Our top picks for unsecured credit cards that are a good stepping stone to build your credit.
Just because you have a low credit score doesn’t mean you can’t get a good credit card.
Certain unsecured credit cards are targeted at those with credit scores under 650 or with no credit score at all. These cards generally have lower credit lines and fewer benefits than more premium credit cards, but are a good stepping stone to build your credit.
This guide takes a look at the top unsecured credit cards for bad or no credit and what to do if you’re denied.
Unsecured credit cards for those with bad or no credit
Sphere® Credit Card from Santander
The Sphere® Credit Card from Santander is aimed at those with poor to fair credit and offers 0% intro APR on purchases and balance transfers for the first 18 billing cycles. If you’re looking to refinance your credit card debt, this could be a contender. The card also earns you 1.00 reward point for every dollar spent, with no limits and no annual fee.
Credit One Bank® Unsecured Platinum Visa®
The Credit One Bank® Unsecured Platinum Visa® is a basic starter credit card that’s aimed at helping those with bad credit recover. This card earns 1.00% cash back on all purchases and offers flexible payment due dates, helping you to consistently make payments on time. Note that the card has an annual fee that ranges from $0 to $75.00 for the first year, and $0 to $99.00 for every year after that.
Citi ThankYou® Preferred Card for College Students
College students older than 18 years old with no credit can apply for the Citi ThankYou® Preferred Card for College Students. This card has no annual fee and earns Citi ThankYou points on all purchases to be redeemed for gift cards, travel and cash back. The card earns 2.00 points per dollar spent on dining and entertainment and 1.00 point per dollar spent on all other purchases.
What if you’re not approved?
If you’re rejected for an unsecured credit card, try calling the credit card company’s reconsideration line. This number is usually printed on the rejection letter the bank sends you 7 to 10 days after it makes its lending decision. Ask the customer service representative why you were denied and if you can work with them to reconsider the bank’s decision.
Consider applying for a secured credit card if you don’t have one already. Secured credit cards require a cash deposit upfront that acts as the credit line for the card. Lenders are more likely to approve someone with bad or no credit for a secured card because they can apply the collateral to the card’s balance if you miss a payment.
Secured credit cards act similarly to an unsecured card on your credit report, as long as the lender reports to all three credit bureaus, so make sure to keep up on your payments. Keep in mind that late payments will still hurt your score even if your cash collateral is used to cover a missed payment. Check out our guide to secured credit cards for more information.
When you apply for a credit card and are rejected, this can show up on your credit report as a hard pull. Wait a few months to apply for another card, then apply for a card that offers guaranteed approval if you meet the requirements or does a soft pull on your credit report. That way you’ll avoid damaging your credit score even further.
Moving from a secured to unsecured credit card
After a year of making on-time payments to your secured credit card, give your bank a call. If your credit score is over 650, there’s a chance the lender will offer to convert your secured card to an unsecured card.
Once your card’s converted, you should receive your deposit from your secured card. If your bank doesn’t offer to convert your secured card, check your credit score. A score over 700 should qualify you for an unsecured credit card. Consider switching to a secured card with a more lenient or transparent process for converting to an unsecured card.
Further improving your credit
If you’re approved for an unsecured or secured credit card, you’re already on track to improving your credit score. Make sure to manage your credit card properly by making regular, on-time payments. Keep your balances low and make sure to pay off any accounts in collections. Check out our guide to improving your credit rating for more information.
It’s also a good idea to keep an eye on your credit score. Most credit card issuers give you free access to your FICO score. If you don’t yet have a credit card, free credit monitoring software like Credit Sesame will give you free access to your credit score and history.
Even if you don’t have the best credit score or you have no credit at all doesn’t mean there aren’t unsecured credit cards out there that may be a good fit for your financial situation. While these credit cards typically don’t offer high credit lines or many perks, all of our picks do have cash back rewards, which is something.
If you’re still having a hard time getting approved for one of these unsecured credit cards, you might want to look at our top picks for secured credit cards. Once you’ve had the card for at least a year and have proven you’re capable of making on-time repayments each month, you may be able to upgrade to the unsecured version of the card. If not, try reapplying for one of these other unsecured cards once your credit score has improved.