Best Credit Cards for Bad Credit of 2017: Pros & Cons of 5 Popular Cards

Having bad credit is expensive.

Finding a good credit card is difficult. Getting a good rate on an auto loan is a burden. Need a decent interest rate on a mortgage? Forget about it.

In other articles on HighYa.com, we talk about why you get bad credit scores and how you can raise them.

Now, we’re guessing that, since you’re researching good credit cards for people with bad credit, you probably know at least a few of the reasons why you’re in the financial position you’re in.

This article isn’t intended to set you straight. Instead, we’ve researched popular offers to find the best credit cards for bad credit (some of them don’t even require a deposit).

We narrowed it down to five credit cards we think will be a good fit for you, cards that will help you restore your credit and help slowly increase your credit scores.

For each card in this article, we’ll include the card’s interest rate, any processing fees required to start an account, the deposit they require and the pros and cons of each card.

At the end of our article, we’ll give you a few links to the articles that will help you boost your bad credit.

A Quick Word About “Secured” and “Unsecured”

The first card we’re going to cover is an unsecured credit card.

Now, that term “unsecured” is an interesting one because it means that you’re getting a line of credit without making a cash deposit to open the card. In that sense, you’re getting a credit limit without giving anything to the bank.

The bank is thinking, “Hey, we didn’t get anything in return for giving this customer a credit card. Their credit limit isn’t secure.”

This is why a mortgage, for example, is a secure debt. The bank can take your house; your house is collateral if you don’t pay back the bank.

1. Total Visa Unsecured Credit Card

The Total Visa card is a popular one with people who have bad credit because it’s unsecured. You don’t have to pay a deposit to start your account. Here is a quick list of the card’s fees and rates:

  • Credit limit: $300
  • APR: 29.99%
  • Processing fee: $89 (one-time)
  • Annual fee: $75 first year, $48 after that
  • Monthly service fee: None 1st year, $6.25/month after
  • Late fee: Up to $38

Normally, we’d point out that the APR on this card is really high. The highest, in fact, that you’ll find with a consumer credit card. However, because these cards are made for consumers with bad credit, these APRs are understandable.

Now, while we pointed out that unsecured cards don’t require a deposit, that doesn’t mean you’ll have a fee-free experience with this card.

As you can see, you’ll pay $164 of fees the first year of owning your Total Visa, then $123 a year after that.

This is the credit card company’s way of getting money from you to offset the potential of you making late payments or just not paying your balance at all.

Pros

The obvious positive to the Total Visa is that you don’t have to pay a deposit to open the card. Aside from that, there aren’t any other significant advantages to owning this card.

Cons

The Total Visa’s main drawback is the big chunk of fees you’ll pay up-front to open the card. While you’re not paying a security deposit on the card – which is refundable with other cards – you are paying big chunks of cash.

2. Discover it Secured Credit Card

Unlike the Total Visa, the Discover it Secured card requires a cash deposit of either $200 or $500 in order to open up an account.

Here are the rates and fees you can expect to pay on the Discover it Secured card:

  • Credit limit: $200/$500
  • APR: 23.74%
  • Processing fee: None
  • Annual fee: None
  • Monthly service fee: None
  • Late fee: $0 first time/$37 after

Discover credit cards have a really great reputation for giving consumers good interest rates and low or no fees.

This credit card is no different. Even though it’s designed for those who have bad credit, they still manage to maintain their commitment to consumer-friendly cards.

Pros

What we really like about this credit card is the lack of fees: no processing fee, no annual fee and no monthly service fee.

In addition to that, the APR you get with this card is equivalent to the higher APRs that most credit cards charge consumers of average and bad credit.

We also like how, according to this card’s fine print, you can get your deposit back after seven months if Discover thinks you’re ready for an unsecured card “after showing responsible use of all your credit over time.”

In addition to these great perks, there’s another feature to this card that makes it very different than the other cards on this list: rewards.

Whenever you use your credit card to make purchases at restaurants or gas stations, you’ll earn two points for every dollar you spend. All other purchases will earn one point per dollar.

Discover will match any points you rack up your first year, making this card’s list of perks look very impressive.

Your points can be converted to cash that’s added to your statement: 1,000 points is equivalent to $10.

Cons

We’re pretty hard-pressed to come up with a negative observation about this card. None of the fees or rates alarm us.

We even stopped by Credit Karma to check out customer reviews of the card and found that 76 reviewers gave the card an average of 4.5 stars.

3. USAA Secured Card American Express

Another card that gives a pretty good deal to consumers with bad credit is the USAA Secured Card American Express.

Here are the card’s important rates and fees:

  • Credit limit: $200 - $5,000
  • APR: 10.65% - 20.65%
  • Processing fee: None
  • Annual fee: $35
  • Monthly service fee: None
  • Late fee: Up to $35

This card is available to customers of USAA, an insurance and financial company that offers products to members of the military or their family.

While the card is limited to a smaller group of people, we think it’s a pretty good fit for USAA members.

Pros

We really like how this card has some great APR’s for consumers with bad credit. Normally, credit card companies try to offset the risk of you not paying back your balance by charging you high APR’s – the Total Visa is a good example.

However, it’s refreshing to see USAA and Discover offering decent APR’s to its customers, most of whom are trying to rebuild their credit.

The USAA Secured’s low-end APR of 10.65% is extremely competitive and, while it’s an incredible offer, it’s our opinion that this rate is reserved for customers with average credit: mid-600’s or higher, most likely.

If your credit score is below 600, there’s a good chance you won’t get that lower APR.

The positive side to this, though, is that the highest APR on this card is still almost 4% lower than the Discover and nearly a full 10% lower than the Total Visa.

Also, the fact that you can secure a credit limit as high as $5,000 is a great thing – if you can afford it. A 2016 CNBC article indicates that, on average, Americans have less than $1,000 in their savings account.

Based on these numbers, it seems that few of us have enough money to put down $5,000 for a $5,000 credit limit on the USAA Secured AmEx.

Cons

Aside from the $5,000 credit limit being out of reach for most Americans, we find the other negative on this card to be the annual fee.

At $35, it’s pretty reasonable compared to other cards for people with average or good credit. However, credit card companies usually charge an annual fee because they’re giving you free perks.

There are no free perks with this card – no miles, cash back or points. However, you could argue that the card’s low APR is a perk, in which case $35 is a small price to pay if you carry a balance, at which point your APR would kick in.

4. Credit One Platinum Visa

The Credit One Platinum Visa is a popular card among people with bad credit. Take a look at the rates and fees, then we’ll break down what we like and don’t like about this card:

  • Credit limit: $300 - $1,500
  • APR: 16.15% - 24.65%
  • Processing fee: None
  • Annual fee: $0 - $75 1st year, $0 - $99 after
  • Monthly service fee: None
  • Late fee: $38

When you have bad credit, it’s important to find a card that has a good mix of lower APRs, low annual fee and a high credit limit. You get a little bit of everything with the Credit One Platinum, and that’s both a good and bad thing.

Pros

The Platinum’s strengths lie in its middle-of-the-road APR and the fact that you can have a credit limit as high as $1,500.

Granted, the APR isn’t as low as the USAA or the First Progress Platinum (more on that card in the next section), but you do get interest rates similar to what someone with excellent credit would get with the Chase Sapphire Preferred, a top-of-the-line credit card.

Cons

The con with this card is pretty straightforward: annual fee. The Platinum’s annual fee will change depending on what your credit score is, so if you’re rocking scores below $600 you can expect to pay $75 the first year and $99 the following.

This isn’t a guarantee, of course, but it’s typically how credit card companies handle things like annual fees and interest rates.

5. First Progress Platinum Prestige Mastercard

The final card on the list is one of Mastercard’s many credit cards for people with bad credit. Here are the First Progress Platinum Prestige’s rates and fees:

  • Credit limit: At least $200
  • APR: 9.99%
  • Processing fee: None
  • Annual fee: $49
  • Monthly service fee: None
  • Late fee: $38

The First Progress Platinum Prestige leads the group of cards listed here in APR and has a reasonable yearly fee.

Pros

The Platinum Prestige leads our list of five cards for bad credit when it comes to APR. Its single interest rate of 9.99% means that, if you’re accepted for this card, that’s the APR you’ll get.

There’s no range of APR’s like there is on the USAA card, which is good because your APR won’t be a guessing game. Either you get it or you don’t.

Cons

The one drawback to this card is its annual fee. Yes, the fee isn’t as high as what you might get with the Total Visa or the Credit One Platinum, but the fact that you have to pay nearly $50 a year to own the card still cuts into your wallet.

You could argue that the annual fee is worth the low APR, but the goal is to pay off your balance every month so you don’t’ have to make interest payments based on your APR.

Our Final Thoughts About Best Credit Cards for People With Bad Credit

Like we said at the beginning of this article, living with bad credit is not fun – that’s an understatement.

Life doesn’t get any easier when you’re applying for a credit card, either. Instead of just getting a credit line you can use when you want, you’ll usually have to pay at least $200 as a deposit to show your bank you’re serious about opening a credit card.

The struggle isn’t over when you open your account, though. Some cards will charge you high fees just for opening and using an account – the Total Visa is a great example of this.

Others may not charge high fees, but their credit limits are really low. The Discover it Secured card is the prime example here – their credit limits are either $200 or $500.

The goal of finding a good card for rebuilding your credit is to find one that has just the right mix of low fees and enough of a credit limit to make the purchases you need to make.

Discover’s Secured Card is One of the Best

In our opinion, the Discover it Secured card is the best option you have. The card’s credit limits are low, as we mentioned, but the positives to owning this card far outweigh the negatives.

It is the only card we researched that gave rewards for spending money. It’s also the only card with no annual fee.

In addition to these benefits, appreciate how Discover is willing to make your card unsecured if you can maintain on-time payments and other good financial habits for seven months.

While the card’s APR is higher than the others on the list, you can mitigate this one drawback by paying off your entire balance each month. That shouldn’t be hard to do, considering your credit limit will be, at the most, $500.

And, as if the perks weren’t enough, you’ll also earn cash rewards on nearly every purchase you make. Assuming you can spend about $500 a month on your card, then, by the end of the year, you’ll earn about $60 in rewards.

Learn How to Boost Your Bad Credit

We want to leave you with a few reading recommendations because we know strengthening your credit is probably important to you.

In our article about why credit scores drop, we talk with industry experts about some of the not-so-well-known ways that your credit scores can drop. It’s a really helpful article if you want to understand the inner workings of your credit scores.

Another article we suggest is one that we wrote about why bad credit scores exist and how you can repair them.

We combine the advice of credit-scores experts as well as our own research and experiences to present an in-depth guide on how to manage your bad credit and improve it.


J.R. Duren

J.R. Duren is a personal finance reporter who examines credit cards, credit scores and bank products. J.R. is a three-time winner at the Florida Press Club’s Excellence in Journalism contest and his advice has been featured in MSN and Fox’s money sections.


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