Unsecured credit cards for bad credit can be the next step for those who have been rebuilding for a while with secured credit cards and or even as a starter rebuilder credit card for those who choose not to go the secured credit card route.
While secured credit cards have lower annual fee (and many have no annual fee), they require a secured deposit which sets you credit limit but will only be returned to you when you close out the card. In contrast, unsecured credit cards do not require any collateral or security deposit and many will give you higher limits than any collateral you can afford.
AskMrCreditCard.com has compared every unsecured credit card targeting those with poor credit and curated our recommendations.
While secured credit cards have lower annual fee (and many have no annual fee), they require a secured deposit which sets you credit limit but will only be returned to you when you close out the card. In contrast, unsecured credit cards do not require any collateral or security deposit and many will give you higher limits than any collateral you can afford.
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® Platinum Mastercard® | $300 - $1,000 | Credit Limit Doubles After 6 Months of on-time payments |
| Surge® Platinum Mastercard® | $300 - $1,000 | Credit Limit Doubles After 6 Months of on-time payments |
| FitTM Platinum 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 |
We have divided our recommendations into three groups based on the credit score required. The first group of unsecured credit cards are for those with at least 570 or 580 credit scores. These cards tend to have more generous limits and only charge an annual fee (no monthly fee or processing fee). They also tend to have a better track record of increasing your credit limits as soon as 6-7 months if you pay your bills on time during this period.
The second group of recommended cards are for those with scores from 525 to 570 area. These cards come with both an annual fee and monthly fee as issuers have to be compensated for issuing card to those of you in this score range.
The third group is for those who have 500 credit scores or below and these cards do not perform any credit checks. Instead, they will criteria like having a certain monthly income or having a debit card as conditions for giving approval.
Best Unsecured Credit Cards for credit score 570-580 and Above
Updated On 27 October 2023
Who Is this card for? - Reflex Mastercard is for those who have credit scores in the 550-650 range and would like to have quick credit line increases from their card. 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 "bad 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
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
Who Is this card for? - The Surge Platinum Mastercard is suitable for a wide range of rebuilders. It accepts those who have emerged from bankruptcy or those who have been rebuilding their credit for a while and are looking for an unsecured credit with a good starting credit limit that will increase over time.
Why We Like This Card -We like this card 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
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
Who Is this card for? - The Milestone Mastercard 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 a Netflix charge. 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
- 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
Who Is this card for? - The Destiny Mastercard is 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
Best for 520 - 570 Credit Score
Who Is This Card For? - The Fit Mastercard is for rebuilders who want an unsecured credit card that will give credit limit increases, will accept credit scores in the mid 500 FICO score area and will accept the fees that come with this card.
Why We Like This Card? - We like this card because 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
Who is First Digital Mastercard for? - The First Digital Mastercard.
Why we like this card/ - One of the key reasons we like Revvi is because it has one of the highest approval rates for applicants from our site. If you are a rebuilder looking for an unsecured credit card rather than a secured card and you meet the criteria, then you should definitely consider this card.
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)
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%
Read our review of the First Digital Mastercard
What You Get Realistically Expect To Be Approved
| Score Range | Expected Features | Example Cards |
|---|---|---|
| >Above 580 and above |
|
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| 525 to 580 |
|
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| 300-525 |
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How are Unsecured Credit Cards for Bad Credit Different from Secured Credit Cards and Regular Unsecured Credit Cards?
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).
How We Chose Our Recommended Unsecured Credit Cards For Bad Credit
- 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 Limit 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.
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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
- 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.
FinePrints of Unsecured Credit Card When You Have Bad Credit
- 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.
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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.
Alternatives to Unsecured Credit Cards
1. Secured Credit Card as Unsecured Alternative - Secured credit cards have much less fees than a typical unsecured credit card that is for those with bad credit. In fact, there are now few secured credit cards for bad credit that have no annual fee and do not perform any hard inquires at all. That means you will not be denied but be definitely approved. An excellent example and a highly recommended card is the Opensky Plus Visa.
2. Credit Builder Loans - Instead of getting a high fee unsecured credit card, you instead get a credit builder loan in your rebuilding efforts. A good credit builder loan to get is the Self Credit Builder Loan.
3. Debit Cards That Build Credit - If you are afraid of getting into debt again and want to get a much higher credit limit than a typical unsecured credit card for bad credit offers, you can get a debit card that reports to credit bureaus. A great example is the Extra Debit Card. Instead of relying on credit reports and scores to approve you, Extra uses the activity in your bank account to give you a credit limit and reports to Equifax and Experian.
[openfaqsection] [label]How many unsecured credit cards do I need to rebuild my credit?[/label] 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.
[label]How fast can you get approved for an unsecured credit card?[/label] 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.
[label]Do unsecured credit cards report to all three major credit bureaus?[/label] 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.
[label]Will secured credit cards graduate to unsecured credit cards?[/label] Some like Discover and Citi do. But some have had no success with graduation even with these cards.
[label]Why do some unsecured credit card issuers ask if you have a checking account in their application form?[/label] 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.
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[label]How fast can you get approved for an unsecured credit card?[/label] 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.
[label]Do unsecured credit cards report to all three major credit bureaus?[/label] 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.
[label]Will secured credit cards graduate to unsecured credit cards?[/label] Some like Discover and Citi do. But some have had no success with graduation even with these cards.
[label]Why do some unsecured credit card issuers ask if you have a checking account in their application form?[/label] 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.
[/openfaqsection]