best 2020

Best Bad Credit Credit Cards of 2020

A credit card designed specifically for those with bad credit can be a great option to help improve your credit and get back on track financially. The fact is, credit cards that are designed for people with bad credit let you get approved when others won’t, giving you a chance to prove you can use credit responsibly as well as pay your bills on time.

2020-Best-Bad-Credit-Credit-Cards© Money; Getty Images 2020-Best-Bad-Credit-Credit-Cards

While these credit cards don’t offer the best rates and terms, keep in mind that you don’t have to use one forever. The whole point of applying for a credit card created for applicants with poor credit is to give yourself the chance to improve your credit score so you can later switch to a card with better rates and rewards later on. With enough time and responsible credit use under your belt, you could even upgrade to a cash back or travel rewards credit card.

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But, let’s not get ahead of ourselves. If your FICO credit score is in the poor range at 579 or lower, or even if your score is considered “fair” at 580 to 669, you might consider utilizing a “bad” credit credit card to turn your situation around. For the purpose of this guide, we took the time to compare all the best credit cards for bad credit to see how they stack up. Keep reading to learn about the most beneficial cards in this space and how you can use them to your advantage.

Important Things to Know About Credit Cards for People With Bad Credit

  • Credit cards for people with bad credit are often secured credit cards. With a secured credit card, you’ll need to put down a refundable cash deposit as collateral in order to secure a small line of credit. Keep in mind, however, that you’ll get your security deposit back when you close your account or upgrade your card in good standing.
  • Since bad credit credit cards are geared to consumers with less than stellar credit, they tend to come with high interest rates and more fees than most. Some cards even charge an application fee.
  • A handful of credit cards for people with bad credit let you earn rewards on your spending. While earning cash back is a major plus, keep in mind that rewards are only beneficial if you don’t wind up overspending and never incur interest charges by carrying a balance.
  • Make sure to compare credit cards for bad credit in terms of their annual fees and other fees, and whether they’re secured or unsecured.
  • Also note that some credit cards for people with bad credit let you get prequalified online without a hard inquiry on your credit report. Instead, prequalifying will leave you with just a “soft” inquiry on your credit report, which will not impact your credit score in the same way a hard inquiry can.

Best Bad Credit Credit Cards of 2020

This list of the best credit cards for poor credit can help you narrow down your options. The following cards offer some of the lowest fees, fairest terms, and best benefits of all cards in the category:

  • Total Visa® Credit Card: Best Unsecured Credit Card for Bad Credit
  • Discover it® Secured: Best Secured Card for Rewards
  • Capital One® Quicksilver® One Cash Rewards Credit Card: Best for Rewards Overall
  • Capital One Secured Mastercard®: Best for Those With No Credit
  • Green Dot Platinum Visa® Credit Card: Best Secured Card with a High Limit
  • Credit One Bank® Unsecured Platinum Visa®: Best for Getting Prequalified Online

Best Credit Cards for Bad Credit: Reviews

Before you sign up for a secured or unsecured credit card from this list, it makes sense to take a closer look at each card’s benefits and fees. The card reviews below make it easy to compare credit cards for bad credit based on the factors you care the most about.

Total Visa® Credit Card: Best Unsecured Credit Card for Bad Credit

The Total Visa® Credit Card is ideal for consumers who want to build credit without putting down a cash deposit. This unsecured credit card is available to consumers with all kinds of credit profiles, and it’s possible to get approved online in a matter of minutes. The biggest benefit of this card is the fact all your monthly payments are reported to the three credit bureaus, meaning you can use it to improve your credit score over time.

Upfront costs are high. You’ll pay $89 just to apply for the Total Visa® Credit Card, and a $75 annual fee applies the first year (annual fee is $48 for subsequent years). You do get the option to choose your card’s design, however, and you can qualify for manageable monthly payments.

Summary of benefits:

  • Reports to all three credit bureaus
  • Easy to qualify for with poor credit or no credit
  • No security deposit required
  • Get a decision in as little as 60 seconds

Discover it® Secured: Best Secured Card for Rewards

The Discover it® Secured is easily the most rewarding secured credit card on the market today. This card does require a cash deposit as collateral, but you’ll earn 2% back at gas stations and restaurants on up to $1,000 spent in those categories each quarter, plus 1% back on all other purchases. Discover will also double all the rewards you earn after 12 months.

The Discover it® Secured doesn’t charge an annual fee or an application fee, and you get a free look at your FICO score on your statement each month. This card also reports all your credit movements to the three credit bureaus, so you can use it to improve your credit slowly over time.

Summary of benefits:

  • Earn 2% back on up to $1,000 in spending at gas stations and restaurants each quarter, plus 1% back on everything else
  • No annual fee or application fee
  • Free FICO score on your monthly statement
  • Reports to all three credit bureaus

Capital One® Quicksilver® One Cash Rewards Credit Card: Best for Rewards Overall

The Capital One® Quicksilver® One Cash Rewards Credit Card is the best rewards credit card for bad credit on our list, but you do need “average” or “fair” credit to qualify. This card is unsecured, meaning you won’t have to put down a cash deposit if you get approved.

The rewards proposition this card offers is easy to understand. You’ll earn a flat 1.5% back for each dollar you spend without any spending caps or limits. A $39 annual fee does apply, but you won’t pay an application fee. You can also qualify for a higher credit limit with this card after you make on-time payments for five months in a row.

Summary of benefits:

  • Earn 1.5% cash back on all your spending
  • $39 annual fee
  • Qualify for a higher credit limit after five months of on-time payments
  • Get free access to your credit score as well as credit-tracking tools using Credit Wise from Capital One®

Capital One Secured Mastercard®: Best for No Credit

When you have a limited credit history, you need a good place to start. The Capital One Secured Mastercard starts you off with a $200 line of credit after you make a minimum refundable deposit of $49, $99 or $200, depending on your credit history. You can also deposit more money to receive a higher line of credit. Capital One will then automatically review your account after as little as six months in order to be considered for a higher line of credit.

Capital One is a respected credit card issuer that offers you plenty of benefits such as rental car insurance, extended warranty coverage and travel accident insurance. Best of all, there’s no annual fee for this card.

Summary of benefits:

  • No credit history required
  • Minimal deposit required
  • Strong benefits
  • No annual fee

Green Dot Platinum Visa® Credit Card: Best Secured Card with a High Limit

While many secured credit cards only grant you a line of credit up to $500, the Green Dot Platinum Visa® Credit Card lets you secure a much higher limit if you’re willing to put down a larger deposit as collateral. In fact, this credit card could come with a limit as high as $5,000 depending on your deposit and other factors.

The Green Dot Platinum Visa® Credit Card does come with a $39 annual fee, but you can apply online and fund your account with ease. Good credit isn’t required to get approved, but you can use this card to improve your credit slowly over time since your payments will be reported to the three credit reporting agencies: Experian, Equifax, and TransUnion.

Summary of benefits:

  • Qualify for a credit limit up to $5,000 with an equal security deposit
  • Get approved online
  • $39 annual fee applies
  • Reports to the three credit bureaus

Credit One Bank® Unsecured Platinum Visa®: Best for Getting Prequalified Online

The Credit One Bank® Unsecured Platinum Visa® is an unsecured credit card, meaning you don’t have to put down a cash deposit to get started. This card does charge an annual fee up to $99, but you’ll earn 1% back on eligible purchases and you can qualify for automatic credit limit increases based on responsible credit use.

The Credit One Bank® Unsecured Platinum Visa® is popular with consumers because it offers the option to get prequalified online without a hard inquiry on your credit report. You can also qualify with just average or poor credit.

Summary of benefits:

  • Reports to the three credit bureaus
  • Get prequalified online and without a hard inquiry on your credit report
  • Annual fee from $0 to $99
  • Earn 1% back on eligible purchases

How We Found the Best Credit Cards for Bad Credit of 2020

There are all kinds of credit cards for bad credit available to consumers today, but they’re not all created equal. Some cards have higher than average interest rates and many charge annual fees on top of application fees. Here are all the factors we considered when coming up with our list of top cards for bad credit this year:

Monthly Credit Reporting

The most important factor we considered for cards in this category was monthly credit reporting. To make a credit card for bad credit work in your favor, all your monthly payments and balance details need to be reported to the three credit bureaus each month. When this happens, you have the best chance at improving your score over time.

Rewards Programs

While rewards may not be the most important factor you look for in a credit card for bad credit, we still gave precedence to cards in this category that offer cash back. After all, earning 1% or more back on all your purchases can help you rack up rewards in a hurry. Plus, cash back can help make up for annual fees and any security deposits you had to put down. Keep in mind, however, that rewards are only useful if you pay your credit card bill in full each month and never carry a balance.

Reasonable Fees

While credit cards for bad credit are more likely to charge more fees than credit cards geared to people with good or great credit, we still looked for cards that kept fees at a minimum. We also considered the interest rates credit cards charge on balances carried over, keeping in mind that it may not always be possible to pay your balance in full each month.

What You Need to Know About Credit Cards for People With Bad Credit

The selection of top credit cards for bad credit listed above can help you build credit fast when no other options are available. However, that doesn’t mean you should dive in without a plan. The following tips can help you get the most out of bad credit credit cards while you work on building positive money habits that will last a lifetime:

You should avoid carrying a balance.

The average credit card interest rate is currently well over 17%, but credit cards for bad credit often charge higher rates than that. To get the most value from your new credit card, you should try really hard to avoid paying interest on your purchases at all costs. Not only will this help you save money on everything you buy, but keeping your credit utilization — the amount of your credit limit you’re actually using — on the lower end can help you improve your credit score at a faster rate.

You’ll get your security deposit back if you don’t default on your account.

If you do wind up having to get a secured credit card that requires a cash deposit, you don’t need to worry that you’ll never get your money back. You’ll absolutely get your deposit refunded if you don’t default on your account. Once your credit is vastly improved, you can cancel your card or upgrade your card, and your security deposit will be automatically refunded.

Improve your credit now and you can get a better credit card later.

If you’re not overly impressed with the cards on this list, keep in mind that credit cards for bad credit aren’t meant to be forever. The cards on this list serve a very specific purpose. They give you the opportunity to build credit and prove your creditworthiness when other cards will not. Once you use these credit cards to build a history of responsible credit use, you’ll be able to move on to cards with lower fees and better perks, like cash back or travel rewards.

Summary: Best Rewards Credit Cards of 2020

Best Credit Cards for Bad Credit of 2020 Best For
Total Visa® Credit Card Best Unsecured Credit Card for Bad Credit
Discover it® Secured Best Secured Card for Rewards
Capital One® Quicksilver® One Cash Rewards Credit Card Best for Rewards Overall
Capital One Secured Mastercard Best for Those with No Credit
Green Dot Platinum Visa® Credit Card Best Secured Card with a High Limit
Credit One Bank® Unsecured Platinum Visa® Best for Getting Prequalified Online

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