Once your credit score slips into the poor or bad credit category — below 650 — consider getting a credit card that’s designed to help you rebuild your credit. Sometimes, this means you’ll have to get a secured card. With these cards, you deposit an amount of money in a bank account and this “secures” the card.
Let’s face it. You might qualify for a credit card, but you could get stuck with a 24 percent (V) APR (or much higher). Sometimes, it’s best to spend some time focusing on fixing your credit. Once your score climbs, your options — and APRs — will only get better.
Here are some examples of good credit cards for rebuilding credit:
OPEN SKY Secured Visa® Credit Card. The Open Sky Secured Visa card reports to all three major credit bureaus. So here’s the plan: If you use this card, pay off your balance in full every month. And pay it on time. No exceptions! The issuer is Public Savings Bank. There’s a $50 annual fee, but that’s your only upfront cost. This card doesn’t have a monthly maintenance fee or a processing fee, like many secured cards do. You’ll get a 14.25 (V) APR on purchases. Credit limits are from $200 to $3,000.
Capital One Secured MasterCard. This secured card features a reasonable $29 annual fee and will report payments to the major credit bureaus. Cardholders may also receive a credit line increase as their credit improves. This card has a standard interest rate of 22.9% and a 25-day grace period.
First Progress Platinum Prestige MasterCard. This card’s $44 annual fee is a little high, but its 11.99% APR standard interest rate is quite low for a secured card. There is a 25-day grace period for this card. Cardholders must make a deposit of at least $300 but it is held in an interest-bearing account.
Capital One Cash Rewards For Newcomers. Those with few negatives on their credit report but a limited credit history should consider this card. It has no annual fee, but a 24.9% APR standard interest rate. In addition, cardholders earn 2% cash back on travel purchases and 1% back on all other transactions.
Do your homework! Research and compare more credit cards for rebuilding credit.
At publishing time, OPEN SKY Secured Visa® Credit Card, Capital One Secured MasterCard, First Progress Platinum Prestige MasterCard and Capital One Cash Rewards For Newcomers is offered on Credit.com product pages and Credit.com may be compensated if our users apply for and ultimately sign up for the card. However, this relationship does not result in ANY preferential editorial treatment.