Bad credit

Can you get an unsecured credit card with bad credit?

Woman victim of credit card fraud
It’s possible to get an unsecured credit card with a below average credit score, but read the fine print first.

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If you have bad credit, you probably already know how difficult it can be to qualify for an unsecured credit card. Generally, the lower your credit score, the lower your chances of getting approved and getting lower interest rates.

Still, it’s possible to get an unsecured credit card with a below-average credit score, but read the fine print before applying. While many cards are good options to consider adding to your wallet, others come with a long list of fees and limitations that may not be worth it.

You can increase your chances of getting an unsecured credit card if you tackle your bad credit history first. Credit repair experts can help you get started.

Can I get an unsecured credit card with bad credit?

Generally, you will need a credit score between good and excellent (670-850) to be approved for an unsecured credit card. Some card issuers offer credit cards aimed at consumers with below-average incomes or fair credit (580-669). The higher your credit score, the more likely you are to qualify for a credit card, so the closer you get to a credit score of 670 (or higher), the better.

Remember: credit card companies don’t limit themselves to your credit score when reviewing your application. Typically, applicants who qualify for unsecured credit cards tend to have a steady income and a credit report that doesn’t show missed payments, collections, bankruptcies, or other negative marks.

What is an unsecured credit card?

Before you apply for an unsecured credit card, it helps to know exactly what you’ll be getting.

An unsecured credit card is a card that does not require you to provide security, such as a security deposit, in order to be approved. Unsecured credit cards give you a line of credit that you can use to make purchases, complete balance transfers and cash advances. As the cardholder, you are responsible for paying off your account balance by making at least the minimum payment by the due date each month.

After verifying your income, credit scoreand other personal information, card issuers determine your eligibility and credit limit based on how likely you are to make regular, on-time payments against your credit card balance.

Contrary to secure credit cards, unsecured credit cards are not secured by a deposit, so your card issuer does not have access to the funds if the account balance is not paid. This is why card issuers consider many factors to limit their level of risk before approving a credit card application.

Put yourself in the best possible position to get a card by making sure your credit is in top shape. You can start repairing your credit now. Several credit repair companies can also help you.

What are the pros and cons of unsecured credit cards?

Used responsibly, unsecured credit cards can be a valuable tool for building credit and earning rewards. On the other hand, irresponsible use of these cards can lead to increased debt and interest charges. Before applying for an unsecured credit card, consider the pros and cons:

Advantages of unsecured credit cards

  • No security deposit requirement: Unlike secured credit cards, which require a security deposit ranging from $200 to $3,000, unsecured credit cards do not require a deposit.
  • Lower interest rates: Unsecured credit cards generally come with lower interest rates than secured credit cards, although the latter have access to a deposit to help mitigate card issuer risk.
  • Rewards potential: You may qualify for a credit card offer cash backpoints or miles.
  • Low (or no) fees: If you’re considering different credit card offers, pay close attention to fees. Some come with no annual or transaction fees.

Disadvantages of unsecured credit cards

  • Approval is more difficult: Getting approved for an unsecured credit card is difficult without a good credit score and credit history, among other criteria.
  • Easy overtaking: With an unsecured credit card, you may have access to a higher credit limit than you can afford to pay in full each month. As a general rule, only spend what you can afford to repay by the due date. Otherwise, interest will begin to accrue, making it harder to pay your bill.

Should I get an unsecured credit card if I have bad credit?

Although you may qualify for an unsecured credit card, it may not be a good idea, especially if it comes with high interest rates and fees. Even with good credit, credit cards are an expensive way to borrow money, with generally higher interest rates than a personal loan and other borrowing methods. Additionally, some cards that target people with bad credit charge a lot of fees to their credit cards, which can offset any perks you might receive.

If you’re applying for your first credit card, expect your credit limit to vary between $100 and $1,000, depending on your credit. It may not be worth applying for a credit card with a low credit limit if a long list of fees comes with it.

On the other hand, if you can build credit or earn rewards and manage your credit responsibly, it might be a good idea to get an unsecured credit card. Try to work with well-known credit card companies that offer reasonable rates and low fees before applying for an unsecured credit card.

And if you have bad credit (or little credit history), be sure to position yourself for the best rates and terms by improving your credit score. You can start working on your credit now.