2015’s Best Credit Cards for Poor Credit

Repairing damage to your credit history requires planning and rebuilding. Once you’ve missed credit card payments or defaulted on a loan, you’ll need to prove that you can be responsible for paying your debts. Applying for new credit cards and making payments on time is a good way to improve your credit. The best way to get started is to know what features to look for and which credit card companies have the best offers for those with poor credit.

Disadvantages of Poor Credit

When applying for a new credit card, you should know up front that there might be certain disadvantages you’ll have to overcome to reestablish your credit because you are a higher risk.

• Credit card companies charge even higher interest rates than normal to those with poor credit.

• Credit companies willing to offer cards to those people with poor credit offer extremely low credit limits somewhere between $300-$700 in case you default on your payments.

• Companies willing to take on your risks typically charge a high annual fee in order to be approved for a card.

Features to Look for in a New Credit Card

• Look for credit applications that don’t hit you with a hard inquiry against your credit score when applying.

• Credit card companies that report to all three of the major credit reporting bureaus may help to improve your credit history faster than those that only report to one agency quarterly.

• Look for cards that are willing to increase your credit line quickly after you’ve made multiple payments on time.

• Find a credit card that offers affordable payments, so you don’t miss a payment and damage your credit again.

• Make sure the credit card agreement does not hold you liable for unauthorized charges.

• Find cards that offer fast and simple credit card applications.

Best Cards for Poor Credit

Digital Federal Credit Union (DFCU)

DFCU is willing to work with people that have past credit problems, and they offer a secured Visa credit card for folks on limited budgets trying to rebuild credit. It does require a $10 donation to the Reach Out for Schools organization.

Advantages

• Offers travel benefits.
• Car rental coverage.
• Travel accident insurance.
• Relatively low APR of 11.5 percent.
• No Annual fee.
• No transfer fees.
• No cash advance fees.

Disadvantages

• No bonus rewards.

Capital One

Capital One offers a secured MasterCard, which can be an ideal solution when no one is willing to give you an unsecured card because of poor credit. A secured card means you must put down a deposit amount, and the money becomes your credit limit.

Advantages

• You can put down as much as $3,000 for your security deposit/credit line.
• Builds new credit over time.
• Capital One reports to all three credit bureaus.
• No application fees.
• Provides free access to Credit Tracker, credit scores and credit reports.

Disadvantages

• You must have cash in hand to open a secured MasterCard account.
• The APR is somewhat high at 22.9 percent.
• It has an annual fee of $29.

Credit One

If you have little credit or bad credit, the Credit One unsecured Visa may be a promising option to improve your credit situation.

Advantages

• Allows you to pre-qualify for the card without taking a hard inquiry.
• Reports to all three major credit bureaus.
• Offers cash back on groceries and gas.
• Monitors accounts to see if you qualify for credit line increases.

Disadvantages

• Annual fees ranging from $35-$99.
• High interest rates between 17.9 percent to 23.9 percent.

Merrick Bank

Merrick Bank offers a secured Visa to many customers that may not qualify for other types of credit.

Advantages

• Allows secured credit lines up to a maximum of $3,000.
• Simple online application.
• Quick approval.

Disadvantages

• High interest rates.
• May add an annual charge unexpectedly.
• Poor customer service reputation.

Before applying for new cards, you should always pull a current credit report to check for mistakes and make corrections. Consider any credit company offering credit cards for people with poor credit carefully.