7 Credit Cards You Can Get If You Have Bad Credit With No Money Down
While you're in rebuilding mode, you've likely looked into options like getting a secured credit card. While this is an option for boosting your credit, it can get expensive shelling out hundreds of dollars for other companies to hold your money.
In this post, we'll tell you about seven credit cards for bad credit with no money down and how to get them.
How Bad is Your Credit?
Quite often, people think their credit is the opposite than what it actually is. If you don't know what your credit score is, you need to find out as soon as possible.
You're entitled to a free credit report from one of the nationwide credit reporting agencies. These are Experian, TransUnion, and Equifax. The Federal Trade Commission stipulates that all three must provide you with a free credit report every 12 months if you ask for it.
You should do this every year to stay on top of any changes and make sure there aren't mistakes.
FICO is a standard credit score used by banks and lenders to decide if you qualify for a line of credit. It's used whether you're buying a car or opening a credit card. Other credit reporting agencies may use different methods, but Experian and many lenders use FICO scores.
According to FICO, the following scores determine your creditworthiness:
- Exceptional: 800-850
- Very good: 740-799
- Good: 670-739
- Fair: 580-669
- Very poor: 300-579
In general, if your score is below 650, you'll have a difficult time opening an unsecured credit line.
Secured Vs. Unsecured
Often, the only credit cards people with bad credit can get are secured cards. Your own cash deposit backs a secured card. If you put down $300, your available balance is $300.
Some companies may match it up to 50% or even 100%. For example, if you put down $300, the company extends you $300 in credit so your balance is $600. As you continue to pay on time and build your credit, the lender may raise your balance as high as $2,500 without you needing to put more money down.
In general, an unsecured loan is for people with a higher credit score. With this type of loan or credit card, there is no deposit or collateral needed. The reason why is they base their approval on your credit score, which tells them if you're "risky" or not.
It's very difficult for people who've filed bankruptcy or have credit scores below 650 to get approved for an unsecured card. But, it's not impossible...
7 Credit Cards for Bad Credit with No Money Down
You know about secured cards and loans, but did you know that you can get an unsecured credit card even if your credit is poor?
The seven credit cards for poor credit below may not be the answer you need if an emergency arises. You won't have access to thousands of dollars, but you don't need a deposit and they'll build your credit.
As you'll see, some of these require a fee to open the account or charge an annual fee. Here are the banks that offer the best deals.
1. WebBank / Fingerhut Advantage Credit Account
Fingerhut is an online catalog company that allows you to buy products now and pay later in low monthly payments. There are two ways you can get credit with Fingerhut.
The first is the Fingerhut Advantage Revolving Account. This is the company's credit line that they extend to you for a possible down payment-like fee. It's usually assessed on your first order and is a charge on your account.
The second is the Fingerhut FreshStart Credit Account which gets backed by WebBank. You have to put $30 down on your first order but if you pay your balance on time without having the bank return any payments, you can upgrade to the Revolving Credit Account.
In either situation, you can't take out cash advances and your credit line is only good at Fingerhut. This is a good way for people who have poor or no credit to start building their score.
The downside is that the APR is variable or 29.99%, according to the terms of the credit agreement.
2. Indigo Platinum Mastercard
The Indigo Platinum Mastercard is ideal for people who file for bankruptcy and are trying to recover their credit. If you've filed for bankruptcy, you know it stays on your credit for seven to 10 years, making opening new credit accounts challenging.
The Indigo card is lenient and won't hold a bankruptcy against you. You can also try to prequalify before applying. The annual fee is up to $99 per the credit agreement and the APR is 23.9%.
3. TOTAL Visa Unsecured Credit Card
The TOTAL Visa Unsecured card is a very basic no-frills credit card. It's great for people a little turned off by credit due to their history but still know they need to rebuild their credit.
With this one, all you need is a checking account and $89 to open the account. Your initial credit line gets capped at $300. Your first month's available balance is $225 after the initial annual fee of $75 gets assessed to your account.
After that, the annual fee reduces to $48. The APR is a whopping 29.9% and they have many terms that you should read over carefully before applying for an account.
You will get charged a $38 late fee so make sure you pay your balance on time. You'll also pay a monthly fee after the first year which adds up to $75 for the year.
4. Credit One Bank Unsecured Platinum Visa for Rebuilding Credit
Credit One Bank has specialized in giving people with bad or no credit a chance to have a credit card for years. This is why the company is a common go-to for people trying to build their creditworthiness.
Before we get to the fees and APR we need to go over one of Credit One's biggest downsides. Navigating their website is often an act in futility. They provide vague information that isn't all that helpful.
There are three cards available. When you apply for an account, you don't know which card you're applying for. They go through the application process and decide which card you'll get.
With their Unsecured Platinum Visa for Rebuilding Credit card, there aren't a lot of bells and whistles. But you are able to switch to another Credit One Bank card with a higher limit after you have a good payment history.
Like the TOTAL Visa, you'll get assessed a $38 late fee, so pay on time. The annual fee is up to $99 and the interest rate is 19.74% to 25.74%.
5. Credit One Bank Unsecured Platinum Visa with Cash Back Rewards
This is the big brother to the Rebuilding card. The terms and fees are alike except you get cash back on your purchases with this card. This makes it stand out from the other credit cards for people with bad credit.
The highest balance you'll get approved for is $300 but after making on-time payments for at least six months, your limit can increase. But, you will get charged up to $49 for the increase. The catch is, even if you don't request a higher limit, they can decide to extend it on their end and you'll get charged.
6. First Access Visa Card
The First Access Visa only requires you to have a checking account to open an account. You should think of it as a starter or rebuilder card.
If you're approved, you'll pay an $89 processing fee before you open your account. Your card will then get assessed the $75 annual fee. That does drop to $48 after a year but First Access will start assessing you a $6.25 service charge each month.
The initial credit limit is $300 which gets reduced by the fees but you can get your limit increased after you pay your bill on time for several months. The APR is 29.9% and the charge a $38 late payment fee.
7. Milestone Gold Mastercard
The Milestone Gold Mastercard is another card that's a rebuilding option if you've filed for bankruptcy. The Milestone card is forgiving when it comes to poor credit and you can prequalify in minutes before applying.
This card assesses your annual fee based on your credit score. The first year could cost you $35, $59, or $75. After that, the annual fee jumps to $99.
You won't get charged a fee for cash advances in your first year. You also have the option of paying the balance off every month to avoid the 23.9% rate.
The max credit limit is $300 and the minimum payment amount each month is 7% of the balance or $35, whichever is higher.
Get Back on Track Faster
Having good credit is almost mandatory in today's world. You can get better car insurance rates, get a cell phone without money down, and have an easier time getting approved for an apartment.
Not to mention the obvious benefits of having good credit like buying a house. But if your score is 500 or below, building your credit score takes time.
Use our guide to getting a credit card for bad credit with no money down and you'll improve your credit faster. For more info on how to improve poor credit, visit our blog.