It may be you have had some financial problems in the past and aren’t sure if you can get approved for a credit card that doesn’t require a deposit. You may have already had difficulty applying for a loan with bad credit, and are thinking that a credit card may be just as difficult.
But the chances are that you probably can quality. There are many offers for unsecured credit cards for bad credit customers on the market today. In fact, you will likely have a number of different options.
About Secured Credit Cards
There are a lot of offers out there for secured credit cards, and they vary greatly. Most will require a deposit equal to your credit line, though depending on your credit score, you might get a credit line two or three times the size of the deposit. Because these companies take a deposit for their credit cards, they are similar to no credit check loans, which do not look at your credit history.
And many times, you can earn credit line increases or graduate from a secured to an unsecured card by making a specified number of on-time monthly payments.
However, many still don’t want to tie up hundreds of dollars in cash in order to get accepted on a credit card request form. What are the other options?
Unsecured Credit Cards for bad credit
Some companies will allow you an unsecured credit card for bad credit users, but it may depend on precisely how bad your credit history is. Other companies may not care about the exact credit score and may not even run a credit check.
If you qualify for an unsecured card, you still have to evaluate the other factors to decide which card to request. For example, carefully consider the following:
- The APR. If you are familiar with personal loans, this is likely the first T&C you think of, though it’s not necessarily the most important one. If you can avoid paying interest, after all, your interest rate will be irrelevant.
- Fees. If you have to pay an annual fee just for the privilege of using the card, that’s a major drawback. And you also need to take note of late fee amounts, cash withdrawal fees, and foreign transaction fees.
- Credit Line. If you pay on your card frequently, you may not need a huge credit line, but you can’t go below a certain minimum before the card becomes very inconvenient to use. Some card companies will give you a higher credit line than others, so be sure to compare.
- Is Interest Avoidable. We hinted at this above, but be sure to check if interest automatically accrues or if you can avoid it by paying your balance off within a month or within 20 days.
- What Future Progress is Possible? Does the card offer specify anything about increasing your credit line, lowering your APR, or other advancements if you make on-time payments?
- Special Perks and Introductory Periods. Does the credit card give you a no or low interest intro period? Does it offer a rewards program of some kind or cash back on any purchases?
The bottom line is that unsecured credit cards for bad credit history customers do exist, and even abound. Almost all customers have a number of choices, so it’s worthwhile to sort through them and find the offer that best fits your needs and preferences.
Why Choose Unsecured Credit Cards for Bad Credit
Unsecured credit cards for bad credit are often preferred over secured ones for a number of important reasons.
The first (and most obvious) of these reasons is that unsecured credit cards for bad credit do not tie up hundreds of dollars of your money in a deposit.
Second, you can usually (not always) get a higher credit limit with an unsecured card. That gives you greater financial flexibility.
Third, you can often get a somewhat better APR on an unsecured card. But again, that’s not a 100% rule.
How Can Companies Offer Bad Credit Credit Cards Unsecured?
There are a number of ways that credit card companies can afford to offer bad credit credit cards unsecured. First of all, many people with below average credit scores are fully able and willing to make their credit card payments on time.
But also consider that bad credit unsecured credit cards will tend to have somewhat smaller credit lines and higher interest and fee rates than “good credit cards.”
Thus, there isn’t necessarily even a need to run a credit check. Some will and some won’t. If a credit check is run, it will likely help determine the terms of your card.
Requesting Bad Credit Unsecured Credit Cards
Bad credit unsecured credit cards abound, and you can find them quickly with a simple online search. But if you just randomly start requesting this card and that card, some potential bad outcomes include:
- Multiple requests, rejected requests, and numerous credit checks can combine to hurt your credit score further.
- You won’t have time to compare enough card offers in detail, and you may not even understand some of the terms and terminology.
- You could end up choosing one unsecured credit card for bad credit only to later realize a different one would have better fit your needs.
Bonsai FinanceOur take: Online marketplace that searches through lenders to find the best offer for your personal situation Show more
Credit Score Loan Size/Amount Loan Term APR Origination Fee All can apply $100 - $15,000 1 - 60 4.99% - 1.386% Varies by lenderCredit ScoreAll can applyLoan Size/Amount$100 - $15,000Loan Term1 - 60APR4.99% - 1.386%Origination FeeVaries by lender
Bonsai Can Find Your Ideal Unsecured Credit Card for Bad Credit
We at Bonsai Finance specialize in searching through large numbers of unsecured credit card for bad credit offers in practically no time at all. Our focused, high-powered search engines and our vast network of card companies means you get easily comparable results fast.
At Bonsai, we can also give you expert advice and tips on how to identify the best bad credit credit cards unsecured by a deposit. We know the factors that are most important, and we know what kind of “deals” are usually available for those with specific credit ratings and at particular income levels.
Bonsai Finance has the tools and the experienced staff it takes to empower you to make an informed decision on which unsecured credit card is right for you. Just put all the factors most important to you into the search query, and soon, you will be looking at a “short list” of your “prime prospects.”
Then, we further assist you by giving you sound advice that will help you compare your best few offers to find your best one.
How Unsecured Credit Cards for Bad Credit Can Help You Financially
Unsecured credit cards for bad credit customers are a real help to people struggling with a bad credit history.
By providing a card to use for processing online bill payments, making large purchases in-store without carrying large quantities of cash about, and providing a record at the card company bank of every transaction you make with the card, you gain more “elbow room” to manage your finances in a flexible but responsible way.
Plus, if you are living paycheck to paycheck, and you have the income on the way to pay your bills, buy your groceries, and meet all other expenses (but it just isn’t there in the bank yet), an unsecured credit card that accepts bad credit will let you tide yourself over till that next check arrives.
This can help you avoid late payments (and associated fees) and having to wait excessively long to make ordinary purchases that you need to make and plan to make anyway.
Plus, by avoiding a security deposit, you keep more cash on hand and don’t have your limited funds tied up for months or years on end.
How Unsecured Credit Cards for Bad Credit Can Help You Get Better Credit
The ultimate goal of unsecured credit cards for bad credit, besides just using them from day to day and month to month, is to help you rebuild damaged credit.
Every time you make an on-time credit card payment, your credit score receives a positive impact. Over the course of months and years, the cumulative effect of responsibly using your unsecured bad credit credit card can be quite dramatic.
Hundreds of points rise on your credit score is not at all unheard of. As soon as you have no delinquent accounts and every payment you owe (that shows up on the credit score radar) is on time, you have changed your whole direction as to credit history. And on-time payments are one of the most important factors in determining credit reports.
Plus, the more you use your card and pay it off, the higher your credit line will rise and the lower your APR will sink. And by avoiding a credit check and using your card to tide you over (if necessary) and always avoid a late car, house, insurance, or other payment, you protect your credit from further negative impacts.
Eventually, your card can transform into a good credit credit card. Or, you can qualify for a new card with a much lower APR and fees. It takes time, but by persevering in financial responsibility with your bad credit card, you eventually will break through and become a “good credit card holder.”