You might think your credit card options are very limited if your credit score is below 500, but that’s not the case. Although some credit cards are out of reach at this time, there are plenty of secure and unsecured options for bad credit.
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As you build your credit and use credit cards responsibly, you may gain access to cards with better benefits and lower APRs. The the credit cards on this list can put you on the right track. Some may even come with rewards, so you won’t have to wait to start enjoying your credit card benefits.
Secured credit cards
Secured credit cards require you to put down a cash deposit and then extend a line of credit, usually equal to the amount you deposit. If your credit score is below 500, your chances of approval may be higher for this type of card.
Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Credit Card extends a $200 line of credit with a deposit as low as $49. You may also qualify for line of credit increases as your credit improves. Additionally, the deposit is refundable if you close the card or switch to an unsecured card.
Finally, this card has no annual fee. A disadvantage of this card is that it does not bring rewards.
Capital One Quicksilver Secure Rewards Credit Card
This card is a good choice if you want a secure Capital One card that offers cash rewards. There is no annual fee and you can earn 1.5% unlimited cash back. It has a minimum deposit of $200, but you may qualify for a line of credit increase after six months. The deposit on this card is also refundable and you can later switch to the unsecured Quicksilver Rewards card.
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Discover it® Secure credit card
The Discover It Secured Credit Card has a minimum deposit of $200, significantly more than the Capital One Platinum Secured Card. However, the Discover card earns 2% cash back at gas stations and restaurants on purchases up to $1,000 per quarter. The $200 amount is pretty standard for most secured credit cards.
The Discover It earns 1% cash back on all other purchases. Another perk is that Discover automatically matches all cash back dollar-for-dollar at the end of your first year.
Secure Visa for Credit Builder Chime® Credit card
Technically, the Chime Credit Builder Secured Visa works more like a prepaid Visa than your typical secured credit card. With this card, you open a Chime account and transfer money from that account to it, then use your card to spend. Chime reports to all three credit bureaus to help you improve your credit.
You can also adjust your credit limit. Additionally, the card does not require credit verification to open. However, the Chime card does not bring rewards.
Unsecured credit cards
Unsecured credit cards are what may come to mind when you think of credit cards. They give you a line of credit that does not require a deposit. However, they may have higher APRs or fees than secured cards, especially if your credit score is below 500.
Visa Mission Lane® Credit card
The Mission Lane Visa is an unsecured credit card that allows you to qualify with bad credit or no credit. Because it is unsecured, it does not require a security deposit. The starting credit limit is only $300, although it gives you the option to increase it. It has an annual fee of up to $59, depending on your offer.
FIT Mastercard® Credit card
The FIT Mastercard is an unsecured credit card that you may qualify for with limited or no credit. The limit for this card is just over $400, but it comes with several fees, including annual fees and monthly fees. It also has a purchase APR of 29.99%, which is high even for a bad credit unsecured card.
On the plus side, you can increase your credit limit to $800 by making your first six monthly payments on time.
Petal® 1 visa® Credit card
The Petal 1 visa has no annual fee and you can qualify with limited or no credit. Credit limits start at $300 but can go up to $5,000 for this card. One way to achieve a higher credit limit is to make payments on time for the first six months.
The Petal 1 also earns 2% to 10% cash back at select merchants. It has a variable APR of 22.99% to 32.49% for purchases – the upper limit is high, especially if you have a balance.
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This article originally appeared on GOBankingRates.com: 7 Best Credit Cards For People With A Credit Score Under 500
