.
Credit One specializes in offering cards to those with bad credit or no credit history, and it is the official credit card of NASCAR. For those with rebuilding credit, the Official NASCAR® Credit Card from Credit One Bank® offers 1% cash back on all gas and automotive purchases, and double cash back on all NASCAR.com purchases.
Cardholders can stay informed about their account using alerts that can send notifications via email or text messages. You are also protected against fraudulent charges by a Zero Fraud Liability policy.
This card features a minimum credit line of $300, not including any annual fees owed. The interest rate and annual fee that you receive will vary with your credit range, but those with rebuilding credit will receive a 16.65% – 23.90% variable APR and an annual fee between $0 – $99, depending on their creditworthiness. There is also an authorized user participation fee of $19 annually.
About Jason Steele
Jason Steele is freelance journalist and an expert on the credit card industry. He contributes to several of the top personal finance sites, and his work is syndicated to mainstream outlets such as MSN Money, Yahoo! Finance, and Business Insider.