Best Credit Card Options for Individuals with Bad Credit History in the United States
Having a negative credit history can pose challenges in obtaining favorable loan terms and credit card offers. A bad credit score, typically below 580 on the FICO scale, reflects a history of missed payments or excessive debt, making it difficult to access loans at competitive interest rates. However, if you find yourself in this situation, there are credit card options tailored for individuals with poor credit. In this article, we will explore some of the best credit cards available in the United States for those looking to build or rebuild their credit.
- Discover it® Secured Credit Card:
The Discover it® Secured Credit Card is an excellent choice for individuals seeking to improve their credit history. Unlike prepaid and debit cards, this card allows you to build or rebuild your credit by reporting your payment activity to the major credit bureaus. It comes with no annual fees and provides the opportunity to earn 1% unlimited cash back on every purchase, with extra rewards at gas stations and restaurants.
Moreover, the cardholder can easily view their FICO® Credit Score on monthly statements, online, and through the mobile app, all for free. By using this secured credit card responsibly, you can take significant strides in enhancing your creditworthiness.
- Secured Mastercard® from Capital One:
The Secured Mastercard® from Capital One is a powerful tool to help individuals build good credit. It does not charge any annual fees and does not offer cash back, miles, or points. However, it provides a pathway to a higher credit line in as little as six months by using a refundable minimum security deposit of $49, $99, or $200.
Capital One offers two methods for refunding the security deposit: it can be returned as a statement credit when the card is used responsibly, or it will be refunded upon closing the account and paying the balance in full. This card can be a valuable stepping stone towards achieving a healthier credit history.
- Total Visa® Unsecured Credit Card:
For those with extremely poor credit scores who are hesitant to opt for a secured card, the Total Visa® Unsecured Credit Card could be an option. Unlike secured cards, it does not require a security deposit. However, it is essential to be aware that this card comes with high fees and interest rates.
Nonetheless, for individuals seeking to overcome their bad credit, this card offers manageable monthly payments that, if made responsibly, can gradually improve credit scores.
- Citi® Secured Mastercard®:
The Citi® Secured Mastercard® is an excellent choice for customers with little or no credit history. By responsibly managing this card, you can build credit, as it reports monthly to all three major credit bureaus.
The card requires a minimum security deposit of $200 and has a variable Purchase APR of 22.49%. Once the cardholder becomes eligible, they also gain access to their FICO® Score online, allowing them to keep track of their credit progress.
- Credit Builder Secured Visa® Credit Card:
The Credit Builder Secured Visa® Credit Card, offered by Armed Forces Bank, is designed for individuals looking to rebuild their credit. While it does not offer cash back, miles, or points, it provides an adjustable credit limit. The cardholder can increase their credit limit by adding funds to the savings account linked to the card, up to $3,000.
Having bad credit history can be challenging, but there are credit card options specifically tailored to help individuals rebuild their credit. By responsibly managing these cards and making timely payments, individuals can gradually improve their credit scores and regain financial stability. Remember, each card may have different terms and conditions, so it’s essential to review the details and choose the one that best suits your financial needs and goals.