Best credit cards for bad credit

Secured cards are better for improving your credit score relatively quickly. Many unsecured cards for average or fair credit earn cash back rewards, balance transfer options and come with other perks. Some cards offer cash back rewards through statement credits, but you’ll only come out ahead if you aren’t paying a high interest rate on those purchases — especially considering potential fees.

Additionally, even if you can qualify for a rewards cards, those types of credit cards are easy to misuse — if your credit score is bad already, you’re likely better off getting a simple card and keeping the balance low.

The Capital One Secured Mastercard includes many of the same benefits as Capital One’s unsecured credit cards, like account management tools and added security protection.

• CreditWise: CreditWise is a free service from Capital One that lets you keep track of your credit score over time. Cardholders can also access online educational resources about credit and finance for free.
• Mobile banking: Instantly access your account to pay bills or remotely check your balance.
• Fraud protection: Capital One Secured credit cardholders aren’t held financially responsible for fraudulent purchases made with their card.

The Capital One Secured Mastercard has a variable interest rate. Cardholders can avoid interest by paying the balance in full within 25 days after the close of each billing cycle. There’s no penalty APR, but late payment fees increase to $39. Capital One Secured cardholders don’t pay an annual fee, but there is a 3% ($10 minimum) fee on each cash advance.

Even though Capital One Secured Mastercard doesn’t come with many extra benefits, it’s our overall pick for best credit card for bad credit because it’s easy to upgrade in a relatively short amount of time and there’s no annual fee.

The Wells Fargo Secured credit card has enough benefits to make the $25 annual fee worth it.

• Cell phone protection: Get up to $600 cell phone protection when you pay your phone bill with the Wells Fargo Secured card. Be aware that cell phone protection does not cover cell phones that are lost or vanish without explanation.
• Travel perks: Auto rental collision damage waivers, emergency card replacement, roadside dispatch, travel and emergency assistance services.
• Fraud protection: Get alerts about suspicious account activity. Plus, cardholders aren’t held financially responsible for unauthorized transactions.

Like most secured credit cards, you obtain a Wells Fargo Secured credit line through a refundable deposit, and the annual fee comes out of your initial credit line. Cardholders can avoid paying interest by settling their balance at least 25 days after the close of each billing cycle. In addition to the annual fee, cardholders pay a 5% fee on cash advances and a $12.50–$20 per-transaction fee for overdraft protection. There is also a fee up to $37 for each late payment or returned payment.

If you have bad credit, the Wells Fargo Secured credit card is a smart choice to build credit. You have the double benefits of improving your credit score with cell phone protection by merely paying your phone bill every month and paying off the balance promptly with the Wells Fargo Secured card.

Not a lot of unsecured cards come with perks like cash-back rewards and flexible payments, though online management tools are standard for unsecured cards that charge an annual fee.

• Cashback rewards: All Credit One Platinum cardholders earn 1% cash back rewards on purchases including groceries, gas, and monthly bills for internet, phone and TV services.
• Flexible payments: Cardholders can pick the date their payment is due.
• Management tools: Credit One Bank Platinum Visa cardholders get free access to monthly credit scores, fraud protection and custom account notification.

The applicant’s creditworthiness will determine the first annual fee and billed when you open the account, which lowers your initial credit score. Some cardholders might have to pay a monthly fee after the first year. In addition to the annual fee, there is a 5% fee per cash advance and a $38 fee per late payment or returned payment. Also, be aware that on accounts without a grace period, purchases start accruing interest immediately. The Credit One Unsecured Platinum Visa has high-interest rates, even by bad credit standards.

The Credit One Bank Platinum Visa card could be a good option, depending on the annual fee you qualify and whether or not your account has a grace period. If you don’t qualify for a grace period, the Credit One Bank Platinum Visa card only makes sense if you pay off purchases immediately. Otherwise, you’ll pay too much interest to make it worth the 1% cash back on eligible rewards.

OpenSky Secured Visa benefits that could make it worth paying the annual fee are the easy application process and free online resources.

• Easy application: Prospective OpenSky Secured cardholders don’t have to worry about prequalifying since there’s no credit check. The online application is simple and completed in minutes.
• Free online resources:  OpenSky Secured Visa cardholders have access to a wide range of financial education tools for understanding how to build or rebuild credit as well as strategies for managing debt responsibly.

Potential OpenSky Secured Visa cardholders must pay a $35 annual fee and a security deposit to get this account. The security deposit amount determines a line of credit and can range from $200–$3,000. Keep in mind the annual fee will lower your initial credit line.  The OpenSky Secured Visa offers a relatively low-interest rate for a secured credit card, and you can avoid interest charges by settling your balance in full within 25 days of each billing cycle. Late payment fees are up to $38 and returned payment fees are up to $25.

The OpenSky Secured Visa credit card doesn’t come with a lot of benefits, but it’s one of the best cards for students with poor credit because of the easy application process and financial literacy tools. This is a sound card for those with bad or poor credit who want to pay their balance in full each month and build or rebuild their credit profile.

Enjoy unlimited cash back on every purchase and business benefits like year-end summaries and additional cards for employees at no extra cost. Plus, you have access to customer service representatives specially trained to work with small businesses.

• Fraud coverage and alerts: You won’t be liable for expenses if your card is lost or stolen. Receive fraud alerts in real time through text, email or phone. With purchase security, you’ll be covered for 90 days if any items purchased with the Capital One Spark Classic for Business card are damaged or stolen.
• Extended protection: Some items purchased with Capital One Spark Classic for Business card are eligible for extended warranty protection for up to one year beyond the manufacturer’s warranty.
• Flexible rewards: You’ll earn unlimited 1% cash back on every purchase. Cash back can be redeemed for money, statement credits, gift cards and more, though redemption rates vary. You can also transfer rewards between some other Capital One rewards accounts.

You won’t ever have to pay annual fees or foreign transaction fees, but there is a fee for cash advances of 3% (or $10, whichever is greater). If approved for a Capital One Spark Classic for Business credit card, your minimum credit lines start at $500. Your balance due date will be at least 25 days after the end of each billing cycle. A $39 late fee applies to late payments.

The Capital One Spark Classic for Business card is worth it if you want easy-to-use rewards benefits while you’re working on building your business’ credit. What this card lacks in a sign-up bonus, it makes up for with extra benefits and greater opportunities if used correctly.

The Capital One QuicksilverOne cash rewards card comes with standard Capital One perks like $0 fraud liability protection, account management tools and more.

• Cash back rewards: Cardholders don’t have to worry about signing up for rotating categories to maximize Capital One QuicksilverOne cash back. Earn an unlimited 1.5% cash back on every purchase. Cash back never expires as long as the account is in good standing and is redeemable for any amount.
• Account management tools: Capital One QuicksilverOne cardholders can personalize alerts and manage their credit card account through Capital One’s mobile app. Through CreditWise, cardholders can better understand their credit score and keep up with changes as they occur.

Capital One QuicksilverOne cardholders pay variable APR on balances carried month over month but can avoid paying interest by settling their balance within 25 days after the end of each billing cycle. There’s no penalty APR, but late payment fees can be up to $39 each. The annual fee is $39.

If you don’t mind the annual fee, Capital One QuicksilverOne is a good card to earn some cash back rewards while improving your credit profile. Cardholders can earn unlimited cash back, and Capital One can increase your credit limit after five months of regular payments and responsible use.