Best Unsecured Credit Cards for Bad Credit in November 2024

Unsecured credit cards don’t require the payment of a security deposit, but they do have other costs. Because of the higher risk associated with borrowers who have bad credit, most of these cards will have a higher interest rate and higher annual fees compared to cards marketed towards those with higher credit scores. However, if you have a fair credit score (typically ranging from 580 to 669) or no credit history at all, you may have a wider range of credit cards available to you, with more favorable terms, such as lower interest rates and lower fees.

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Best unsecured credit cards compared

Methodology

To find the best unsecured credit cards for people with bad credit, we looked through all of the credit cards of this type on the market. A review of the top cards was then conducted by one of the nation’s leading credit card experts with more than 15 years of experience. After review, the top cards for each category were selected.

How to select the best unsecured credit card for bad credit

When selecting the best unsecured credit card for bad credit, it's important to consider a few key factors.

Is this card for people with bad credit?

Make sure the card is specifically designed for individuals whose credit matches yours. If your credit is considered bad, a card for people with fair or no credit may not work for you.

What is the card’s standard interest rate?

Pay attention to the card's standard interest rate. This can significantly impact your finances if you need to carry a balance. Look for a card with a reasonable interest rate, keeping in mind that qualifying for a low interest rate may be a challenge if your credit score is low.

What are the fees associated with the card?

Likewise, carefully examine the card's fees, including annual, application, foreign transaction, additional cardholder, and balance transfer fees. You may be unable to avoid all these fees, but the fewer fees there are, the better.

What are my priorities?

Consider your priorities and preferences. Whether you're seeking a card for travel, cash-back rewards, or simply aiming for the lowest possible annual fee, aligning the card's features with your financial needs and goals is essential.

How to apply for an unsecured credit card

To apply for an unsecured credit card for bad credit, follow these steps:

Check your credit score

Check your credit score to determine whether you meet the minimum eligibility criteria for an unsecured credit card designed for those with bad credit.

Research suitable cards

Look for unsecured credit cards specifically tailored for individuals with bad credit. Compare credit score requirements, features, and fees to find a card that best fits your financial situation.

Gather necessary documents

Collect the necessary documents—including ID, proof of income, and alternative data, if permitted—based on the credit card issuer's requirements.

Complete the application

Visit the website of the chosen credit card issuer or apply through other designated channels. Complete the application form with accurate personal and financial information.

Wait for approval

After submitting your application, wait for the credit card issuer to review your application. Approval timelines vary, but some issuers provide instant approval decisions.

Understand the terms

If approved, carefully review the terms and conditions of the credit card, including the interest rate, fees, and credit limit. Make sure they match the terms you originally expected.

Activate and use the card responsibly

Once you receive the card, activate it as per the issuer's instructions and use it responsibly to improve your credit score over time.

More about unsecured credit cards

It’s important to understand what an unsecured credit card is and what it isn’t, as well as what it takes to qualify before you make the effort to secure one.

What is an unsecured credit card?

An unsecured credit card is a type of credit card that does not require you to provide a security deposit to open or maintain the account. Unsecured credit cards are issued based on your creditworthiness and financial history. They typically have higher interest rates and fees for individuals with bad credit, but they offer the convenience of not having to tie up funds in a security deposit and can help you build or rebuild your credit when used responsibly.

Types of unsecured credit cards

Unsecured credit cards can come in various types to cater to different financial needs and credit profiles. Some common types of unsecured credit cards include:

Standard unsecured credit card

These traditional credit cards do not require a security deposit and are issued based on your creditworthiness. The higher your credit rating, the lower the interest rate, and vice versa.

Unsecured credit card for bad xredit

Unsecured credit cards designed for those with bad credit include traditional credit cards with higher interest rates, annual fees, and penalties, as well as cards that utilize alternative credit data such as rent payments, spending patterns—even social network data—to determine creditworthiness.

Student credit cards

Designed for college students or individuals with limited credit history, student credit cards are unsecured cards that often come with lower credit limits and may offer incentives tailored to student needs, such as rewards for good grades or credit education resources.

Retail store credit cards

These unsecured credit cards are issued by specific retail stores and can only be used for purchases at the issuing retailer. They often come with special discounts, rewards, or financing options for store purchases.

Low-Interest or 0% Intro APR credit cards

Some unsecured credit cards offer low ongoing interest rates or introductory 0% APR periods on purchases or balance transfers, making them suitable for individuals looking to save on interest costs.

Rewards credit cards

These unsecured cards offer rewards programs, such as cash back, travel rewards, or points for purchases, providing cardholders with benefits for using the card for everyday spending.

Pros & cons of unsecured credit cards for bad credit

When considering credit cards for people with bad credit, there are several pros and cons to remember.

Unsecured vs secured credit card

Secured and unsecured credit cards differ in how they are backed and who can qualify for them.

Secured credit cards require a security deposit, which serves as collateral and determines the credit limit. These cards are usually available to individuals with poor or no credit history. On the other hand, unsecured credit cards do not require a security deposit but are typically designed for individuals with fair to excellent credit scores.

Unsecured cards rely solely on the borrower's promise to pay, and the credit limit is based on the cardholder's creditworthiness. Secured credit cards often have lower fees and interest rates than unsecured cards, as they pose less risk to the issuer.

An unsecured credit card might make more sense than a secured credit card when you have bad credit but want to build or rebuild your credit history without tying up a significant amount of funds in a security deposit. Additionally, if you are looking for a credit card with rewards, perks, and lower annual fees, an unsecured credit card might be a more attractive option than a secured card.

TIME Stamp: Apply for an unsecured credit card to build or rebuild your credit score

If your credit score is bad, your primary goal should be to improve it. The best way to raise your credit score is by responsible use of an unsecured credit card. If you can qualify for an unsecured card, you will likely face higher interest rates, fees, and potential penalties than someone with a higher score. Provided you use the card responsibly, these “costs of bad credit” will do little harm and will eventually help qualify you for lower rates and fees, and better rewards because the issuer will want to keep you as a customer.

Frequently asked questions (FAQs)

Can I get an unsecured credit card with a 500 credit score?

Yes, there are several unsecured credit cards that are offered to those with credit scores of 500 or less.

What is an unsecured credit card for bad credit?

These are cards thatare designed for people with bad credit. While many credit cards for those with bad credit, most require the payment of a refundable security deposit. Unsecured cards for people with bad credit may not charge a refundable security deposit, however many have significant annual fees.

Are secured or unsecured credit cards best for rebuilding credit?

Both types of credit cards can help you to rebuild your credit, so long as you use them responsibly. This means paying your bills on-time and carrying very little, if any debt. The difference is that secured credit cards require the payment of a refundable security deposit before your account can be opened, and are less likely to charge an annual fee.

Can a secured credit card become unsecured?

Yes. Some secured credit cards will offer cardholders a refund of their deposit after consistently making their payments on-time, and avoiding debt.

Can you get a credit card after bankruptcy?

Yes. You will have to qualify for a credit card designed for people with bad credit, like the ones mentioned in this article.

How can I get approved for a credit card with bad credit?

It’s important to only apply for credit cards that are designed for applicants with bad credit. While these cards may require a security deposit, or charge a significant annual fee, you can still be approved.

Can I prequalify for credit cards with bad credit?

Some credit cards for people with bad credit offer a prequalification process, which is sometimes called pre-approval. You can typically prequalify for a credit card without it having any effect on your credit.