Easiest Unsecured Credit Card Approval: Apply With Bad Credit Score

Michelle Brooks

Michelle Brooks

Financial Advisor

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The subject of credit cards is a hotly debated issue among finance experts and with good reason. Credit cards can be a blessing or a curse, depending on how they’re used. When used responsibly, they are a great financial tool that makes buying products and services easier and more secure. It’s important to understand when to use your credit card and how your balance impacts your financial well-being. If you don’t have a credit card, and you’re ready to take the plunge, then read on for tips on how to get an unsecured credit card.

Topics Covered

Secured vs. Unsecured: What’s The Difference

You may have heard the terms secured and unsecured credit cards, not realizing they are different types of extensions of credit. An unsecured card is the credit card that most people apply for first. Unsecured cards are simply a line of credit offered to you by a bank, credit union, private credit company, retail store or gas station. The credit offer is based on a legal agreement between you and the credit card company, in which you agree to repay the money you borrowed. There is no collateral required to get an unsecured credit card. If you were to default on your unsecured credit card balance, then the creditor uses collection methods to get the money that’s owed.

A secured credit card is a common type of card that people with bad or no credit use. While a secured credit card can be used in the same way as an unsecured card, this card requires collateral, usually in the form of a cash deposit. Secured cards are issued with lower spending limits and higher interest rates. The spending limits are sometimes equal to the amount of the card holder’s deposit, but that can change over time as your credit score goes up. Secured credit cards are easier to get than unsecured cards since you’re paying money upfront to use it.

Unsecured Credit Cards

What You Need To Know Before Applying For An Unsecured Credit Card

Credit card terms aren’t always the easiest to understand, especially when you try reading the fine print on your credit application. Unless you have a degree in finances, not all of the terms and conditions on a credit card application may be clear. As you begin your search for an unsecured credit card that suits your budget and lifestyle, here are the terms that you need to consider before you decide on a card.

Annual Fees

Most unsecured credit card companies charge an annual fee as part of your credit card account, some of which can be quite high. There are companies that will waive the annual fee through special offers or after you prove your creditworthiness after a specified period of time. Before you sign up, consider whether the company’s annual fee is within your budget, since it will be part of your first credit card statement. Be prepared for it to renew every year, so you’re not shocked when it comes up again.

Annual Percentage Rate (APR)

Your card’s APR is as important as the portion of the annual fees of your terms. The APR refers to how much interest you’ll be charged on your credit card balance. There are many companies who offer a zero percent APR for the first 3-6 months to get you to sign up, but then the rates jump up dramatically. Ideally, you should find a card with an APR of below 15 percent or less, based on the national average in the United States.

Sign Up Promotions

You know about the zero percent offers for new unsecured credit cards, but there are a variety of other bonuses to search for when shopping for a credit card. Bonuses include cash back, no payments due for an extended period of time, no fees on balance transfers, and sometimes there is even an offer of merchandise with your new credit card. Promotions are designed to hook new customers, so beware of any hidden fees before making your decision.

Unsecured Credit Cards

Rewards Programs

Many credit cards come with programs that pay you for using your card. There are cashback programs, loyalty programs and frequent flyer credit cards. Cashback programs pay you a percentage of what you’ve purchased on the card, while loyalty programs provide perks for cardholders. Frequent flyer cards give you bonus points to put towards airplane tickets.

Balance Transfers

An excellent benefit of unsecured credit cards is the ability to transfer your existing card balances to your new card at a zero or low APR. This can work in your favor if you’re trying to lower your monthly payments and have several credit cards already.

You can use these features as a guideline for comparing credit card offers. Always remember to read the fine print before applying. You don’t want to get hit with excess fees or higher interest rates than you expected.

Pre-Approved Offers

When you’re ready to apply for your new unsecured card, you need to know that too many requests for credit can lower your credit score. You’ll want to make sure that if you apply for a card and get turned down, that you don’t continue to apply for other cards right away. If you’re unsure if you’ll qualify for an unsecured credit card, one way to check is by applying for a pre-approved credit offer.

You may have received pre-approved offers in the mail or online. The benefit to these offers is that your credit application is considered a “soft” inquiry on your credit, so it won’t lower your credit score. When you receive a pre-approved offer from a financial institution, the company has already looked at a snapshot of your employment and credit history and has found you to be a good candidate for a credit offer. Keep in mind that if you receive a pre-approval, then you still must qualify for the credit card based on your current credit score and income situation. However, pre-approval is a good way to find out what you might qualify for before the application process.

The Application Process

Most people apply for unsecured credit cards online these days. It’s an easy and fast way to seek approval; in some cases, you may get an approval in under a minute if your credit score is high. You’ll fill out a basic application that will ask you to fill in your personal data such as your full legal name, date of birth and social security number.

You’ll be required to list your address and previous address, depending on how long you’ve been at your current residence. Next, you’ll need to tell the credit card company about your employment including the name of the business, their address and how long you’ve been employed there. You will need to fill in your annual income as well. It’s important to fill out the application as accurately as you can because all of the information you submit will be verified.

Unsecured Credit Cards

Factors That Impact Being Approved For An Unsecured Credit Card

When you apply for an unsecured credit card the company will run a credit check to verify that the information you provided is accurate. It will also be looking at your credit score, payment history and outstanding debts. In some case, if you have a bankruptcy, liens or collections accounts, you will be automatically disqualified.

If your application is rejected it’s your right to know why. The company must provide you with a written statement with the reason for the denial. Under the Fair Credit Reporting Act, you have the right to receive a free copy of your credit report when you’re denied credit. If you are denied, then you should review your credit report to verify the information in your file. If there is inaccurate, outdated or fraudulent information listed, then you need to take immediate steps to dispute the information by contacting these three credit reporting agencies: Equifax, TransUnion and Experian. Most issues will be resolved within 1-2 months of filing the dispute, so you can consider re-applying for an unsecured credit card if you know that your credit score is acceptable.

What To Do If You Are Turned Down

Depending on your situation, there are a number of different remedies to help you get an unsecured credit card. For instance, if you have no credit history or a very limited one, you may also get turned down for an unsecured card and be unsure where to get credit. Perhaps you have a decent credit score, but your income is too low or your debt is too high.

If these scenarios describe your situation, then getting a co-signer may be your answer to getting an unsecured credit card. A co-signer should be someone you trust who is willing to take on the responsibility of the debt in case you can’t make payments. Parents will often co-sign for their adult children to help them build their credit. If you do get a co-signer, then make sure you always pay on time since late payments will show up on their credit report. Make sure your co-signer understands what will happen if you default on the credit card payments.

If getting a co-signer isn’t a good option for you, then you should consider applying for a secured credit card instead. This is a great option if your credit score is low due to late payments, judgements or other derogatory marks. Secured cards are also excellent for you if you have no credit history. When you use a secured card and pay on time consistently, you’ll raise your credit score and show other creditors that you are a good candidate for other forms of credit.

Responsible Use Of Credit Cards

Whether you get a secured or unsecured credit card it’s important to remember what your financial obligations are. When you have a line of credit, it’s tempting to treat yourself to items that are outside of your budget. Unless you plan on paying your entire balance off every month, remember that interest will accumulate on your balance. Minimum payments will keep you in debt for a long time, so you should try to pay more than just the monthly payment amount to keep your credit score looking good.

Once you receive your credit card, then it’s likely you’ll receive other offers of credit. When you have an array of credit cards it can hard to pay even the minimum payments, and you may get into financial trouble. Be credit-wise and know what you can afford to maintain a good financial history.

Unsecured Credit Cards

FAQ

General Unsecured Credit Card Questions

This section answers your most common questions about unsecured credit cards.

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What are unsecured credit cards?

An unsecured credit card is a credit card where you don’t have to pay a security deposit upfront. The card is secured by your promise to pay it back.

How to apply for unsecured credit cards?

You can apply for unsecured credit cards by going to the appropriate site online and filling out an application.

How unsecured credit cards work?

Unsecured credit cards are just like any other credit card. You get a card and a credit limit. You promise to pay back the at least the minimum balance each month.

Which banks have unsecured credit cards?

Almost every bank has an unsecured credit card with at least one major credit card carrier.

Who are the major unsecured credit cards?

Capital One, Chase, American Express, and Wells Fargo are some of the biggest credit card names.

What are easy unsecured credit cards to get?

The Credit One bank Visa for rebuilding credit is a good option for people looking for an easy credit card.

What is the average interest rate for unsecured credit cards?

On average unsecured credit cards have an interest rate of 17.21%, but this can change a lot based on your credit situation.

What are the easiest unsecured credit cards to get approved for?

The easiest unsecured cards to get approved for are those designed for rebuilding credit. Credit One Bank and Milestone are two good options.

Who should and should not get unsecured credit cards?

Anyone who can’t be sure they can pay their bill each month shouldn’t get a credit card.

What are different types of unsecured credit cards?

Unsecured credit cards have lots of different consumer perks, including miles, cash back, points, and other rewards systems.

How do banks set interest rates for unsecured credit cards?

Banks use a risk assessment method that analyzes your credit score and history when setting interest rates for an unsecured credit card.

Unsecured Credit Cards for Specific Credit Scores

We’ll answer your questions about unsecured credit cards for specific credit scores in this section.

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What are the best unsecured credit cards for bad credit?

Credit One Bank Visa for Rebuilding Credit and the Milestone Unsecured Mastercard are the two best credit cards for bad credit.

What is an unsecured credit card for bad credit?

We recommend the Credit One Bank Visa for Rebuilding credit and the Milestone Unsecured Mastercard for people that have less than awesome credit.

What unsecured credit cards are good after bankruptcy?

After bankruptcy you should focus on credit cards that are designed to rebuild credit. The Credit One Bank Visa for Rebuilding Credit and the Milestone Mastercard are two good options.

What unsecured credit cards can I qualify for with a 520-credit score?

You’re going to have a hard time qualifying for an unsecured credit card with a 520 credit score. Credit One Bank and Milestone are your two best options.

What unsecured credit cards can I get with a 600-credit score?

A 600 credit score won’t give you access to the best credit cards. Focus on student credit cards or credit cards for rebuilding credit, like the Credit One Bank Visa for Rebuilding Credit

How to get credit cards unsecured no deposit instant approval with bad credit?

There probably aren’t any instant approval no deposit unsecured credit cards for bad credit. However, your best bet is with a credit rebuilding credit card, like the Visa from Credit One Bank

What FICO do I need to get unsecured credit cards?

The best credit score possible will get you the best credit card options. However, if your score is low you can always try unsecured credit rebuilding cards like the one Milestone offers through Mastercard. To get cash reward credit cards for example you usually need good to excellent credit.

Which unsecured credit cards for fair credit have instant approval?

No unsecured credit card has an automatic approval, but nearly every credit card will return a decision on your application instantly.

What unsecured credit cards are available for credit scores between 500-550?

The best unsecured credit cards for credit scores between 500 and 550 are credit rebuilding cards like the Credit One Bank Visa for Rebuilding Credit and the Milestone Unsecured Mastercard.

What’s a good unsecured credit card for someone with average credit?

We like the Capital One Quicksilver One Cash Rewards credit card for people with average credit. It has cashback and you get a credit line increase after 5 on time payments.

What’s a good unsecured credit card for someone with Fair credit?

People with fair credit should look into the ABOC Platinum rewards credit card. It’s got no annual fee and statement cash back rewards.

What’s a good unsecured credit card for someone with Excellent Credit?

The Chase Sapphire Preferred credit card is a great choice for someone with excellent credit. You get a ton of bonus points and other perks.

Unsecured Credit Cards and Credit Reporting

This section covers the most popular questions about unsecured credit cards and credit reporting.

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Which secured credit cards report as unsecured?

None. Unsecured and secured statuses aren’t reported to credit agencies, and have no effect on your credit score.

How can unsecured credit cards build credit scores?

Unsecured credit cards build your credit score by giving you access to credit and by reporting your on-time payments to the credit reporting agencies.

What are good unsecured rebuilding credit cards?

The two best unsecured credit cards for rebuilding credit are the Credit One Bank Visa for Rebuilding Credit and the Milestone Unsecured Mastercard.

What happens if unsecured credit cards report as unsecured?

Nothing. What matters for credit reporting is if you paid your bill and how much of your credit limit you’re using.

How does a personal loan affect credit versus have unsecured credit cards?

It depends on a lot of factors. You’ll need to talk to a credit expert to get more information about your particular case.

What builds more credit secured or unsecured credit cards?

Secured and unsecured cards build credit at the same rate in the same way.

How much does credit score go up with unsecured credit cards?

That depends on lots of different factors. You’ll need to talk to a credit specialist to get information about your specific case.

What are best unsecured credit cards reported to all 3 bureaus?

Any unsecured credit card is reported to all 3 bureaus. The card itself doesn’t matter. What matters is paying your bill on time and keeping your credit utilization down.

Is it better to get one secured credit card or 2 unsecured credit cards when rebuilding credit?

It depends on how you handle the situation. Making more on-time payments is always better, but you need to be sure you can make those payments.

Unsecured Credit Cards and Payments

This section covers questions about unsecured credit cards and payments.

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What unsecured credit cards will sue rather than write off?

It’s hard to say. Credit card companies and banks don’t list this kind of information.

What is the statute of limitations on unsecured credit cards?

The statute of limitations on unpaid unsecured credit card debt depends on the state where you live and other local laws.

Unsecured credit cards - if you don’t pay what can happens?

If you don’t pay your unsecured credit card bill your credit score will drop, you’ll get fines and fees, and you may face other penalties as well.

Unsecured Credit Cards and Bankruptcy

We’ll answer the most common questions people have about unsecured credit scores and bankruptcy in this section.

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How much money is exempted from unsecured credit cards taking or garnishing from your bank account?

This is a tricky scenario. You need to talk to a bankruptcy or consumer law attorney to get specific information about your case.

How do unsecured credit cards affect a new bankruptcy?

It depends on several different factors. A bankruptcy specialist or lawyer can help you understand your situation.

What are the rules that apply to unsecured credit cards when filing chapter7?

You’ll need to talk to a bankruptcy attorney to find out what laws and rules apply to your specific case.

How many unsecured credit cards request payment in chapter 13?

There’s no statistical information available about this, but a good bet is all of them request money.

Secured and Unsecured Cards

This section helps you understand the relationship between secured and unsecured credit cards.

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What is the difference between secured and unsecured credit cards?

A secured card requires a security deposit that the card issuer gets to keep if you don’t pay your bill. An unsecured card doesn’t require a deposit.

Secured vs. unsecured credit cards which is better?

It depends on your situation. It’s better to have a secured card than an unsecured card with an extremely high interest rate. Then again if you want perks like the best mile reward credit card then it will be unsecured most likely.

When do secured credit cards become unsecured?

Each secured credit card has its own rule and policies about when the account can graduate to an unsecured card.

What secured credit cards graduate to unsecured?

Most secured cards graduate to unsecured. Capital One, Wells Fargo, and Blue Sky are three popular options.

How long does it take for secured credit cards to become unsecured?

The amount of time it takes for a secured credit card to become unsecured depends on several factors, including your payment history and the rules and policies of the card issuer.

How do security deposit credit cards work compared to unsecured?

With a secured credit card, you need to make an initial security deposit to get the card. Your security deposit will determine the credit limit on the card.

Other Unsecured Credit Card Questions

We’ll cover unsecured credit card questions that don’t fit into our other categories in this section. Check here if you can’t find your question elsewhere.

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How much credit on unsecured cards?

The amount of credit you get on an unsecured card depends on which card you’re getting, your credit score, and other information.

What to do with unsecured credit cards?

You should treat unsecured credit cards the same way you treat secured ones. Always pay off your entire balance if you can and be sure to never miss a payment.

How much banks profit off unsecured credit cards?

You’ll need to look into financial statements for each bank to determine how much each bank profits from unsecured credit cards.

What are pros and cons of unsecured credit cards?

The big pro of an unsecured credit card is that you don’t need to make a deposit to get one. The drawback is that you can suffer serious fines and fees if you don’t pay your bill on time.

How many unsecured credit cards should I have?

That depends on your credit situation and needs. A personal finance advisor can help you answer this question in your specific case.

Michelle Brooks

Michelle Brooks

Financial Advisor - Best.CreditCard

Michelle is part of our expert team of financial advisors with a proven track record in the credit card industry. After graduating with an Economics Degree focusing on Personal Finance, she got involved with several credit and debt counseling startups.