According to Experian’s 2019 Consumer Credit Review, nearly 16% of Americans have very poor credit, or a FICO score between 300 and 579. The same report states that another 18% have fair credit, which is a score between 580 and 669. Only 1.2% of Americans have a perfect score of 850. The bottom line here is that if your credit score is less than stellar, you are not in the minority [1].

Perfectly responsible people can run into the kind of life turbulence that puts them into deep debt without the means to keep up with bills. If you have fallen on hard times more than once in your life, and it has significantly affected your FICO score, you need not count yourself out of getting more credit. And there is no reason to forgo a credit card for the rest of your days.

It is extremely hard to live in the modern world without a credit card. There are the perks: reward points and cash back are among them. Fraud and purchase protection and the ability to pay for emergent expenses are some of the more practical reasons to have a credit card [2].

If you have bad credit, you still have credit card options [3]. Many of these cards offer some of the same benefits as normal cards, and they provide you an easy means of repairing your credit and pushing up your FICO score.

Here are some of the best credit card offers for people with poor FICO scores [4]:

1. Capital One Secured Mastercard

This card has no annual or foreign transaction fees. You do, however, have to put down a $49 deposit, and the starting limit is only $200. If you transfer more money to the card, your limit will be increased. Once you have reached 5 months, and you have paid all your credit card bills on time, your limit will be increased without the need for additional deposits. You will also get the benefit of a bump in your credit score.

One caveat: if your monthly income is less than your housing payment, you will not be eligible for this card.

2. Credit One Bank Platinum Visa

Although there is a $95 first year annual fee on this card, and you will only get $300 in credit, there are advantages to applying for it. Perhaps the best benefit is the 1% cash back on each purchase you make. You can also withdraw cash using this card.

3. Indigo Mastercard

No initial security deposit is required for this card. The starting limit is usually $300. You can find out if you qualify for the card without it impacting your FICO score.

4. OpenSky Secured Visa

This is another credit card for those who would rather not go through a credit check. Another advantage of this card is that it does not require you to have a normal bank account. If you are someone who receives wages, salary, or invoice payments into PayPal or a similar independent vendor, then this card may be your best option.

You can pay down your debt on the card through money order, wire transfer, debit card, or other direct transfer method. The annual fee is $35. However, the interest rates for the card are high. And there is no path to an unsecured card with higher credit limits.

5. Discover It Secured

This card has an introductory APR of 10.99% for the first six months. As a bonus, you will get 2% cash back on the first $1,000 per quarter and 1% on purchases thereafter. If you make your payments on time during the first 8 months, you will be eligible for an upgrade to an unsecured card.

6. DCU Visa Platinum

This card has no annual fees, and a relatively low interest rate of 13.75%. To qualify for the card, you must be a member of the Digital Federal Credit Union. And you will only get as much credit as the amount of money you put on the card. Using this card is an inexpensive way of rebuilding your credit score.

To Conclude

There is no doubt about it. Bad credit greatly affects not only your financial power, but your entire life. A low FICO score can prevent you from renting the accommodation you prefer, it can drive up your insurance costs, and even keep you out of certain lines of work [5].

A bad experience with credit cards can put many people off using them again. However, even if you have managed to pay down past credit card debt, you should make an effort to improve your FICO score. Doing so will reduce the amount of money you must put down on rather mundane things such as a utility deposit. It will also ensure that your career and housing options are wide open.

Applying for one of the credit cards listed and described above is the easiest and fastest way to repair your FICO score.

Sources

1. https://www.badcredit.org/how-to/how-many-americans-have-bad-credit/

2. https://www.investopedia.com/articles/pf/10/credit-card-debit-card.asp

3. https://us.cnn.com/2021/06/17/cnn-underscored/credit-cards-for-bad-credit/index.html

4. https://www.nerdwallet.com/best/credit-cards/bad-credit

5. https://www.investopedia.com/the-side-effects-of-bad-credit-476978