bad Credit

Best Unsecured Credit Cards For Bad Credit In 2022

Best Unsecured Credit Cards For Bad Credit In 2022
Written by Publishing Team

A low credit score, or any score below 579, can wrinkle almost any financial plan, including if you want to get a credit card. Like it or not, most credit card issuers require good or excellent credit to qualify for their best offer.

There are fair credit credit cards, or FICO scores from 580 to 669, but these offerings are few and far between. Secured credit cards are a popular option for people with bad credit, but these cards require a security deposit up front.

If that isn’t attractive, there are some unsecured credit cards to consider for bad credit, all of which allow you to borrow money without a security deposit.

Best Unsecured Credit Cards for Bad Credit in 2022

If you’re hoping for an unsecured credit card, but have a bad credit score, read on to find out which cards we recommend.

Petal® 1 “No Annual Fee” Visa® Credit Card: The Best with No Annual Fee

The Petal 1 “No Annual Fee” Visa credit card allows you to create credit with no security deposit and no required annual fee. Your credit limit can range from $300 to $5,000, and you can qualify for a credit limit increase when you make on-time payments for at least six months. Best of all, the Visa Petal 1 “No Annual Fee” credit card takes into account alternative data such as bank history of approvals, so credit mistakes from the past aren’t as important.

Positives:

  • No annual fees and no foreign transaction fees
  • Helps build credit by submitting reports to the three credit bureaus
  • Get pre-qualified without the difficult question of your credit report

Negatives:

  • Interest rate hike potential (variable APR ranges from 19.99% to 29.49%)
  • Credit limit can be up to $300
  • Rewards are limited to special offers with select retailers

Read our “No Annual Fee” Visa Petal 1 credit card review for more details.

Credit One Bank® Platinum Visa® Credit Rebuilding: Best for Earning Cash

The Credit One Bank Credit Reconstruction Platinum Credit Card is another popular unsecured credit card available to customers who are short of credit. This card allows you to earn 1 percent cash back rewards on gas, groceries, your mobile phone bill, internet, and cable and satellite TV services. You also get access to a free credit score, which can help you track your progress to better credit.

However, don’t let cashback distract you from one major downside. The card comes with an annual fee of $99 ($75 for the first year). You’d have to spend $9,900 in 1 percent cashback denominations to make that amount to $99, so it probably doesn’t make sense to choose this card for cashback over a card without an annual fee.

Positives:

  • 1% cashback on popular spend categories
  • Free credit score
  • Get pre-qualified without the difficult question of your credit report

Negatives:

  • High variable annual percentage rate of 23.99 percent
  • Credit limit can be up to $300
  • Charges $75 annual fee the first year, then $99 annually

Read our Credit One Platinum Visa Card to rebuild credit review for more details.

Capital One Platinum Credit Card: Best for getting fair credit

You may put yourself in the “bad credit” bucket because you know your score isn’t perfect, but there is a big difference between bad credit and fair credit in terms of which cards you qualify for. The Capital One Platinum credit card is available to customers with fair credit, which includes FICO scores from 580 to 669.

Although this card does not offer any rewards, you can get pre-qualification without careful inquiry about your credit report, and you can qualify for a higher credit limit in as little as six months. Best of all, there is no annual fee.

Positives:

  • Get pre-qualification online without difficult inquiry about your credit report
  • Possibility to obtain a higher credit limit in less than six months
  • No annual fees and no foreign transaction fees

Negatives:

  • High variable annual percentage rate of 26.99 percent
  • No rewards for spending

Read our Capital One Platinum review for more details.

Discover it ® Student Cash Back: The best with no credit history

If you are a student with no credit history, the Discover it Student Cash Back Program can help you build credit. This card offers 5 percent rewards back on up to $1,500 spent in quarterly reward categories (then 1 percent back) plus 1 percent back on everything else you purchase. Discover will double all your rewards after the first year, and there is no annual fee.

Positives:

  • No credit score required to apply
  • Generous bonuses on spending
  • No annual fees and no foreign transaction fees
  • 1st year cashback match

Negatives:

  • Possibility of a rate hike after the introductory offer ends (Variable APR ranges from 12.99 percent to 21.99 percent)
  • Created specifically for students

Read our Discover it® Student Cash Back review for more details.

What to look for in an unsecured credit card

Unsecured credit cards for bad credit aren’t all the same, so you’ll need to compare the cards and all their details to find the right fit.

what you want:

  • Automatic review of credit limit increase. Unsecured bad credit cards are likely to start with a low credit limit. However, many give you the opportunity to qualify for a higher credit limit in as little as six months, which may boost your credit score as well as expand your purchasing power.
  • An application process that reviews factors other than your credit score. Some bad credit cards, including the Petal 1 “no annual fee” visa card, look at factors like your banking history to see if they can approve you. This can be useful if your credit score is really low or if you have no credit score at all.
  • Reporting to major credit bureaus. You want to make sure the cards you consider report balances and payments to the three credit bureaus – Equifax, Experian, and TransUnion. Ultimately, this report is what will help you build credit over time.
  • Rewards. Watch out for cards that offer rewards, but only when it makes sense. For example, you should never sacrifice a better interest rate for rewards if you know you will be carrying a credit.

What you don’t want:

  • Expensive annual fees. You should strive to choose a new credit card that does not charge an annual fee if you can. If you decide to pay an annual fee, make sure you get something you want in return (and that the math works in your favour). For example, a card that does not earn rewards and does not charge any annual fees will not cost you anything unless you have credit. On the other hand, until you spend $9,900 on a card that gets 1 percent cashback and charges an annual fee of $99, you’ll lose money.
  • hidden fees. In addition to looking for cards that don’t charge a high annual fee, watch out for hidden fees like application fees or monthly account fees. If you’re traveling internationally, you should also find a card that doesn’t charge foreign transaction fees.
  • high interest rates. Look for a card with a reasonable interest rate if you plan to carry a balance from time to time.

How to fix your credit card

Fixing your credit card may take some time, but the steps are the same for everyone. The following tips can help you get the best results in the shortest possible time.

  • Always pay your bill on time. The most important factor that makes up your FICO score is your payment history, so you should strive to pay all your bills early or on time every month. Where payments on time can be a boon to your score, late payments can have disastrous effects.
  • Keep debt levels to a minimum. The second most important factor that makes up your FICO score is the amount you owe in relation to your credit limits. Try to keep your balance below 30 percent of your available balance. For best results, pay it in full every month.
  • Request a higher credit limit ASAP. If you have credit, having a higher credit limit can lower your usage rate by default. If you qualify for a credit limit increase at any point, you should take one. However, make sure to avoid accumulating more debt or else you will not be better off.

When a secured credit card makes more sense

If your credit score is poor and you can’t get an unsecured credit card, don’t be afraid to sign up for a secured credit card. Although making a cash deposit may not seem ideal, secured credit cards give you the opportunity to build credit when other cards aren’t. Additionally, many secured credit cards offer rewards with no annual fees, and you can upgrade to an unsecured credit card once your score improves.

Finally, remember that your security deposit is not lost. When you close or upgrade a secured credit card in good standing, you will get your full security deposit back.

bottom line

The best unsecured credit cards for bad credit may not be exactly what you want, but they allow you to borrow money and some offer rewards. Most importantly, cards in this area give you the opportunity to build credit so that you can get a better credit card later.

The cards we highlight on this page are worth checking out, but be sure to compare other credit cards for bad credit and fair credit before you decide.

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