Finance

Best Credit Cards for Low Credit Score

January 16, 2024

A low credit score can make it difficult to get approved for top-tier credit cards. However, there are still several good options available if you have less-than-perfect credit. Choosing the right card and using it responsibly can help rebuild your score over time.

What is Considered a Low Credit Score?

Your credit score falls on a range between 300 and 850. In general:

Scores below 580 are considered very poor
Scores of 580-669 are deemed fair or average
670-739 are good credit scores
Scores of 740 or above are excellent

If your credit score is in the fair or average ranges (low), you will likely need to apply for credit cards aimed specifically at people working to improve their financial profile.

Top Credit Card for Low Credit Score

Secured Cards

Capital One Secured Mastercard – No annual fee, minimum $49 deposit, can graduate to unsecured card
Discover it Secured Card – Cash back rewards, no annual fee, $200 minimum deposit
Citi Secured Mastercard – No annual fee, $200 to $2,500 deposit

Unsecured Cards for Average Scores

Capital One Platinum Credit Card – No annual fee, no security deposit
Petal 2 “Cash Back” Visa Card – No fees, cash back rewards, relaxed approval
Bank of America Customized Cash Rewards – No annual fee, customize rewards categories

Other Options

Secured Loans – Build credit by taking out small fixed loans and repaying on-time
Credit Builder Loans – Function like secured cards but structured as small loans instead
Become an authorized user – Ask to be added as a user on an existing account in good standing

The key is to make payments by the due date, keep utilization low, and let positive history accumulate. Avoid cards with high fees or that target people with bad credit. Building over time through responsible habits is critical.

Top Secured Credit Cards

Here are some of the best secured card options to consider if your credit score is under 600.

Capital One Secured Mastercard

No annual fee
Minimum $49 deposit for a $200 credit limit
All deposits are fully refundable with responsible use
Receive credit line increases with on-time payments

Discover it® Secured Card

No annual fee
Competitive rewards program
Deposit at least $200 to activate card
Monthly free FICO score tracking

Citi Secured Mastercard

No annual fee
Deposit between $200 and $2500
Low security deposit may be available after making the first 5 monthly payments on time

Top Credit Cards for Average Credit Score

If your credit score falls in the average range (580-669), you should qualify for an unsecured card with reasonable rates and terms. Here are some top options:

Capital One Platinum Credit Card

No annual fee
Potential graduate to an unsecured card after making 5 on-time monthly payments
Receive a higher credit line after making your first 5 payments on time

Petal 2 “Cash Back, No Fees” Visa Card

No annual fee or over limit fees
Earn cash back on eligible purchases
Relaxed approval requirements with no penalty APR
Free on-time payment alerts through the mobile app

Bank of America Customized Cash Rewards

No annual fee
Qualify for a rewards program with competitive earning structure
Request a credit line increase after first 6 months of responsible use

Tips for Improving Your Credit Score

Rebuilding credit takes effort and patience, but you can recover from past mistakes. Here are some proven strategies:

Review Credit Reports

Carefully check your credit reports from Equifax, Experian and TransUnion for any inaccuracies that may be negatively impacting your score. Dispute errors promptly with an explanatory letter. Paying down debts incorrectly recorded as open or past due can also help.

Pay Down Balances

High credit utilization—when you use a large portion of your total limit—hurts scores. Try to keep balances below 30% of the limit on each card. Pay more than the minimum when possible to lower balances quicker.

Become an Authorized User

Ask a family member with good credit to add you as an authorized user on a credit card they manage responsibly. Avoid piggybacking on cards with high balances or missed payments.

Limit New Credit Applications

Each application triggers a hard inquiry on your report, which can ding scores temporarily. Wait at least six months between applying for new credit while rebuilding.

Automate Payments and Alerts

Set up automatic monthly payments from your checking account to avoid missed deadlines. Also set up customized alerts to warn about upcoming dues dates or when balances exceed thresholds you define.

Give It Time

Score recovery takes diligence across months and years. With an open mindset to change financial behaviors and dedicated effort, you can have both good credit and a brighter financial outlook long-term.

Using Your Card Responsibly

Whichever card you qualify for with lower credit, be sure to practice good financial habits that demonstrate you can handle credit wisely over time. Strategies include:

Make at least the minimum payment every month before the due date
Keep credit card balances low compared to the overall limit
Set up automatic payments to avoid missed deadlines
Review statements regularly and report any errors promptly
Use the card lightly at first, such as for gas or groceries

Building a positive history through a starter card for bad credit is key to boosting your score so more options become available. Check your credit reports frequently through AnnualCreditReport.com and monitor score changes via a free site like Credit Karma.

With consistent good money management behaviors, you can rebuild and reach your financial goals.

Conclusion

A low credit score doesn’t mean you are unable to access credit forever. Responsible use of secured credit cards or other products aimed specifically at borrowers with less-than-ideal financial profiles can help build your credit history back up over time.

Avoid cards with high fees and monitor your accounts closely. With a diligent effort and some patience, you can earn your way back up the credit score tiers.

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