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If you have bad credit, you’re not alone. About 16% of Americans have bad credit1, while only a tiny sliver have perfect credit at 1.2%.
And if you’re concerned about getting a credit card because of your situation, don’t worry.
There are several credit cards for bad credit, here are six that offer an unsecured card with no deposit.
Comparison of the Best 6 Credit Cards for Bad Credit
|Credit Card||Introductory APR||Annual Fee||Foreign Transaction Fees||Rewards|
|Mission Lane||19.49% – 29.99%||$0 – $75||3%||Unlimited 1% – 1.5% Cash Back|
|Petal 1||22.24% – 31.74%||No Annual Fee||No||2% – 10% Cash Back|
|Grow Credit||0%||Varies By Plan||No||No Cash Back|
|Tomo||0%||No Annual Fee||No||1% Cash Back|
|Capital One Platinum Credit Card||26.99%||No Annual Fee||No||No Cash Back|
What we like about Mission Lane is that they want to do business with people who have bad credit. Even with a credit score in the low 500s, you might be able to qualify for one of their cards.
That is rare.
With an APR of 19.49% – 29.99%, Mission Lane ranks in the middle of this list.
If you’re eligible for an APR closer to 19.49%, that’s less than the American average of 22.21%, which is quite good.
However, if you’re only eligible for a higher APR closer to 29.99%, that can lead to significant interest.
If that’s the case, you’ll probably want to consider a different card.
For cash back, Mission Lane is solid, offering unlimited 1% – 1.5% cash back, ranking second on the list.
And for an annual fee, some users pay nothing, while others can pay up to $75, depending on your trustworthiness and other factors.
You can learn more about Mission Lane’s terms and conditions here.
Other benefits of this credit card include access to bigger lines of credit over time as you use it responsibly and promptly make payments.
Mission Lane offers helpful tools to help educate you on your finances and build your credit.
You can conveniently manage your account through their website or app and speak to a professional customer service rep whenever you have questions.
And finally, they’ll give you an instant credit decision so you’ll quickly know right away if you’re approved or not.Try Mission Lane
Source: Petal 1
The first thing to know about the Petal 1 unsecured Visa credit card is that it has a variable APR ranging from 22.24% – 31.74%.
While an APR closer to 22.24% is fairly reasonable for an unsecured card with bad credit and no security deposit, it’s not so attractive as you approach 31.74%. For a comparison, that’s over 10% higher than the American average of 21.40%.
So keep this in mind if you decide to apply for this unsecured Visa credit card.
But other than the potentially high APR, everything else about Petal 1 is quite attractive.
Petal 1 offers 2% – 10% cash back at select merchants, making it the best cash rewards credit card on this list.
There’s a straightforward application process where they simply ask for your contact info, birthday, and Social Security number (this won’t affect your credit score).
Source: Petal 1
And Petal 1 has up to a $5,000 credit limit for some users.
They also have the Petal Leap program that allows you to potentially earn a credit line increase after six months, as long as you make payments on time and maintain a healthy credit score.
If you’re looking to build credit and increase your credit limit, Petal 1 should be right up your alley.
Finally, this unsecured card has some other nice features like AutoPay to ensure you make 100% of your payments on time, as well as the option to connect it to your Apple Pay or Google Pay account.
Source: Petal 1
Put it all together, and Petal 1 is a great card issuer if you have less than perfect credit, want a robust cash rewards credit card, and don’t want to deal with secured Visa collateral.
Source: Grow Credit
Let us start by saying this isn’t a conventional credit card in the sense that you can use it to pay for almost anything.
Instead, Grow Credit gives you a Mastercard that can only be used to pay for your subscriptions while building credit.
Here’s how it works.
- Set up your Grow Credit account
- Add your subscriptions (Amazon Prime, Netflix, Hulu, etc.)
- Add your credit card to your subscription accounts
From there, “Your subscriptions are paid with your new card and your payments are made consistently which contributes to a better credit score.”
It’s a simple concept that’s perfect if you have bad credit, use multiple subscription services, and want an easy way to start building credit.
Source: Grow Credit
We like Grow Credit because it’s innovative and there’s no APR, so you don’t have to deal with any interest.
As for downsides, there’s two main issues that stick out.
One is that this card requires a paid membership unless you’re using the most basic “Build Free” plan. Unfortunately, that plan only has a paltry $17 monthly credit limit.
And if you don’t meet the underwriting criteria for the Build Free plan, it costs $1.99 per month.
The two other plans have a slightly higher credit limit, but it’s nothing major.
For example, the “Grow Membership” plan costs $3.99 per month and has a $50 monthly credit limit, and the “Accelerate Membership” plan costs $7.99 per month and has a $150 monthly credit limit.
Here’s a full overview of Grow Credit plans.
Source: Grow Credit
The bottom line is this is an innovative unsecured credit card that looks beyond your credit report, which means you don’t need good credit to be eligible. It also has 0% APR, and it’s great for rebuilding credit for heavy subscription users.
However, you should be aware of the monthly fees for more robust plans and the low monthly credit limit. Also, there’s no cash back, which may be a turn-off for some users.Try Grow Credit
Tomo has a lot going for it.
There’s a 0% interest rate and no annual fee, foreign transaction fee, balance transfer fee, or cash advance fee.
You can get up to $10,000 in spending power, and there’s no credit history required, which is really impressive for an unsecured credit card.
They also offer some solid cash back rewards from popular brands like Lyft, DoorDash, HelloFresh, and more.
Beyond that, they have some other nice perks like:
- Travel rewards to over 40 international cities
- A 24/7 concierge service to help you locate hard-to-find items
- $1,000 cell phone protection
- Zero liability for unauthorized purchases on your card
- 24/7 access to identity theft experts if theres been suspicious activity
- Emergency assistance anywhere in the world at any time in any language
And if that wasn’t enough, Tomo is super forgiving if you have bad credit.
They recognize that people are more than just an “arbitrary credit score,” and they look at a variety of other metrics when determining eligibility.
While you’re not guaranteed approval, there’s a good approval rate considering there are currently more than 30,000 people with a Tomo credit card.
We personally consider Tomo to be one of the more innovative unsecured credit card options, and we love how they empower people to take control of their finances with a credit builder account.
And it’s hard to beat a 0% interest rate, no annual fee, and high credit limit, especially under the circumstances.
As long as you use your Tomo credit card responsibly, you can, in time, build fair credit or even good credit.
Capital One Platinum Credit Card
Source: Capital One
With a 26.99% interest rate, the Capital One Platinum Credit Card is one of the higher APRs on this list. So you’ll want to be diligent about promptly paying off your bills so you don’t get charged interest.
There’s also no rewards program with this credit card, which isn’t ideal.
But once you get past that, it’s one of the best credit card options for people with poor credit.
There’s no annual fee or foreign transaction fee. Pre-approval is super fast, and you can find out if you’re eligible within minutes without it impacting your credit score.
Capital One offers built-in credit score monitoring through CreditWise, which makes it easy to stay on top of your credit at all times.
There’s $0 fraud liability, meaning you’re fully covered if your card is ever lost or stolen.
And Capital One has some other nice perks like cash advance options, automatic alerts for suspicious activity or unexpected charges, streamlined account management through a single app, and free sources to improve your financial literacy.
Source: Capital One
As long as you’re smart about using the Capital One Platinum credit card and pay your balance on time, this can go a long way in rebuilding credit.
Also, note that Capital One has several other cards, including unsecured cards, secured cards, and a platinum secured credit card, for building credit.
So using the Capital One Platinum credit card can potentially open the door for other opportunities.
You can find some of the best secured credit card options here.
And given that you can be considered for a higher credit limit in as little as six months, it’s a good option if you want a bigger credit line later on.
On a side note, if you aren’t approved for this particular card, you may want to apply for a Platinum Secured credit card, as your odds of approval should increase.
What Should I Look For in a Credit Card With Bad Credit?
There are three main things to look for.
First, you want a credit issuer that offers a fair interest rate.
Obviously, you can’t expect as low of an interest rate as a traditional credit card that’s designed for someone with fair/good credit or one that requires a security deposit.
But it should be reasonable enough that you’re not drowning in interest.
- Grow Credit and Tomo have a 0% interest rate
- Self Visa Card has a 26.24% interest rate
- Capital One Platinum has a 26.99% interest rate
- Petal 1’s interest rate starts at 22.24% but can go as high as 31.74%
Second, you want to pay little for an unsecured credit card–no annual fee, foreign transaction fee, or balance transfer fee.
Petal 1, Tomo, and Capital One all fall under this category.
Grow Credit has a minimal annual fee, which varies by plan, and no foreign transaction fee.
Self Visa Card has a $25 annual fee and no foreign transaction fee.
Third, you should look for a card issuer that can help with rebuilding credit and improving your credit score.
When you’re in a tough situation because of poor credit, it reduces your leverage and limits your options.
But choosing a card issuer with a clear path to rebuilding credit lets you gradually improve your situation, which should give you more options in the long run.
This can help you go from having bad credit to fair credit to potentially good credit over time.
On a side note, a cash rewards credit card is usually preferable to one without cash rewards.
All six of these unsecured credit card options check that box without requiring a security deposit.
How Do I Apply for a Credit Card With Bad Credit?
It’s simple. Strategically look for credit cards that don’t look at your credit score or credit report as the main deciding factor in determining eligibility.
Note that a secured card is usually easier to get approved for because you’re putting up collateral.
However, as we’ve shown in this article, several unsecured card providers are quite lenient.
Fortunately, we’re at a point where many credit card companies are willing to overlook credit scores and credit history and accept people with bad credit as long as they’re trustworthy overall.
Just look for a card issuer that has what you’re looking for in terms of a reasonable interest rate, little to no fees, and so on, and apply.
All of the cards on this list have a simple application process, with most letting you know the results within minutes.
It simply involves providing your contact information, birthday, Social Security number, and, in some cases, answering a few additional questions.
From there, you can see what you’re eligible for and get started.
The bottom line is having bad credit is by no means a death sentence, and there are multiple options available, with some offering a healthy credit line.
How We Selected These Cards
We based our choices on three main criteria:
- Card companies not relying primarily on a credit check or credit score to determine eligibility
- Offering an unsecured card with no security deposit
- Giving you the chance to build credit
While performing a credit check and/or looking at a credit score is a common way card issuers determine a borrower’s trustworthiness, it’s not the only way to go about it.
Many credit cards take other factors into account and don’t base their decision solely on your past credit history. These six credit cards all fall into that category, which means they’re more lenient than most traditional lenders.
As for no security deposit, none of these credit cards require you to put up collateral.
This means they all offer unsecured cards rather than secured cards with zero security deposit.
Finally, each card issuer has a framework in place to help you build credit, which is typically done by reporting to the “big three” credit bureaus, which include TransUnion, Equifax, and Experian.
So if you have less than perfect credit, this gives you an opportunity to get back on track as long as you make your payments on time and remain in good standing.
These six credit cards offer plenty of leniency with their eligibility, don’t require a security deposit, and can be the catalyst for helping you rebuild credit.
While there’s no guaranteed approval, you have much better chances of getting approved for one of these unsecured credit cards than many others.
We understand how frustrating getting a credit card with bad credit can be.
Everyone’s situation is different, but sometimes all you need is a second chance to regain your momentum and hopefully, in time, boost your credit score.
These six credit cards are all specifically designed for those with bad credit, as they don’t look strictly at your credit report and also don’t require a security deposit.
Citations: 1. https://www.badcredit.org/how-to/how-many-americans-have-bad-credit/
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Nick is an author, small business owner, and finance/digital marketing writer. He’s been covering the industry for over a decade and loves exploring topics to help other small businesses succeed. You can connect with him at Nickmannwrites.com.