If you have a credit score between 400 and 550, do not exclude yourself from having a good credit card. Instead, consider applying for an unsecured credit card that will help you build a better credit history. In this article, we highlight the seven best unsecured credit cards for credit scores in the 400 to 550 range. To make an informed decision, you’ll also learn about the interest rates, fees, and credit limits these cards can offer you.
What is an unsecured credit card?
An unsecured credit card is exactly what comes to mind when you think of a typical credit card. This is because it is the most common type. In essence, unsecured credit cards come with a credit line that is not protected by a refundable security deposit – unlike secured credit cards. The choice between an unsecured credit card and a secured credit card usually depends on your credit score. People with limited or poor credit history benefit most from secured credit cards because secured credit cards often offer them better terms and interest rates (average of 16%). However, if you have a lower credit score and prefer an unsecured credit card, there are still good options to choose from that will put you on the right track to improving your credit.
What are the important factors to consider when choosing a credit card?
Whether you are a student or an entrepreneur looking to expand your business, you can find an unsecured credit card that meets your credit building needs. There are different types of unsecured credit cards that offer different benefits and terms. Finding the right offer for you requires comparing and analyzing possible offers based on important factors, such as:
- Required amount of insurance
- Interest rate
- Annual, monthly, one-time fee
- credit limit
- Minimum monthly payments
- Rewards system
Some unsecured credit cards reward users for making their payments on time through a points system. In return, cardholders can use these points to redeem free items or discounts on food, airlines, or hotels. Other credit cards offer low introductory APRs and do not require you to pay an annual fee. It is also possible to find an unsecured credit card that does not require a credit check. But it’s important to note that credit cards that don’t require credit checks have significant interest rates. To be safe, you should always familiarize yourself with the terms of credit cards.
Although you will be able to get approved for a credit card, a lower credit score will affect the terms of an unsecured credit card, including a lower credit limit, higher annual fees, and a higher interest rate.
Top 5 Credit Cards for a 400-550 . Credit Score
Based on our research, the following seven options are the best unsecured credit cards for a credit score between 400 and 550. This table provides quick details on each card, including annual, monthly, and one-time fees, as well as the interest rate ( APR) and credit limit. Because these credit cards are for people with little or no credit history, fees and interest rates are high, and credit limits are low — compared to other unsecured credit cards.
|Credit card||Annual fee||monthly fee||One time fee||normal april||credit limit|
|City® MasterCard Insurance®||Nobody||Nobody||Nobody||26.99% (Variable)||
|Chime Credit Builder Visa||Nobody||Nobody||Nobody||22.49% (Variable)||5000 dollars|
|Citi Custom Cashpoison Card||Nobody||Nobody||Nobody||13.99%-23.99% (Variable)||500 dollars|
|Unsecured Visa Classic® Classic Card from Applied Bank®||First year: $75
Subsequent years: $45
|First year: none
Subsequent years: $6.25
|Fit Mastercard® credit card||$99||First year: none
Subsequent years: $6.25
|$89||29.99% (variable)||400 dollars|
|Indigo® Mastercard® with less than perfect credit||$0 – $99||Nobody||Nobody||24.9%||300 dollars|
|Surge Mastercard® Credit Card||$75 – $99||First year: none
Subsequent years: $10
|Nobody||25.9% – 29.99% (variable)||Up to $750|
|First Digital Mastercard®||First year: $75
Later years: $48
|First year: none
Subsequent years: $6.25
City® MasterCard Insurance®
Although we named this article the Best Secured Cards for People with Low Credit Scores, I thought it would be helpful to mention two secured options that can increase your credit score quickly so you can switch from secure to unsecured as quickly as possible and return Build your balance. The two options we would like to mention for secured credit card are Citi Secured Mastercard and Chime Credit Builder Visa.
The Citi Secured Mastercard offers credit limits ranging from $200 to $2,500. Once available, Citi also gives you free access to your FICO score online, and reports it to all three credit bureaus.
Chime Credit Builder Visa
The Chime Credit Builder Visa is currently one of the best ways to quickly rebuild your credit. They say on their website that their card can increase your credit score by an average of 30 points. It’s also a no-brainer from a cost perspective because the card has no annual fee, no interest, no minimum security deposit, and no application credit check.
Citi Custom Cashpoison Card
The Citi Custom Cash Credit may be a good option for people who do not have very high FICO scores. We’ve read reports of some people getting approval with scores in the top 500 seconds. Offer amazing benefits to a card in this category with up to 5% cashback on certain categories and 1% unlimited cashback on all other purchases.
Unsecured Visa Classic® Classic Card from Applied Bank®
By using the Applied Bank® Unsecured Classic Visa® Card responsibly, those with bad credit can steadily improve their credit score. To open this unsecured credit card, you will have to pay several non-refundable fees, including a one-time fee of $89. Additionally, annual fees start at $75 and drop to $45 in the second year. However, you can enjoy your entire first year with the card without a monthly fee. In the second year, this monthly fee is then increased to $6.25 and continues in all subsequent years. Although the fees are steep, this card does not require a security deposit.
Monthly credit reports help you build credit quickly
At 29.99%, this unsecured credit card has one of the highest interest rates among our top seven picks. This means that in order to save money on interest, you should try to make full payments each month, rather than the minimum payment. This card is a winner if you want to build your credit quickly because it automatically sends your information to three different credit bureaus each month. However, some of the negatives of this unsecured credit card include the low credit limit of $300, no grace period, and no rewards program.
Fit Mastercard® credit card
With our easy application process, you can get approved for a Fit Mastercard® credit card quickly. However, you must first prove that you have a checking account. You will also need to pay a fairly high one-time fee of $89. Although the card does not require you to pay a monthly fee the first year, you will have to pay a $99 annual fee each year you own the card. One of the advantages of this card is its grace period of 25 days. This means you have 25 days to make a payment before interest accrues. In addition, your credit information will be analyzed monthly, giving you the opportunity to constantly improve your record.
This card provides you with a credit limit of $400
You can use this unsecured credit card anywhere Mastercard is accepted. Although this card does not offer rewards for purchases, it does give you a credit limit of $400, which is higher than most other credit cards for lower credit scores. With this additional credit limit, you have additional flexibility to make emergency purchases. However, it is important to note that the interest rate is high, as are the other credit cards on this list. At 29.99%, this credit card offers a variable interest rate, which means the rate can change over time based on market interest rates. The maximum delay fee for this card is $40.
Indigo® Mastercard® with less than perfect credit
The Indigo® Mastercard® with less than perfect balance offers great benefits. One of the best features of this card is its pre-qualification option. This means that without affecting your credit score, you can inquire about the possibility of approval before actually applying. Additionally, depending on your credit history, you may be exempt from having to pay a recurring annual fee. However, the maximum potential annual fee for this card is $99. Although these annual fees are steep, they are the only recurring fees you should keep in mind. The Indigo® Mastercard® with Less than Perfect Credit has no one-time or monthly payment fees, which will help you save money to focus on building your credit.
With a credit limit of $300, this car doesn’t give you extra space for emergency purchases. But it offers a 25-day grace period and an interest rate of 24.9%, the lowest of all the unsecured credit cards on this list. Plus, with this credit card, you’ll have 24/7 online access to your account so you can monitor your spending responsibly. If your credit card is lost or stolen, which could negatively affect your balance, you will receive fraud protection.
Surge Mastercard® Credit Card
The Surge Mastercard® credit card offers a high credit limit of $750, but this depends on your credit eligibility. However, this high credit limit comes at a high price. This card is rather expensive, with annual fees ranging from $75 to $99. The $10 monthly fee begins in the second year, but you may be eligible for a fee waiver if a $750 credit line is approved. This credit card also allows you to get pre-approved. Although this does not guarantee approval, it will allow you to get a good idea without negatively affecting your credit score. In addition, before you can open this card, you must prove that you have a checking account.
The 25-day grace period will help you keep interest low
Other expenses you should consider with this credit card include the variable interest rate from 25.99% to 29.99%. This is a high interest rate that will require you to make purchases responsibly if you need to monitor your spending. But, the Surge Mastercard® credit card will provide you with a grace period of 25 days, giving you a measure of freedom to make your payments before this high interest rate applies.
First Digital Mastercard®
Your First Digital Mastercard®, when used responsibly, will help you improve your balance. With no security deposit required, you can get a minimum credit line of $300. However, you should keep in mind that the annual fee for this credit card is $75 in your first year. This annual fee will be immediately applied to your credit line. This means that initially, you will only have $225 to spend. In the second year, the annual fee will drop to $48, but the monthly fee will take effect at $6.25.
However, there are downsides to this credit card. The interest rate on First Digital Mastercard® is 35.99%, which is well above the average interest rate for an unsecured credit card. Plus, unlike other unsecured bad credit credit cards that are easy to get, this credit card requires a credit check before you can be approved.
Having a credit score between 400 and 550 does not mean that you do not qualify for approval for an unsecured credit card. Today, there are plenty of credit cards that you can choose from that will help you improve your credit history, but you should use them responsibly and be aware of the high interest rates. The seven unsecured credit cards mentioned in this article will give you that opportunity. Although they have high recurring fees and low credit limits, they can help you until you are ready to get a different credit card with lower expenses and greater financial freedom.
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