August 11, 2022

9 Best Credit Cards for Bad Credit in 2022 (Rewards Included)

Quick Look: Best Credit Cards for Bad Credit Bad credit can happen for a variety…

9 Best Credit Cards for Bad Credit in 2022 (Rewards Included)

Quick Look: Best Credit Cards for Bad Credit

Bad credit can happen for a variety of reasons and might seem difficult to overcome. However, bad credit is more common than people think and can occur at any point in life regardless of income level or education. Bad credit is considered a credit score below 550. Low credit scores can hinder your ability to receive a loan or flexible financial options. Rebuilding and improving credit scores can take time and consistency. Benzinga researched and reviewed the best credit cards for bad credit so that you can start rebuilding your credit score today. A secured or unsecured card may help. Before signing up, consult a financial professional to see which cards and terms would work best for you.

Best Overall: Capital One Platinum Secured

Specs:

  • Minimum Deposit: Yes; minimum refundable deposit
  • One-Time Fee: No one-time fee
  • Intro APR: No stated intro APR
  • Regular APR: Variable rate of 27.24%
  • Annual Fee: No annual fee
  • Rewards: No stated rewards

Pros 

  • No annual fee
  • Can earn back the deposit and switch to an unsecured card
  • No foreign transaction fees
  • Credit line can increase
  • Credit lines can begin at around $200 and extend up to $1,000

Cons 

  • Minimum security deposit fees can range up to about $200
  • Late penalty fee can extend up to $40
  • No rewards

Card Description 

Capital One, located in Virginia, is one of the top 10 largest banks that’s focused on blending technology into banking. Since 2012, the company has worked to use the cloud as well as banking tools to remain competitive in the financial industry.

What makes Capital One Platinum so unique is its higher rate of acceptance for low credit scores because it’s specifically designed for rebuilding and fair credit scores. The card is ideal for building credit with a small credit line such as $200 that can be extended over time with automatic credit line reviews. The company charges maximum late penalty fees up to $40 but no additional penalties. You can closely monitor your account with an accessible smartphone application and Capital One’s digital assistant, Eno. Helpful tools such as CreditWise can allow you to better understand your credit. The card offers fraud liability protection and the ability to lock your card from the smartphone application. The card also allows for autopay to help build your credit score and guard against late fees. The card can change from a secured to an unsecured card with positive financial habits. 

A security deposit is required, and the account has a higher-than-usual APR rate. 

Best Secured: U.S. Bank Cash+ Secured Visa Card

Specs:

  • Minimum Deposit: $300
  • One-Time Fee: No one-time fee
  • Intro APR: Yes; 0% for the first 15 months
  • Regular APR: Variable APR around 26.24%
  • Annual Fee: No annual fee
  • Rewards Card: Offers cash-back rewards

Pros 

  • Allows more flexible payment due dates
  • Offers autopay and works with a digital wallet
  • Can work well for people with no previous credit history
  • Free access to your credit score 

Cons 

  • Foreign transaction fees are around 2%
  • Higher security deposits up to $5,000
  • Varied cash advance fees

Card Description 

U.S. Bank has a history that stretches back to the early 1860s. It offers a tool called the U.S. Bank Smart Assistant that is designed to help manage accounts. The tool is interactive and can work as a voice-activated assistant. 

What makes the U.S. Bank Cash+ Secured Visa card unique is that it offers cash back. In addition, there are no annual fees, and it can appeal to potential lenders with no credit history. The credit card can help boost credit scores and guard against missed payments. For example, the card offers autopay options to help ensure that payments are made promptly. In addition, the account offers fraud liability protection and 24/7 account access. Credit limits are based on your deposit. A security deposit of $5,000 translates to a credit limit of $5,000. 

However, the APR rate is relatively high and can hit 26.24%. The security deposits range in price but are refundable deposits. In addition, the card has late fees and foreign transaction fees, which might not be ideal when traveling abroad. The security deposit remains untouched as long as the account is in good standing.

Best Unsecured: Capital One QuicksilverOne Cash Rewards

Specs:

  • Minimum Deposit: Yes; $200 refundable deposit
  • One-Time Fee: No member fee
  • Intro APR: Not stated
  • Regular APR: Variable APR about 27.24%
  • Annual Fee: Yes of about $39
  • Rewards: Yes; cash back

Pros 

  • Offers 1.5% cash back
  • No security deposit
  • Provides automatic credit line reviews
  • No foreign transaction fees
  • Fraud coverage

Cons 

  • A $39 annual fee
  • Includes higher APRs
  • Penalty late fee of up to $40

Card Description 

Capital One offers a wide range of services, including credit cards, checking accounts and saving accounts. The website offers a section that provides educational tools.

What makes the Capital One QuicksilverOne Cash Rewards so unique is that it offers 1.5% cash back on purchases and higher-quality services while remaining relatively attainable for lower credit scores. The card works with fair or limited credit. For example, the credit card offers beneficial tools such as CreditWise, which allows you to keep track of your credit score for free. The credit card provides fraud coverage and automatic credit line reviews to more quickly increase credit lines and allow for larger purchases. 

Larger credit lines have the potential for trouble because bigger balances can be more difficult to repay when fully used. Try to stay within your financial means even if your credit line increases to prevent missing payments or incurring large amounts of debt. 

The credit card includes annual fees and a higher-than-usual APR at around 27.24%. The credit card also charges annual fees.

Best Store: Fingerhut Credit Account

Specs:

  • Minimum Deposit: Can vary depending on your situation
  • One-Time Fee: No application fees
  • Intro APR: No stated intro APR
  • Regular APR: Generally around 29.99%
  • Annual Fee: No annual fees
  • Rewards: Unclear rewards

Pros 

  • Higher acceptance rate for bad credit scores
  • Automatically authorized for a Fingerhut FreshStart Loan if not accepted for credit card
  • Offers 20-day grace period
  • Provides monthly updates about your FICO score without hurting your score
  • Accounts systematically reviewed with the possibility of increasing credit lines

Cons 

  • No introductory APR rate
  • Higher APR rates
  • Credit card can only be used within Fingerhut network 

Card Description 

The company first began in the late 1940s and now offers products online. Fingerhut offers two types of accounts: Fingerhut Fetti Revolving Credit Account as well as a Fingerhut Freshstart Credit Account. The Fingerhut Revolving account can potentially require a downpayment that can then be applied to your first order. The credit card has a limited reach but can help you slowly rebuild your credit score. Positive spending habits can allow you to potentially increase your line of credit. 

Fingerhut is an excellent option to rebuild credit because it’s more accepting of bad and low credit scores. What makes the company unique is that the credit card can only be used with Fingerhut and the other approved partner companies. The credit card accepts interested borrowers with limited credit history without a security deposit. No clearly stated rewards are attached to the account. There are potential late fees if you fail to pay. Luckily, there are no interest rates if you pay off each monthly balance in full. Fingerhut charges APR rates as high as 29.99%. There are no strict minimum credit scores, so it’s an excellent idea for low and poor credit. 

Best for Small Business: Wells Fargo Business Secured Credit Card

Specs:

  • Minimum Deposit: About $500 deposit
  • One-Time Fee: Security deposit depends on the amount of the credit line
  • Intro APR: Not stated
  • Regular APR: Variable based on the prime rate
  • Annual Fee: No annual fee
  • Rewards: Yes, with points

Pros 

  • Ideal business with a maximum of 10 employees
  • Offer credit line up to $25,000
  • Provide 1.5% cash-back for certain purchases
  • Rewards point option
  • Liability protection

Cons 

  • Wells Fargo Business card applications not accepted in Wells Fargo Branches
  • Must already have a Wells Fargo business checking or savings account 

Card Description 

Wells Fargo first began in the early 1850s to help businesses manage money. Today, the company offers a wide range of financial services and banking. 

What makes the Wells Fargo Secured Business Card so unique is that it’s a viable option for bad credit that can offer a credit line up to $25,000 while providing rewards and cash-back options. The card allows for automated payments to help avoid penalties and late fees. It charges no foreign transaction fees, and the card can be used for up to 10 employees, which might prove helpful when working abroad. The card helps protect against fraud. 

However, the secured credit option requires a security downpayment that increases with the requested credit line. For example, a maximum credit line of $25,000 would require a $25,000 deposit. Currently, the card offers a prime rate on cash advances near 20.74%, but that prime rate changes to around 11.90% on purchases. 

Best No Deposit: Milestone Mastercard 

Specs:

  • Minimum Deposit: No security deposit
  • One-Time Fee: None stated
  • Intro APR: None stated
  • Regular APR: Around 24.9%
  • Annual Fee: Up to around $99
  • Rewards: None stated

Pros 

  • Option for low credit and rebuilding credit
  • Reports monthly statements to three different credit bureaus 
  • Offers 24/7 account access
  • No minimum security deposit
  • Allows people to be pre-qualified

Cons 

  • Annual fees
  • No rewards or bonuses

Card Description

The Milestone Mastercard comes from Mastercard. Mastercard, located in New York, works to integrate new technology with banking.

What makes the Milestone Mastercard so unique is that it complements low credit scores by acknowledging the need to build or rebuild credit. The monthly payments are shared with credit bureaus, and prequalification for the card will not impact your score. The card offers online account access. The card is ideal for people in need of rebuilding credit and allows accepted users to access the account online. The APR rates are around 24.9% for credit lines of $300.

However, the card has no stated rewards or bonuses and charges higher APR fees with limited benefits. 

Best No Annual Fee: Petal 1

Specs:

  • Minimum Deposit: No
  • One-Time Fee: No
  • Intro APR: Not stated
  • Regular APR: Variable between 20.24% and 29.74%
  • Annual Fee: No
  • Rewards: Cash back about 1%

Pros 

  • No annual or deposit fees
  • Designed to build credit
  • Offers cash back
  • Credit limits can be increased

Cons 

  • APRs can up to around 29.74%
  • Not able to transfer balance

Card Description 

The credit card named Petal is offered by WebBank. The company offers two different cards called Petal 1 and Petal 2. 

Petal is unique because it’s designed to help build credit. It’s ideal for lower credit because the card takes into account more information than just credit scores. The company specifies credit limits between $300 and $5,000 with the potential of increasing about twice a year. The card offers cash-back deals between 1% and 10%. Your activity is reported to three different credit bureaus to better improve your credit score. The card offers autopay to help you avoid late payments. It charges no foreign transaction fees, which can be ideal for travel.

However, the APRs tend to be high with limited rewards. 

Best for Gas: Shell Fuel Reward Card

Specs:

  • Minimum Deposit: No
  • One-Time Fee: No
  • Intro APR: Not stated
  • Regular APR: Variable APR up to 29.99%
  • Annual Fee: No annual fees
  • Rewards: Yes

Pros 

  • Excellent gas rewards
  • Rewards on groceries and dining
  • Offers cents-per-gallon savings
  • Grace period of around 25 days on purchases without interest

Cons

  • Many Shell rewards are not directly tied to credit card
  • Foreign transaction fees and cash advance fees
  • Late fees up to about $40

Card Description 

Shell first began in the early 1830s as a seashell-selling operation. However, the company shifted into oil with its second generation of owners. Currently, the company is expanding its exploration of cleaner energy while remaining firmly rooted as a leader in the oil industry.

What makes the Shell Fuel Reward card so unique is its strong rewards program that allows you to earn while spending on dining and online shopping. Once you reach a certain status, the rewards accumulated from spending activities such as dining and online shopping can be combined. Rewards give you the opportunity to save up to $0.30 per gallon of gas. The credit card can only be spent with approved merchants. New credit card members get gold status for the first 6 months but then can potentially be lowered to silver if the stated minimum purchases are not met in the designated timespan. The credit limit depends on factors such as your annual income and debt.

The variable APR has the potential to be much higher than usual, around a maximum of 29.99%. 

Extra

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Best For

No Credit History

1 Minute Review

If you want a credit card but can’t get one, you are part of a group of over 100 million other Americans. Perhaps you’d given up on getting the credit you need, but thanks to Extra, things have changed. Extra aims to make credit building safer, smarter and more accessible for everyone. It’s the first debit card that builds your credit history and earns rewards points just like a credit card. Read on to learn how to increase credit score and earn points everywhere while keeping your same bank.

Best For

  • Consumers with no or poor credit history
  • Young people newly navigating financial independence
  • Anyone who wants to build credit and earn reward points
Pros

  • No credit check
  • Easy to sign up
  • Build credit history safely
  • Earn rewards
Cons

  • Requires a bank account
  • Subscription fee

When you have bad credit, you are likely searching for any financial instrument that will help you improve your financial situation. The Extra Card is a debit card designed to help a range of consumers, including:

  • Anyone looking to build up their credit again
  • Young people who wish to build their credit
  • Consumers who wish to maintain a high credit score

The Extra Card makes it possible for you to rebuild your credit, and it also offers a rewards program. You can connect to your bank to pay for each transaction, use the Extra debit card and let it report to the credit bureau at the end of each month.

Extra doesn’t run a credit check, and you don’t deposit money to open the account. For just $8 per month, you can rebuild your credit (without the high interest rates charged by credit cards,) enjoy the rewards program and make use of a debit card that rises above the standard secured credit card.

Features to Look for in a Credit Card for Bad Credit 

Before selecting a card, research available options and compare them to your financial situation. If possible, consult a financial professional to gain a better sense of the necessary steps. 

APR Rates

When examining different credit cards for bad credit, research APR rates. The rates will be higher for bad credit scores, but try to find the lowest rates in that specific bracket. For example, APRs that are higher can be more difficult to repay and might make rebuilding credit more tedious. APRs for bad credit are between 18% to 29%. 

Interest Rates

Interest rates are similar to APR rates, but they do not include everything that is examined within an APR. For example, an APR rate tends to be higher because it reflects a combination of data points. 

Interest rates for bad credit tend to range around 18% but can be higher depending on if the intended credit card is unsecured. Factor in interest rates because they indicate the amount of annual interest you will likely need to pay on a card.

Credit Boosting Tools

Paying off cards monthly is a great way to help boost a credit score. Setting up monthly automatic payments helps avoid paying late. However, automatic payments might not be an excellent option if your finances are tight or unpredictable.

Consider getting a credit card such as a secured card that allows you to check your scores and reports. However, certain credit score checking options can lower your score so research the different options before deciding which one you should use. 

Annual Fees

Annual fees associated with a particular credit card will affect whether you choose it. Annual fees help lenders offset the offered benefits and perks. However, benefits such as rewards tend to be minimal for low credit scores. 

How To Get Approved For a Credit Card if You Have Bad Credit 

Know Your Credit Score 

One step to getting a credit card with bad credit is understanding your credit score. Certain scores that are considered bad, low and fair can vary depending on the potential borrower. Research credit card options and know your credit score to see if your score can potentially qualify you as fair credit. For example, credit scores around 580 can potentially be marked as fair instead of low depending on the borrower. This change in score classification could potentially offer you better rates.

Create Positive Spending Habits 

When aiming to obtain a credit card, try to create positive spending habits. A credit card can be a useful tool, but it can also become a hindrance when improperly used. For example, failing to promptly pay off a credit card during each billing cycle can negatively impact your score. 

Build Credit

Building credit before entering into a credit card agreement, see if you can find better options. The best way to build credit and positive spending habits before obtaining a credit card is to promptly pay bills. Payment behavior can help improve your available credit card options or hinder them if you have a history of late payments.

Consider a Retail or Secured Card

Reviewing credit card options will help you better understand the likelihood that you will be able to receive specific cards. Credit cards that are secured are a good option for lower credit scores. However, secured credit cards often require a cash deposit. 

How You Can Improve Your Credit Score

Know Your Score

If possible check your score to track your progress. Some services charge or negatively impact your score each time that you look. Since these fees and credit dings can be counterproductive, find a program that allows penalty-free checks. 

Understand Your Debt

Knowing and understanding the full extent of your debt can rightfully feel overwhelming. Unfortunately, the concept of out-of-sight/out-of-mind does not apply to debt or debt payments because they do not go away when ignored. Instead, it is best to look debt directly in the eye to get an entire understanding of the beast. It’s nearly impossible to fix the problem if you have no real understanding of where to start. Sometimes what you think is the main cause of your debt and increasing bills is something you didn’t realize. If possible, consult with a financial professional to understand your debt and to feel more empowered about your situation. 

Consistently Pay Off Bills

Consistently paying off your bills can help build your credit. Building your credit can take time, so try to remain up to date with bill payments to avoid late fees and penalties that can potentially further lower your credit score.

Focus on Paying Ongoing Bills Such as Rent on Time

If possible, fully pay rent when due to help build and improve your credit score. When building your credit score, rent payment history can negatively influence your score if you fail to pay or pay late. 

Frequently Asked Questions

What is a bad credit score?

1

What is a bad credit score?

asked

Camille Cabrera

1

Credit scores are considered bad if they are found to be too low. Specifically, scores between 300 and 550 are typically considered bad credit scores. 

Answer Link

answered

Benzinga

1

What causes bad credit?

asked

Camille Cabrera

1

Multiple reasons such as late payment, high debt ratios and identity theft can cause bad credit. It’s possible not to pay the expected minimum amount on your card balances or to pay late and decrease your score. Only making minimum payments on credit card bills can negatively impact your credit score. Your payment history heavily impacts your credit score, so try and remain consistent with payments. 

Answer Link

answered

Benzinga

What are the easiest cards to get if you have bad credit?

1

What are the easiest cards to get if you have bad credit?

asked

Camille Cabrera

1

Cards with lower lines of credit are typically easier to get because of the lower amount at risk for a lender if you are unable to pay. Specific types of credit cards such as credit-building cards and secured cards can be easier to obtain for people with low credit that are looking to rebuild. Secured cards also offer an increased level of risk for a borrower. For example, secured credit cards often require a cash deposit to help offset the risk and that deposit can be lost if a borrower fails to make timely payments. 

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Benzinga

What is a good APR for bad credit?

1

What is a good APR for bad credit?

asked

Camille Cabrera

1

APR rates for bad credit are often much higher than average rates. A good APR rate for bad credit can be below 20%, which is still higher than the typical average. However, some credit cards have rates as high as 25% APR. 

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Benzinga

Can you do a balance transfer with bad credit?

1

Can you do a balance transfer with bad credit?

asked

Camille Cabrera

1

It’s possible to do a balance transfer with bad credit; research available options to see if it’s right for you. A balance transfer can potentially help you save money by more effectively consolidating debt.

Answer Link

answered

Benzinga