Around one-third of Americans have a bad credit score.¹ This can restrict the ability to take out loans, lease a car, get a mortgage and apply for a credit card. The good news is that credit cards can be an absolute lifeline for climbing back from the black hole of low credit and debt. Thankfully, there are a number of great credit cards for rebuilding (or building) credit.
Capital One Secured Mastercard
The Capital One Secured Mastercard is a solid choice for bulking your credit score back up and getting a positive track record of payments. You can opt for whichever credit line works best for you and utilize Capital One CreditWise service to see how your credit score changes over time.
A strong advantage to the Capital One Secured Mastercard is that it has no annual fee and you only need $50 to open up the credit line. Also, after just five months of on time payments you will receive upgraded line of credit options.²
Credit One Bank Platinum Visa
This Credit One Bank Platinum Visa also boasts many impressive features for those looking to rebuild credit. It offers a solid 1% cash back on gas, groceries, and phone purchases no matter your credit score as long as you pay each month off on time. It also offers generous grace periods and a relatively low APR of 19.49-25.49% variable. The first year costs $95 but comes with a minimum credit line of $300.³
The Indigo Mastercard is another excellent choice. No money is needed to start a line of credit on this card and as long as you pay off your monthly installments on time your credit score will start to steadily climb up. The card is even available to apply for if you have been bankrupt previously.⁴ It does have a somewhat high APR of 24.9%, so make sure to pay the card off on time.
OpenSky Secured Visa
The OpenSky Secured Visa card has no credit check and minimal income requirements. It is the perfect choice for individuals whose credit score is on life support or already flat-lined. It’s truly a card meant for improving credit. You simply choose a credit line and secure it with a refundable deposit. The OpenSky costs only $35 per year and it can be exactly the right way to start over and try to stay within your means.⁵
DCU Visa Platinum
The DCU Visa Platinum is also a great option. It is one of the cheapest on the market with no annual fee and a fantastic purchase APR that can go as low as 10%. The only caveat here is that to apply for the DCU Visa Platinum you’ve got to be in the Digital Federal Credit Union.⁶
Discover It Secured
Discover It Secured is well worth considering. The card also offers 2% cashback at gas stations and restaurants for the first $1,000 spent each quarter and 1% cash back on all other purchases. With no annual fee and an APR starting at 10.99% for the initial six months, this card has a lot of good incentives. The normal APR goes back up to 24.49% after the initial six month period, but this card is still great if you’re confident about paying it off on time.⁷
Things To Remember As You Rebuild Your Credit Score
There are a few important things to remember in the process of working to rebuild your credit score. Firstly, do not apply to many different credit cards at once. This can take a big chunk off your credit score. Carefully select the card(s) you apply to and consider the pros and cons of multiple options. And don’t get too caught up in short-term rewards perks or advantages. Think about what you really need.