Best Unsecured Credit Cards for Bad Credit (Jan 2024)

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Unsecured credit cards for bad credit require no security deposit and have higher credit limits than secured credit card.

AskMrCreditCard.com has compared every unsecured credit card targeting those with poor credit and curated our recommendations.

Summary: Best Unsecured Credit Cards for Bad Credit

Card	Credit Limit	Why We Like
Reflex Mastercard	$300 - $1,000	Credit Limit Doubles After 6 Months of on-time payments
Syrge Mastercard	$300 - $1,000	Credit Limit Doubles After 6 Months of on-time payments
Fit Mastercard	$400	Credit Limit Doubles After 6 Months of on-time payments
Destiny Mastercard	$700	Accept BK applicants Consistent Credit Bureau Reporting
Milestone Mastercard	$700	Accept BK applicants Consistent Credit Bureau Reporting
First Digital Mastercard	$300	Can Pay with Debit Card No Payment Holds

Updated On 10 January 2024

Reflex Mastercard - Maximum Credit Limit of $4,000

Who Is this card for? - Reflex Mastercard is for those who have bad credit scores in the 550-650 range looking to rebuild their credit with an unsecured credit card with no deposit with a good credit limit that will increase over time. With the Reflex Mastercard, this is possible because after paying on time for the first 6 months, your credit limit will be doubled from a starting credit limit of between $300 to $1,000 to between $600 to $2,000. The maximum credit limit for this card is $4,000. It is also a card for those who want features like free credit scores and the ability to manage your account from an app.

Why We Like This Card - We like this card because they have modern features that most prime cards have. For example, they have a slick mobile app, let's you check your Vantage score for free and more importantly, have a track record of credit limit increases. Their fees and rates come in a range so that those of you on the "upper end" of the bad credit spectrum (620-640 score) will get low fees, high credit limit and a lower APR. However, those of you on the lower end of the "poor credit spectrum" (550-600) will have a higher chance of approval though you may have to pay higher fees.

Requirements

Minimum credit score of 570
Total Debt (including mortage) cannot exceed $80,000 if you have a mortgage
Total Debt cannot exceed $20,000 if you have no mortgage
No late payments or delinquencies for last 2 years
No more than 2 hard inquiries during the last 6 months
Old collections and charge offs should be settled

Annual Fee: Varies with different offers (see review)
Regular APR: 29.99%
Starting Credit Limit: $300 - $1,000

Credit Limit after 6 months: $600 - $2,000

Read our review of the Reflex Mastercard

Surge Mastercard - Up to $2,000 Credit Limit in 6 Months

Who Is this card for? - The Surge Platinum Mastercard is ideal for those with poor credit who want to rebuild their credit with an unsecured credit card without deposit requirements that has a good starting credit limits that will increase over time. It is also ideal for those who have just emerged from bankruptcy and has a clean slate in their credit report.

Why We Like This Card -We like the Surge Mastercard because it allows you to go through a pre-approval process which does not impact your credit score and there are 4 different possible offers you can get ($300, $500, $750 and $1,000 credit limit versions). Your credit limit will also double after 6 months if you pay on time. This card also comes with a mobile app and modern features like autopay and free Vantage scores.

Requirements

Minimum credit score of 570
Total Debt (including mortage) cannot exceed $80,000 if you have a mortgage
Total Debt cannot exceed $20,000 if you have no mortgage
No late payments or delinquencies for last 2 years
No more than 2 hard inquiries during the last 6 months
Old collections and charge offs should be settled

Annual Fee: Varies with different offers (see review)
Regular APR: 29.99%
Starting Credit Limit: $300 - $1,000

Credit Limit after 6 months: $600 - $2,000

Read our review of the Surge Mastercard

Milestone Mastercard $700 Credit Limit Version

Who Is this card for? - The Milestone Mastercard is an unsecured credit card with no deposit that has a good credit limit and is for rebuilders who have a bad credit score of at least 510. It is ideal for those rebuilders who have either just emerged from a bankruptcy or those who have been rebuilding for a while and have some clean tradelines on their credit report. It is also ideal for those who have more or less settled all their past charge offs and collections and have a clean report.

Why We Like This Card - We like this card because the $700 credit limit is decent and allows you to actually use your credit card rather than just put on small recurring bills and charges. Milestone is also very consistent in their credit reporting. They have also just recently introduced a mobile app, which should please existing cardholders.

Requirements - Here are the requirements for approval of this card.

Credit score of 570 to 650 area - while their official minimum FICO score is 510, customer experience suggest at higher score of around 570 has a much better chance of approval
Not more than 2 inquiries during the last 6 months
No late payments or delinquencies for at least 1 year
Collections and charge offs should be settled
Not more than $30,000 in total debt

Annual Fee: $175 for first year, then $49
Monthly Fee: $0 for first year, then $12.50 a month
Regular APR: 35.9%
Starting Credit Limit: $700

Read our review of the Milestone Mastercard

Destiny Mastercard $700 Credit Limit Version

Who Is this card for? - The Destiny Mastercard is an unsecured credit card ideal for rebuilders who have been rebuilding their credit for a while and have a couple of trade lines with consistent payments under their belts. It is also ideal for those who have just emerged from bankruptcy and have a clean credit report.

Why We Like This Card -While most unsecured credit cards that target those with bad credit have a low $300 starting credit limit, Destiny gives you a decent $700 credit line. A $700 credit limit is decent enough where you can use it daily and regularly without maxing out on your card. It has also recently launched their mobile app and this should appeal to those who insist that such features are a must with a credit card. One of their strong feature is that cardholders say they report consistently to the three credit bureaus.

Requirements - Here are the requirements for approval of this card.

Credit score of 570 to 650 area
Not more than 2 inquiries during the last 6 months
No late payments or delinquencies for at least 1 year
Collections and charge offs should be settled
Not more than $30,000 in total debt

Annual Fee: $175 for first year, then $49
Monthly Fee: $0 for first year, then $12.50 a month
Regular APR: 35.9%
Starting Credit Limit: $700

Read our review of the Destiny Mastercard

Fit Mastercard - $800 Credit Limit After 6 Months

Who Is This Card For? - As an unsecured credit card which does not require any deposit, the Fit Mastercard is ideal for those with poor FICO scores in the mid 500 area looking to rebuild their credit with a card that will increase their credit limit. It is also ideal for those want a card with up-to-date features like mobile app, free credit scores etc.

Why We Like This Card? - We like this card because it will double your initial credit limit of $400 to $800 if you pay your first 6 bills on time. It has modern features like mobile app, free credit scores and a track record of credit line increases. This is also one of the cards on our site with very good approval rates.

Requirements - Here are the requirements for approval of this card.

Credit score of 550 area
Checking account required - you should have your a/c and routing number available when you apply
Not more than 2 inquiries during the last 6 months
No late payments or delinquencies for at least 1 year
Collections and charge offs should be settled

Annual Fee - $75 for the first year, then $48 thereafter.
Monthly Maintenance Fee - $0 for the first year, then $6.25 a month (which is $75 annually)
One-time Application Fee - $89
Regular APR - 34.99%
Starting Credit Limit - $400

Read our review of the Fit Mastercard

First Digital Mastercard - Best for No Payment Holds

Who is First Digital Mastercard for? - The First Digital Mastercard is a rare unsecured credit card for poor credit scores that has a cash back program. It is also one of the very rare credit cards that allow you to pay with your debit card rather than directly from your checking account. First Digital also has various payment methods that do not result in payment holds (ie payments clears and is reflected immediately in your credit limit). It is also one of the rare credit card that allow you to pay with all third party digital payment systems like MoneyGram, Western Union and PayNearMe. This card is ideal for those looking for an unsecured credit card with credit scores around the 500 area, but want to either use their debit card to pay their credit card bills or use a third party digital system.

Why we like this card/ - We like First Digital's cash back program, their ability to let you pay with a debit card and all well-known third-party digital payment systems. Paying your bills with certain methods also has no payment holds. This is in contrast with many issuers, which has payment holds for at least a few days. Lastly, they have a 1% cash back program (which will help offset the annual fee) and also a mobile app where you can manage your account.

Requirements - Here are the requirements for approval of this card.

Credit score of 525 to 570
Checking account required - you should have your a/c and routing number available when you apply
Not more than 2 inquiries during the last 6 months
No late payments or delinquencies for at least 1 year
Collections and charge offs should be settled
Not more than $20,000 in debt (excluding mortgage)

Methology: How We Chose Our Recommended Unsecured Credit Cards For Bad Credit

When we choose our recommended unsecured credit cards, we looked at the following factors in making our decision.

Total Fee to Credit Limit Ratio (TFCL) - Unsecured credit cards targeting those with bad credit tend to have higher fees and lower credit limits than regular unsecured credit cards. Many of you are torn between the fees you pay and the credit limit you will get or potentially get and wonder if the card you are applying for is worth it. The Total Fee to Credit Limit Ratio (TFCL) is a measure we at askmrcreditcard.com use for subprime credit cards. By taking the total fee during a year and dividing it by the credit limit, we can measure how much of fees you are paying as a percentage of the credit limit you are getting.

Credit Limit and Track Record of Credit Limt Increases - Many unsecured credit cards offer a small credit limit of only $300 to their cardholders. On the higher end, some issuers offer limits of $500, 750 and even $1,000. We prefer cards that offer a credit limit of at least $700 to their cardholders. We also prefer credit cards that have a track record of increasing your credit limit over time.

Payment Methods, Holds and Processing Time - Many subprime credit card issuers have longer than usual processing time when after they receive your payments for the credit card bill. And many also have payment holds whereby your payments are processed but it will take more than a few days for your payments to be reflected in your credit limit. This is something we at closely and only recommend cards that have no payment holds or very short payment holds of just a couple of days.

Some subprime credit card issuers also have limited ways in which you can pay your credit card bills. We prefer issuers who allow you to pay your credit card bills with a variety of ways including check and money orders by snail mail, ACH transfers, your bank's bill pay, payment from mobile app and even payment using a debit card. The ability to set up autopay is also a very important consideration.

Mobile App, Free Credit Scores and other Considerations - Not too long ago, many subprime credit card issuers had no mobile apps or even if the did, it was very rudimentary. And while free credit score offerings were more common in mainstream issuers, "bad credit" card issuers were slowly to offer these. Things have changed and many now have these features as standard. Still, these are things we take into consideration when choosing our recommended cards.

Approval Requirements: Can You Get An Unsecured Credit Card with 500 Credit Score? Answer is YES

First, let's define what is considered bad credit as considered by the two main credit scoring models FICO and Vantagescore. FICO defines bad credit as having a score between 300 and 579. Vantage score defines bad credit (subprime) as having a VantageScore of between 300 and 600. In fact, scores from 499 and below are considered very poor by Vantage score. The good thing about unsecured bad credit cards is that some issuers allow you to go through a pre-approval or pre-qualification process whereby you will only face a soft inquiry with no impact on your credit score. If you are pre-approved for any of these cards, you will be shown an offer with the fees and rates and then can decide whether to go ahead with the formal application process.

Credit Scores Needed - Most unsecured credit cards require a FICO score of at least low to mid 500 and a Vantage Score of around 550. But credit scores aren't the only things issers look at.

Settle Charge Offs and Collections - Unsettled charge-offs and collections on your credit report are big reason why you will get denied for an unsecured credit card. Either settle your them or agree to a payment plan.

A period of on-time payments on ALL tradelines - To stand a chance of getting approved for an unsecured credit when you have bad credit, you will need to have a period of at least 6 months to a year of on-time payments and having no deliquencies on all your credit accounts.

Income Requirements - While most unsecured credit card issuers for people with bad credit do not explicityly state any income requirement, most people who have got approved having at least average incomes of around $50,000. Some issuers may allow you to get away with income of $25,000, but that is very rare. You should be honest when you fill in your income in the application form because many issuers use third party services to try to verify your income.

Most require checking account - Almost all unsecured bad credit card issuers request you to have a checking account and they will explicityly ask if you have one in the application form. I think the reason why is that issuers do not want to approve people who have bank overdraft issues and have been blacklisted by the chexsystem.

What You Get Realistically Expect To Be Approved

Depending on your score, and perhaps your income and whether you have had no late payments for a certain period of time (like say a year and a half), you may be approved for unsecured cards with different characteristics. The table below summarizes what type of unsecured card you can realistically expect to get based on your credit scores.

Score Range	Expected Features	Example Cards
>Above 580 and above	No or Low Annual Fee No Monthly Maintenance Fee No One-Time Application Fee	Reflex Mastercard ($700 &$1,000 limit version) Surge Mastercard ($700 &$1,000 limit version)
525 to 580	Annual Fee Monthly Maintenance Fee May include one-time application fee	Reflex Mastercard ($300 & $500 limit verseion) Milestone Mastercard Destiny Mastercard First Digital Mastercard
300-525	Online Store Cards No credit checks Can only be used at online stores	Buy On Trust Net First Platinum Freedom Gold Card

What Is An Unsecured Credit Card?

An unsecured credit card is the most common type of credit card whereby you will be approved and given a credit limit based on your credit score, income and some other factors. While most unsecured credit cards have no annual fee, those targeting people with bad credit tend to charge a variety of fees. They include annual fees, monthly fees and program fees.

How are Unsecured Credit Cards for Bad Credit Different from Secured Credit Cards and Regular Unsecured Credit Cards?

Unsecured credit cards are different from from both regular unsecured card and secured credit cards. We are going to explain how they are different so you can better understanding what you will be getting.

Unsecured Credit Cards For Bad Credit vs Regular Unsecured Credit Cards

Most unsecured credit cards for prime consumers have no annual fee and often have reward programs. Teasing 0% APR deals for purchases and balance transfers are also common.

In contrast unsecured credit cards specifically for bad credit applicants have higher fees and much lower credit limits. Rewards programs are rare and 0% APR teaser deals are unheard off. Let's look into the differences in greater detail.

Fees - Annual Fee, Monthly Fee and Processing Fee - Unsecured credit cards for bad credit have more fees packaged together. For example, some cards charge an annual fee, a monthly fee and also a one-time processing fee. Some unsecured bad credit cards will just charge an annual fee and monthly fee. The better ones will just charge an annual fee only but then, the credit limit you get on bad credit card are much lower than a regular prime unsecured credit card.

Lower Credit Limits - Many unsecured credit credit cards start you off with only a $300 credit limit. The better ones have limits ranging from $500, $700 up to $1,500. Credit limit increases also vary with various issuers. Some do not give credit increases at all while others may tie credit limit increases to a number of on-time payments.

Rewards and Teaser Deals - While regular unsecured credit cards fight tooth and nail to get new customers with sign-up bonuses, 0% APR teaser deals, unsecured credit cards targeting those with poor credit do not promote their cards this way. Some may have rudimentary 1% cash back programs but most do not allow balance transfer and or have any 0% APR teaser deals.

Limited Mastercard or Visa Benefits - Most credit cards are either use Visa or Mastercard as the network and they both offer a wide variety of benefits like purchases protection and warranty etc. However, for subprime unsecured credit cards, the set of Visa or Mastercard benefits you get a much more limited. One of the more useful benefits that regular cardholders will get is the Auto Rental Collision Damage Waiver Insurance where you can let you credit card take care of the rental insurance rather than pay the car rental company insurance fees. This benefit is notably absent in most unsecured credit cards for poor credit. That means holders have to pay the added car rental insurances fee to the car rental they use.

Difference between Unsecured Credit Cards for Poor Credit versus Secured Credit Cards

The key difference an unsecured credit card for bad credit and a secured credit card is that you have to put down a security deposit if you get a secured card. The security deposit becomes your credit limit and acts as a collateral in case you default on your payments. Though some secured credit cards charge an annual fee, there are many that have no annual fees.

The second key difference is that because many secured credit cards do not charge any annual fee, you will save a lot on fees with it. In contrast, unsecured credit cards for poor credit tend to have higher fees (including annual fee and monthly fees).

FinePrints of Unsecured Credit Card When You Have Bad Credit

When you get approved for an unsecured credit card when you have bad credit, we need to manage your expectations with regards to certain features that will not be found in prime unsecured credit cards.

Payment Holds - While almost all credit cards from mainstream credit card issuers process your payments very quickly and often reflect that in your credit limits, in the bad credit world, credit cards tend to take a couple of days longer to process your payments. Even after it is process, it may take a couple of days for it to be reflected in your credit limit. That is why it is important to watch your credit utilization ratio when you are using your unsecured credit card so that you will always have ample credit limits for your purchases.

No Auto Collision Damage Waiver Insurance - Most bad credit unsecured credit cards do not have the auto collision damage waiver insurance even though Mastercard and Visa offer these in most of their credit cards. That means that if you rent a car, you should take up the rental companies insurance and pay the insurance premium.
Mobile App Not as Slick - Because subprime issuers tend to be much smaller than mainstream issuers, their mobile apps are usually not as slick and not as frequently updated. So don't expect it to be like an Amex or Chase.

FREQUENTLY ASKED QUESTIONS

How many unsecured credit cards do I need to rebuild my credit?

Most experienced rebuilders claim you need at least 5 tradelines to effectively rebuilder your credit in the fastest possible time. These might include auto loans, students and obviously credit cards. How many unsecured credit cards you need depends on your existing credit mix.

How fast can you get approved for an unsecured credit card?

If you meet the credit card issuers criteria and requirements, you will get approved almost immediately. If not, you may get the 7 day pending message if they need more information like pay stubs or ID for identity verfication.

Do unsecured credit cards report to all three major credit bureaus?

Most do, but some do not. And the ones that do not tend to be (though not all are like that) online merchandise credit cards that only allow you to shop at their online stores.

Will secured credit cards graduate to unsecured credit cards?

Some like Discover and Citi do. But some have had no success with graduation even with these cards.

Why do some unsecured credit card issuers ask if you have a checking account in their application form?

Many unsecured credit card issuers requirement you to have a checking account. They do not want applications who have a history of bank overdrafts and have a bad chex report.