We have reviewed the top credit card rates for bad credit in November 2019. When you have bad credit, it can feel like the whole world is against you. With a low credit score, financing for anything from a house to a vehicle becomes difficult, if not impossible to obtain. Opening a credit card may seem counter intuitive when you’re in dire financial straits, but it can actually help restore your credit and rebuild your financial reputation.
Bad Credit and Its Causes
A credit score between 300 and 499 is considered “Bad Credit”. A score this low can be caused by a number of factors, including delinquent or abandoned accounts, late payments, foreclosure, and vehicle repossession. Your score is also dependent on the amount of credit you have available, so if you have credit cards, but they are all at their maximum limit, it can negatively affect your score, even if you are making timely payments.
Surprisingly, you can also have a low credit score if you have zero credit history. Many young people fall into this category, as they have never had any sort of credit or financing. Regardless, of your circumstances, financial institutions offer a number of ways to help you improve your score.
How Credit Cards Improve Your Credit
In addition to paying off your debts, it is a good idea to obtain a credit card to begin rebuilding your credit. Use the card for small transactions, and pay it off in full each month to avoid paying interest. When you make regular, on-time payments, your credit score can begin to show improvement in just a few months. Be sure that you do not max out your credit card – available credit will have an effect on your score. Many credit card companies will also offer free credit tracking services and counseling to help you reach your financial goals. Take advantage of these tools to improve your credit faster.
If you are unable to procure a regular credit card, a secured card is another credit building option. Secured credit cards require a deposit; however, unlike a debit card, you do not use that deposit. The total amount you deposit is held by the bank, to be used in the event of a potential default. Should you choose to close your account, the deposit is usually refundable, but some banks will charge a fee. Be sure to check how the annual fee and interest are calculated and charged against your account. Some cards will subtract the full annual fee from your first month’s available balance, while others will divide the fee by the 12 month period and charge the amount against your available credit in monthly installments.
Most importantly, be sure to choose a credit card that will help you get out of debt and not further in. This means checking credit card rates and fees before you commit to a card. Credit card rates for bad credit are often higher, as the banks do not want to risk losing money to default, so it is doubly important that you pay your balance in full each month. Interest only applies to balances that carry over to the next billing cycle, so in addition to improving your credit, you will save money by paying the total.
Latest Credit Card Rates for Bad Credit
To help you find the best credit card to rebuild your financial reputation, we have compiled a list of some of the latest credit card rates for bad credit:
CreditOne Platinum Visa® for Rebuilding Credit
- No Deposit
- 24% – 26.24% Variable Interest Rate (based on creditworthiness)
- $300 Minimum Initial Credit Line
- $0 – $99 Annual Fee (based on creditworthiness)
- 1% Cash Back Rewards Program
CapitalOne® Secured Mastercard®
- $49, $99, or $299 Refundable Deposit
- 99% Variable Interest Rate
- $200 Initial Credit Line
- No Annual Fee
- CreditWise® Credit Tracking System
First Progress Platinum Elite Mastercard® Secured Credit Card
- $200 – $2,000 Initial Deposit
- 74% Variable Interest Rate
- Available Credit Equal to Deposit
- $29 Annual Fee
Green Dot Platinum Secured Visa® Credit Card
- $200 – $5,000 Deposit
- $19.99% Variable Interest Rate
- Available Credit Equal to Deposit
- $39 Annual Fee
- Regular Credit Reporting
How Long Will it Take to Improve My Credit?
Remember that improving your credit will take time, so don’t be discouraged if you don’t see immediate improvement. Depending on your credit history, some things such as foreclosures, judgments, and repossessions can take up to 7 years to fall off your report. Keep building positive credit in spite of this, and the older your bad history gets, the more you will see your score improve. Use the credit tracking tools and credit counseling to keep track of your score and measure your improvement, and use your credit card wisely. You will start to see your score trending upward in no time!