When you’re trying to recover from a less-than-perfect credit history — or build your credit history from the ground up — it can be tough to find real credit card offers.
Some cards designed for consumers with fair, bad credit or no credit are so full of program fees that they risk making your debt problems even worse. Others charge excessive interest rates, big late fees or offer barely any benefits to cardholders.
Don’t give up. There are still good credit cards out there – including those for people with low or mediocre credit scores. Some cards for consumers with less-than-perfect credit even offer modest rewards or other important benefits, such as an automatic credit limit increase after you prove that handle the card responsibly i.e. on-time monthly payments.
If you’ve got a credit type classified as poor or bad – meaning a credit score below 580 – you might find that a secured card is your best option. In exchange for securing your card with a refundable deposit, you could get a relatively affordable card with a modest credit line.
If you have better credit or fair credit – meaning your credit score hovers around 580 to 669 – you have even more options for a new credit card from credit card issuers. You might even be able to get an unsecured card with perks that are nearly as good as those offered by cards for people with good or excellent credit.
Here are four of the best credit card options for consumers with fair or poor credit.
Discover it® Secured card
Best for: Those who want to earn some rewards while building or rebuilding their credit.
Significant rewards: You might not associate rewards with a card that’s aimed at consumers who are building or rebuilding credit. But Discover has broken the mold and created a secured card with a surprisingly decent cash back rewards program. You could get 2% cash back on every $1 you spend on gas and restaurant purchases (up to $1,000 in spending per quarter) and 1% cash back on all other spending.
Help to stay on top of your credit: Discover provides a number of consumer-friendly benefits that can help you keep tabs on your credit and protect you from identity theft. For example, you’ll get free access to your FICO credit score (the most common credit-scoring model), free monitoring of your Experian credit report (one of the major credit bureaus in addition to Transunion and Equifax) and free alerts any time Discover notices your Social Security number is being sold on the web.
Flexible credit limit: You might be able to score a higher credit limit (up to $2,500) if you deposit more than the required amount to “secure” the card. The minimum deposit is fairly high on this card, though, so you might need to look elsewhere if you’re short on cash. You’ll need to deposit at least $200 to secure the card.
No annual fee: Unlike many secured cards, the Discover it Secured card doesn’t charge an annual fee.
Annual fee: None
Bonus: Discover matches all of the cash back you’ve earned in your first year. For example, if you earn $100 in cash back in the first year, Discover will give you another $100.
Capital One Platinum credit card
Best for: Borrowers who are seeking an unsecured credit card with no annual fee.
No annual fee: The Capital One Platinum card is a no-frills card for those who just want to focus on building or rebuilding their credit – without being tempted by rewards. But unlike many unsecured cards that are designed for consumers with fair or poor credit, its terms are fairly reasonable. For example, unlike some competitors, it doesn’t charge an annual fee.
No penalty rate: If you start to fall behind on payments, you don’t have to worry about being penalized with a higher interest rate.
No foreign transaction fee: When you’re outside your home country, you won’t be charged a foreign transaction fee for purchases or ATM withdrawals.
Access to more credit (if you can show responsible use through on time payments). One of the card’s best perks is its available credit policy. If you successfully pay your first five bills on time, you’ll gain access to a higher credit limit. That, in turn, could help boost your credit score – especially if you keep your balance relatively low from month to month.
Free credit score: Capital One offers free access to CreditWise, which lets you track your credit and regularly monitor your credit score (provided by VantageScore, a competitor of FICO).
Decent benefits: The Capital One Platinum card offers a small number of travel and purchase benefits using the card, including car rental insurance, travel accident insurance and extended warranties on qualifying purchases.
Annual fee: None
Deserve Classic credit card
Best for: Borrowers who are building their credit from scratch.
More accessible than most: Unlike many unsecured credit cards that require at least some experience with credit, the Deserve Classic card doesn’t require a credit history to qualify.
Significant credit limit: This card offers the ability for credit line increase opportunities where you might be able to get approved for an unsecured line of credit as high as $1,500, which is relatively high for a card that’s targeted at consumers who are building or rebuilding their credit.
No foreign transaction fee: You can use this card abroad without paying extra for purchases or ATM withdrawals.
Strong insurance benefits: The Deserve Classic card offers significantly more insurance benefits than the average card for people with fair or poor credit when using the card, including up to $600 worth of cellphone insurance, car rental insurance, extended warranties, price protection and travel assistance.
No penalty rate: You don’t have to worry about your APR spiking if you fall behind on payments.
Annual fee: $0
Other fees: Up to $25 late payment fee; up to $37 returned payment fee; no penalty APR; no foreign transaction fee. Balance transfers and cash advances are not allowed on this card.
Capital One QuicksilverOne credit card
Best for: Cardholders with not-so-great credit who want to earn a significant amount of cash back.
Substantial bonus on every purchase: If you have a strong enough credit score to qualify, the QuicksilverOne card offers one of the most generous rewards programs you can get on a card for consumers with less-than-perfect credit. You could get 1.5% cash back on every dollar you spend. Depending on your credit limit and how much you can afford to charge, you could earn a significant amount – especially since there are no caps on how much you could earn. For example, if you use your card like a debit card and charge $600 a month, you could collect more than $100 in cash back by the end of the year.
No foreign transaction fee: You can take this card with you when you travel.
No penalty rate: If you fall behind on payments, Capital One won’t hike your APR.
Ability to earn a higher credit line: If you pay your first five bills on time, you’ll automatically be considered for a higher credit limit.
Free credit score: Capital One offers a free credit score service called CreditWise (which is open to anyone, not just Capital One customers) that lets you regularly view your VantageScore credit score and monitor your credit-rebuilding progress.
Decent benefits: Like the Platinum card, the QuicksilverOne card offers a number of travel and insurance benefits if purchased using the card, including car rental insurance, travel accident insurance and extended warranties.
Annual fee: $39
If you have the discipline to pay off your purchases in full, the Discover it Secured card and the QuicksilverOne card might be the best bet for you. With their easy application process, you simply need to use the card for everyday purchases and pay your bills on time in order to build or rebuild your credit. In exchange, you might earn enough cash back to treat yourself to a nice dinner.
The APRs on all of these cards are high, though, so you’ll want to avoid carrying a balance from month to moth. The best way to rebuild your credit with a card like these is to use it like a debit card and charge only those purchases that you can pay off quickly.