- Consider a secured card to build good credit habits and improve your credit.
- A high APR and fees may be the price to pay to re-establish your credit.
- Even those with bad credit can potentially get a credit card with rewards.
If your credit score is low, you know it can be harder to reach your goals when you can’t get a loan or credit card with good terms. The good news is that a poor credit score can be improved. Along with long-term strategies like constructing a budget to pay down any outstanding debt, you might consider rebuilding your credit history with a new credit card.
We found four credit cards designed for consumers with low credit scores. While you won’t get all the perks or low rates that people with higher credit scores can (until you’re one of those higher-score folks, of course), you can use these cards as way to help build your credit score.
What is a secured credit card? A secured card requires a cash deposit, and the amount typically serves as your credit limit. You may be able to deposit more to extend your credit, or the bank may reward you for good payment by adding to your credit line without additional deposits.
4 cards to help build your credit
Capital One Secured MasterCard
The Capital One Secured MasterCard requires a refundable cash deposit from $49 to $99 to $200 – based on your credit score. The upside is that your deposit doesn’t necessarily become your credit limit, and the card may offer you a higher credit line after you make your first five monthly payments on time with no additional deposit needed.
The interest rate (APR) is high at 24.99 percent, but there is no annual fee, and you can pay your initial deposit over an 80-day period. And, because the issuer is a major bank, you might eventually get a Capital One unsecured card once your credit history improves. The bank also reports your payments to the three major credit bureaus to help build your score.
For more information on the Capital One Secured MasterCard and how to apply, go here.
USAA Secured Cards® American Express® Card
This secured credit card is designed to benefit those who have served in the military and their families. It requires a minimum security deposit of $250 and gives you the option to raise your credit limit to $5,000 with an additional deposit. A unique benefit of the USAA card is that your deposit is placed into a two-year certificate of deposit (CD), which earns interest.
There’s an annual fee of $35, but the card offers rates as low as 10.40 percent and has no foreign transaction fees if you use your card in another country. Current military personnel can get 4 percent APR for up to 12 months during a deployment or active relocation.
For more information on the USAA Secured Cards American Express Card and how to apply, go here.
Discover It® Secured Card
This secured card lets you choose your refundable security deposit (minimum $200) when you apply, which will dictate your credit line. You’ll earn 2% cashback at restaurants and gas stations on up to $1,000 in combined purchases every quarter, and 1% cashback on all other credit card purchases. Bonus: The card matches all the cashback you've earned at the end of your first year! There’s no annual fee, but the APR is fairly high at 24.24%. You may qualify for 10.99% APR for your first six months.
The card also offers email fraud alerts, text reminders, and 24x7 customer service and reports payments to all three major credit bureaus. Plus you can get your FICO® Credit Score for free on monthly statements and online. Using credit responsibly across all of your credit cards and loans may qualify you to get your security deposit back.
For more information on the Discover it Secured Card and how to apply go here.
First Progress Platinum Select MasterCard® Secured Credit Card
With this secure card, you can choose your refundable security deposit ($200 minimum), which then serves as your credit limit. The card has a relatively low APR of 13.99% and an annual fee of $39. No credit history or minimum card score is required for approval, and you can receive your card more quickly with an expedited processing option. You can choose to pay off your balance and get your security deposit back at any time. This card reports your payments to all three major credit bureaus to help establish your credit history.
For more information on the First Progress Platinum Select MasterCard Secured Credit Card and how to apply go here.
Choosing the right card for you
Not all of these cards may be perfect for you, but they can offer you a chance to start building your credit score back up again. In many cases, limited credit is better than having none at all.
If you’re struggling with high-interest credit card debt and also looking to save for the future, checking out MoneyLion Plus. With a MoneyLion Plus membership, you get monthly savings into a guided investment account and access to $500 5.99% APR loans, with no need to reapply. Good credit is not required, and you’ll get a $10 bonus when you join. Find out more here.
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