Best Options For Borrowers With Below Average Credit or Bad Credit Approval Cards
Many Americans in recent years have found themselves in the bad credit category. Millions of Americans have had to file for bankruptcy, lost their homes or had to do short sales of real estate all of which can turn ones credit bad. Bad credit is not for life however. If you choose to do nothing about your bad credit, as long as you gain no further bad marks on your credit report you will have clean credit again in 7 to 10 years, but you will still need to rebuild your credit after this time. If you want to raise your credit score, Prepaid credit cards are a great way to jump start your lifeless credit report.
There are only three drawbacks to secured credit cards are that you need a deposit, generally at least $500.00 and the second drawback is that these cards tend to have annual fees and activation fees. The third drawback is higher interest rates. Rebuilding or even establishing your initial credit is not easy and can cost you some, but it is better then having no credit or bad credit. When selecting the right secured credit card for you, beware of so called “fee-harvester cards, these cards have fees for literally everything and deliver very little back to the consumer. You also want to verify that the secured credit card you’ve chosen will report your on-time payments to the three major credit bureaus, Equifax, Experian and TransUnion, otherwise the account is useless. Some secured cards will only report to the credit reporting agencies if you go into collections.
Here is a list of secured credit cards to help you rebuild your credit.
Primor™ Secured Visa Gold Card
This card is my top pick, it features a very low interest rate of 9.99% which is a fixed interest rate, and this card has No processing or application fees. There is no penalty interest rate in the case of missed payments or late payments. Like the other cards in this list they report to all three nationwide credit bureaus. Worried about being denied? Don’t worry with this card you’re guaranteed for approval as long as your monthly income exceeds your monthly expenses by $100 or more! This card does not even check your credit. No rewards program, and card has several fees, but most of these fees can be avoided. This card is my favorite due to the fixed low interest rate.
USAA Secured Platinum Card
real credit card but secured, your deposit is held in a USAA 2 year Certificate of Deposit (CD), which will earn you interest while you build up your credit, so it is not only helping you build your credit rating up, but also acts as a small investment over time. Your credit limit will depend on the amount you choose to deposit, from $250.00 to $5000.00. This card is designed for those with no credit as well as those who have bad credit. The interest rate is 9.90% (Variable) and the card has an annual fee of $35.00. If you are not eligible, USAA credit cards and other products may still be available.
Example Three® Secured MasterCard®
This secured card unlike many does not come with processing or application fees. They faithfully update all 3 major credit bureaus with your credit history on this card. You can deposit up to $3000.00 to get a line of credit up to that amount. You may get a credit increase as you make payments on time and pay the balance off every month. The drawback to this card is unlike many cards they do not return the deposit after a year to 18 months like many other secured cards do if you have maintained your account in good standing, but they will keep increasing your credit line. The card does have an annual fee of $29.00 and the interest rate is 22.9% (V)
First National Bank Secured Visa Card
This card unlike the one above will return your deposit and upgrade your credit card to an unsecured card from First National Bank in as little as 15 months. Your deposit anywhere from $300.00 to $5000.00 will set your credit limit, however they throw in the addendum subject to credit approval. This card will provide you with your FICO® 8 Bankcard Score on request for free, which will help you monitor your credit rating as you work on building up your credit history. If you maintain good standing you could see credit line increases in as little as 6 months with this card. The interest rate is 20.99% (Variable).
LANPASS Visa® Secured Card
So far all of the cards on this list have featured no rewards. Just because you need to go with a secured card does not mean you cannot get rewards. The LANPASS Visa Secured Card Reward include 1 LANPASS Mile for every $1 you spend, 5000 bonus miles as a sign up bonus when you pay your annual fee or use your card for purchases. This card has an annual fee but it is waived for the first year. The Secured card requires a minimum deposit of $300 and this will be held in a security deposit account. The deposit earns interest, and if and when your card gets upgraded to an unsecured card this will be returned to you. In as little as 12 months you could see your secured card upgraded to a unsecured credit card product.
US Bank LifeMiles Visa Secured
The second secured card on our list with rewards, the US Bank LifeMiles Visa Secured earns you 1 mile per $1 spent on purchases. There is a sign up bonus of $100.00 and your rewards from spending on this card should average around $400.00 making the rewards for this card on your first year about $500.00 . Like the other cards on this list, you will qualify with limited or bad credit. The card does have an annual fee, but the fee is low at $25.00, and you can easily make this back via rewards. The only draw back to this card is the high APR, which is 22.99%, and for cash advances the APR is high at 24.24% (Variable). The card does have some perks, such as travel & emergency assistance, auto rental collision damage waiver and travel accident insurance.