Top Unsecured Credit Cards For Bad Credit

December 28, 2015, 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 three of the top unsecured credit cards to consider if you have bad credit.

Matrix MasterCard Credit Card

MatrixThe Matrix MasterCard Credit Card is offered by Continental Finance to those with a checking account and any credit score, and it boasts an easy application process and a quick decision. It offers an available credit limit of up to $500. The annual fee for this card is $125 the first year, and $96 annually after that. Cardholders also receive a grace period of 25 days, which means they have that amount of time after their statement is issued to avoid interest by paying their balance in full. The standard interest rate for purchases and cash advances is 29.99% APR. This card is accepted anywhere that MasterCard is, and your on-time payments will be reported to the three major consumer credit bureaus.

Credit One Visa with Credit Line Increase Reviews

Credit-One-Bank®-Visa®-with-Credit-Line-Increase-ReviewsCredit One Bank is a large credit card provider with over five million customers nationwide. The standard interest rate for purchases and cash advances is 17.9%-23.9%, depending on your creditworthiness, and the Credit One Visa with Credit Line Increase Reviews card does not offer an interest-free grace period. Cardholders receive automatic reviews of their credit line to be eligible for increases, and this card includes free monthly online credit score tracking. In addition, cardholders receive unlimited 1% cash back on gas and grocery store purchases. Also, text and email alerts are available to remind you of your payment due date. The annual fee for this card is $35-$99, depending on your creditworthiness.

Milestone Gold MasterCard

Milestone MasterCardThe Milestone Gold MasterCard was created to help people build and access credit, and has an annual fee of between $35 and $99, depending on the version. The standard interest rate for purchases of 23.9% APR, and it has a foreign transaction fee of just 1%. Benefits include identity theft resolution service, extended warranty coverage and price protection. Cardholders choose their own custom card design at no cost, and this card is available to those with a previous bankruptcy.

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 December 28, 2015. 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.
View all posts by Jason Steele