Top Unsecured Credit Cards For Bad Credit

March 19, 2018, Written By Jason Steele

Do you have bad credit? Some people end up with a bad credit score as a result of circumstances that are out of their control such as job loss, divorce, or medical bills. Meanwhile, others have a low credit score after making a series of mistakes with their personal finances. Whatever the reason for your low credit score, there are still credit cards that are offered to those whose credit can only be described as bad.

There are two types of credit cards that are offered to people with bad credit. The first type are the secured cards, which require the payment of a refundable security deposit before an account can be opened. These cards work much like unsecured cards, except for the initial refundable security deposit. In addition, there are some credit cards that are offered to people with bad credit that do not require a security deposit.

How credit cards help build credit and your credit score

In order to build your credit history, you must have a loan in some form or another. A credit card of any type offers a line of credit that represents a loan that you must repay, and each payment can be reported to the three major consumer credit bureaus: Equifax, Experian, and Transunion. So as you make on-time payments, you show that you can be trusted to repay a loan, which is what your credit score is designed to represent. In addition, each account you have open adds to your credit history each month, and having an available line of credit will be a factor in your credit score.

How important it is for people with bad credit to be diligent in building their score

Your payment history makes up 35% of your FICO score and is vital to building your credit. Therefore, it is critical that you make all of your monthly payments on time, and they be for at least the minimum balance. Thankfully, there are many tools you can use to help you to make on time payments. For example, most credit cards offer some form of email or text alerts to notify you when your payment is due. In addition, many offer automatic electronic bill payments that will ensure your payments are always made on-time.

Here are four of the top unsecured credit cards to consider if you have bad credit.

Milestone Mastercard

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The Milestone Mastercard is offered to applicants with bad credit, and has very reasonable terms for a product of this type. Cardholders receive all of the benefits of the MasterCard including the MasterCard Global Service program, which is available 24 hours a day, 365 days a year. It offers emergency replacement lost or stolen cards, emergency cash advances, ATM location services and account-related information including any applicable card benefits.

The standard interest rate is 23.9%, and there is a 25-day grace after the close of each billing cycle during which cardholders can avoid interest by paying their balance in full. The annual fee for this card is either $35, $59, or $99 (with a $75 fee the first year). The fee you are assessed will depend on your credit worthiness.

Credit One Bank Unsecured Visa for Rebuilding Credit

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The Credit One Bank Unsecured Visa for Rebuilding Credit allows you to pre-qualify without harming your credit score. Once approved, fees and interest rates will vary based on your credit. The APR on purchases can range from 19.15% - 25.24% Variable, and are slightly higher for cash advances. The fees for cash advances also vary. Those with lower credit will be charged $5 or 8%, whichever is greater, on cash advances, and those with better credit will be charged $10 or 3%, whichever is greater. The annual fee will range from $0 to $99, depending on your credit.

Credit lines will range between $300 and $3,000, depending on the applicant’s credit, and timely payments mean your credit line could increase, though additional fees may apply. Perks of the Credit One Bank Unsecured Visa include 1% cash back rewards, $0 fraud liability, the ability to change your due date, and a mobile app that allows you to manage your account. Additionally, Credit One reports to all three major credit bureaus, and you can monitor your Experian credit score online for free.

First Access Visa Credit Card

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The First Access Visa card charges an $89 processing fee, which is only charged if you are approved for the card. Once approved, you will have access to a $300 credit limit, and your timely payments will be reported to all three credit bureaus. After six months, you may also be granted a higher credit limit if you have used the card responsibly.

You will have to pay an annual fee of $75 in the first year and $48 per year after that. Additionally, you will have to pay a monthly servicing fee of $6.25 after the free introductory year.

Indigo Platinum Mastercard

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The Indigo Platinum Mastercard allows you to pre-qualify for a card without impacting your credit score. The APR is set at 23.9%, but your annual fee will depend on your credit. You will be charged either $59, which is waived for the first year, or $99 per year, which is discounted to $75 in the first year.

Perks of the card include fraud protection for lost or stolen cards and mobile account access. Your account history is also reported to the three major credit bureaus.

Other tips to help you improve your credit

It’s difficult to improve your credit score when you don’t know what it is. Thankfully, many credit cards such as Credit One Visa offer customers a free monthly credit score. By monitoring your credit score each month, you can see how various actions affect your credit, both positively and negatively. In addition, seeing your credit score rise can offer positive reinforcement and encourage you to continue to manage your finances responsibly. By responsibly using one of these top unsecured credit cards, you can watch your credit score rise faster than you may have thought possible.

The information contained within this article was accurate as of March 19, 2018. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.

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.
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