Maintaining a reasonable credit score is quite a task nowadays especially for someone who has multiple debts to take care of. A bad credit score means that you have a poor record of paying your bills and loans on time. It’s as simple as it sounds!
There can be multiple reasons behind poor credit history like bankruptcy,charge offs or late payments and bills. In such a situation, a borrower will always find it difficult to get more loans mainly due to credit risks.
Now in order to fix it all, you of course first need to work on your credit history and this is where you need to learn about credit cards for people with bad credit.
What Is A Credit Builder Card?
A credit builder card is specifically for those people who want to start over and build a credit history from scratch. These cards can come in handy to you even if you wish to bring your credit score on track.
These credit cards for poor credit come with a high APR and a low credit limit. It’s all for the lender so that he doesn’t end up losing money if you aren’t able to make your payments on time. A high APR means that you’ll be paying a huge amount of interest on your outstanding credit so it’s crucial that you make the complete payment on time.
Moreover, with these cards you can’t expect to get any promotional offers and there will be 0% rewards on any kind of purchases or balance transfers.
How Does It Work?
These bad credit credit cards will obviously have a negative impact on your credit score initially but when you manage your finances and the card responsibly, you’ll see the positive change for yourself. Managing the card means, making your repayments on time and most importantly, staying within your credit limit. This way you’ll start appearing more reliable to companies and once your score goes up, you can then increase the credit limit.
One of the most important things to do is to remember your credit limit and just make sure that you are using less than 25% of it. For example, if you get a $3000 loan, try to use less than $750 at one time.
Top 5 Credit Cards To Build Your Credit Score
Here’s a list of some of the best rated credit building cards for the year 2025;
1-Surge-Platinum MasterCard
The Surge Mastercard is ideal for someone who wants to rebuild his credit. With an annual fee of $75-$125, this credit card doesn’t require any security deposit and has an initial credit limit of $1000. What’s best about this card is that it’s accepted at a million locations so you can use it anywhere without any hurdle. It’s the best card to manage any unexpected expenses and daily purchases. Moreover, it comes with an APR of 35.90% which does not increase with time.
2-Reflex- Master Platinum Card
Even if you have a very below average credit score, your application will easily be accepted. The best part about this card is that it comes with a low APR and low annual fee which can ease things off for you. It comes with an ongoing APR of 35.90% which is fixed. Moreover, you don’t need any security deposit to get this credit card.
3-Capital One Quicksilver Secured Cash Rewards Card
In this card, you just need to submit a $200 refundable deposit to get an initial limit of $200.The reason why Capital One Quicksilver is highly recommended is that it comes with absolutely no annual fee. Yes, you read that right and even the APR is just 29.74%. Without any additional deposit, you can expect your credit line to increase in just 6 months if you manage the card responsibly. What’s best is that you can monitor your credit score any time you want with CreditWise. It’s absolutely free.
4- Bank Of America-Unlimited Cash Rewards Secured
Another great credit builder card that comes with no annual fees at all. With this card you get 1.5% cashback on all your purchases and the rewards don’t expire till you close your account. Once you submit the security deposit of $200-$5000, the bank will then use a combination of your income and your required deposit to build your credit line. It comes with an APR of 28.24% which is quite reasonable and a 4% balance transfer fee on every transaction. If you really are in a dire need to fix your credit score then this card is great option for you.
5-Platinum Prestige Mastercard Secured Credit Card
With an annual fee of $49, the Platinum Prestige card comes with an APR of 14.24%. Without any credit inquiry you can start building your credit by depositing just $200 with just a single online application. After making timely payments for 6 months, you can then apply for a First Digital Mastercard. What’s best about this card is that it comes with no foreign transaction fee and you don’t need to show any credit history for it. Just the minimum credit score will work here for you. With the First Progress Card mobile application, you can easily manage all your transactions, rewards and even your statements.
Useful Tips To Manage Your Credit Builder Card
Once you are in it, you have to work on improving your credit score otherwise you’ll end up in hot water. Here are some tips to manage your card efficiently;
- Avoid making late repayments at all costs or else you’ll have to pay a higher interest rate and it will also reduce your credit limit.
- If you pay your credit card in full every month without any delays you then won’t have to pay any interest on top.
- To avoid any issues with your future applications, pay the full amount of the card or if you aren’t able to do that then at least pay the minimum but don’t miss it.
- Opt for email or SMS alerts so that you don’t miss your deadlines.
The Downside Of Credit Builder Cards
There’s no doubt in the fact that these cards will improve your credit score with time and you won’t have to worry about loans for bad credit then. However, there are a few downsides to it that you should know about;
- The lower credit limit factor can become a problem for you in the initial stage and you might feel like this isn’t of any use. But with the right management, this credit limit can increase with time.
- If you are struggling with credit management then these cards can become a bit more expensive for you than the traditional ones. The reason being that a credit builder card comes with a higher interest rate and fees so you’ll have to deal with that for a while just for the sake of improving your credit score.
- As said earlier, you can’t afford to make any late payments when you opt for this card. Even a single late or missed payment will have an even worse impact on your credit score.
Why Is Building Credit So Important?
Your credit score tells how good you are with your money and this is what exactly banks look for when you apply for any loan for a car, a house or even a phone. They also use this to determine the amount of money they should lend considering if you’ll be able to pay it back on time or not. It affects everything, including your mortgage applications, major loans and something as minor as an internet plan too.
You just need to look for the best credit card to rebuild credit and then you can enjoy all the perks that you want to. With the right credit score, you can get low APR loans, better credit limit and additional credit card options.
Applying For The Credit Builder Card
Whether it’s for building credit score or managing your debt, you just need to look for the best debt consolidation programs first. You can apply for these cards online or in person by visiting the brand of the lender. Make sure all your information like your income and debts are accurate. Most importantly, before you submit any application, read all the information twice to ensure there are no errors. Even a simple error or misinformation in the application can lead to rejection.
If you want to improve the chances of your application approval then first work on your credit score and look for the best credit card debt consolidation loan.
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