If you have bad credit, no creditors will want to work with you. Well, at least that’s what our experience has taught us. Those of us who have experienced bad credit have also experienced the rejection that comes along with it. We know that it doesn’t matter the circumstances that lead to us developing bad credit. It doesn’t matter if we lost our job, got a divorce, had an unexpected illness, or experienced a death in the family or other traumatic life experience. We know that it also doesn’t matter what we’ve learned through our experience with bad credit, how we’ve grown, or how our circumstances have changed.
Once you have bad credit, no credit card company will touch you. Right?
Well, not necessarily. The problem with the above scenario is that it is so hopeless! In order to be able to improve our credit, we have to establish new positive payment history. But in order to do that, many times we have to have the ability to open new lines of credit to establish this new history with (especially when all of our other lines of credit have been closed or sent to collections). But it isn’t possible for us to open up any new lines of credit because no new creditor is willing to work with someone with bad credit.
This is the experience that anyone with poor credit has had. They want to establish new payment history with new lines of credit. But no new creditor is willing to work with them.
Well, that is no longer true. The new truth is, there are several credit card companies that have created programs especially for people with bad credit. Here are a few of the best ones:
1. Capital One Secured MasterCard
Capital One has a great secured card for people with bad credit. Unlike most secured cards, this card doesn’t restrict your spending limit to the amount that you have deposited. Instead, it does increase your spending limit according to the amount that you have deposited, but it’s a larger amount that you have available to you than what you have deposited.
On top of that, once you establish a good payment history with them, it will be much easier for you to get a normal credit card through them much easier than you would be able to otherwise. Another perk about this card? It’s a MasterCard! Lexington Law, a credit repair law firm, has said that MasterCard is “the second-largest processor of debit and credit card payments in the world.” So, having a card with such a large, reputable company could really prove beneficial.
The fine print: $29 annual fee, 22.9% APR.
Why I like them: Higher limits, easy transition into an unsecured card, and it’s a MasterCard.
2. Orchard Bank Card
Orchard bank has 3 different unsecured cards, and one secured card, that could potentially be available to people with poor credit. One thing that is great about them, is that you only apply to them once, and they will determine which card(s) you are eligible for. Their secured cards are very easy to qualify for. Their secure cards work more like regular secured cards, which work very similar to debit cards. You deposit a certain amount of money, and that is the amount that is now available to you for use. But these types of cards (unlike normal debit cards) help you to establish new positive credit history.
Another great thing about them is that you can go through their prequalification application process for approval first without having to receive a hard inquiry on your credit reports.
The fine print: $39 – $59 annual fee, 14.99% – 24.99% APR (both depending on your credit score).
Why I like them: Easy qualification, soft inquiries (won’t make your credit worse just by applying!).
3. Digital Federal Credit Union Visa Platinum Secured Credit Card
This is another great credit card for those with bad credit. Actually, this is one of the best secured cards that are available (see their fine print below). All you have to do is join one of the companies within their organization (usually making a small donation), and you will be able to get their card. You do have to be a member with them to get their card, but there are over 700 companies and organizations that are part of them. If you become a member, you are eligible for their card. So this is a great card for people with really bad credit.
Another great thing about them is that cardholders earn .05% interest on any deposit they make (which is not very common).
The fine print: $0 annual fee (very hard to find with secured cards), 11.5% APR (pretty low).
Why I like them: Great terms, and automatic approval (for members… but it’s easy to become a member).
Nicole has spent the past several years building her credit score from a poor score to a good one. She understands the struggles of a low score, and she loves sharing the knowledge she’s gained with others.