A credit card refers to a payment card given to cardholders(users) to help them pay a merchant for goods and services following a promise by the holder to the card issuer to pay for the amounts and other agreed charges. Luckily, there are high limit credit cards for bad credit that encourages people with bad or no credit history to rebuild their credit reputation.
However, the transaction between the two parties usually involves a revolving account and a line of credit issued to the cardholder for which money can be borrowed as a cash advance or for payment of goods and services to a merchant. Do you have a bad credit history? That’s right. When you secure the right credit card, you can rebuild your credit in just a few months. Believe it or not, one of the best and fastest ways to improve creditworthiness is by using credit cards.
According to research conducted by the credit bureau Experian, almost 16% of consumers have a bad credit score. Additionally, more than a third of the U.S. population has what lenders term as a subprime score that entails fair and bad categories. You can’t precisely predict a credit limit, but you can look at the averages. There are credit cards with 5000 limits with bad credit that can help you boost your credit score each month.
What causes bad credit?
i) Untimely payments
It’s important to note that your payment history reflects about 35% of your credit score. If you have a habit of making your payments late for mortgages, credit cards, or student cards, your credit score will ultimately be bad.
ii) Loan defaults or credit card
Failing to clear your credit card bills or repay a loan renders one a credit risk to lenders. If your creditworthiness is in doubt, or your past credit history is weak, you are likely to have bad credit.
Your assets and savings can become seized to settle off your liabilities and debts, which results in bankruptcy, of which it’s a credit score threat, which should only get available as a last resort. If you are declared bankrupt, then automatically qualify to have bad credit.
If a court of law orders you to pay off your debt, the judgement shows lenders that the court system forced you to settle your debts. However, if you fail to honor the decision, it can adversely affect your credit reputation as unpaid judgement is worse than a paid judgement.
v) Charge offs
Credit cards usually involve third parties in making payments. If a creditor decides you have no will to pay back your debt and stops collection attempts, your account will become charged off, resulting in a bad credit title.
What Are the Ways You Can Use to Fix Bad Credit?
There are free credit reports available at annual credit report that can help you access your credit score once a year. Also, you can observe the following measures to ensure that you improve on your credit;
1. Make timely payments
Paying your debts timely is one of the resourceful factors to your credit score. when you have a habit of forgetting, set alerts and reminders to help you keep up with your payment’s timeline or, better yet, set up automatic payments measure.
2. Maintain your balances minimally
You can achieve the above by avoiding unnecessary spending and paying down outstanding balances to keep your credit utilization low. Alternatively, you can consider making early payments to lower your utilization.
3. Keep your old accounts active.
It’s advisable to keep a small recurring automatic charge on your old card, even if you are no longer using it again. Perhaps, a fact about having bad credit is that it can get expensive; hence don’t push yourself into such a difficult situation.
What Are the Types of Credit Cards for Bad Credit?
a) Secured credit cards
If you are hunting for a high-limit card and have bad credit, a secured credit card is the perfect choice for you. Most creditors don’t trust customers with poor credit history; hence they give a lower credit limit to lower the risk to the issuer.
Fortunately, several secured credit cards offer decent limits with no annual charges and savings to add on your deposit for an even higher threshold. However, secured cards need a cash deposit that acts as collateral for the credit line.
b) Unsecured Credit Cards
Whether you are a consumer, a bank, or a corporation, there are no lenders who want to give out their money over to a person they can’t trust. This reason is the cause of the credit scoring system and why individuals with low credit scores find it hectic accessing loans and credit cards.
However, unsecured credit is the most difficult card to obtain. While some card issuers do offer unsecured subprime credit cards, they have to spread that risk somewhere. In this case, it means you’re not likely to find high-limit credit cards without a deposit or some other restrictions.
What Are The 9 Best High Limit Credits Cards for Bad Credit?
1) Ink Business Preferred Credit Card
Most small businesses use charge cards with no preset spending limit that leads to unbalanced purchasing power following their spending habits. However, Ink Business Preferred Credit Card is a suitable tool for small businesses looking for a high credit limit. If your small business is struggling with charge cards, the Ink Business Preferred Credit Card is one of the small business credit cards for bad credit.
In this case, the cardholders report a minimum credit line of $5,000 and its outstanding rewards. The card’s initial credit line will make it easier for your business to achieve the card’s sign-up bonus that you can earn 100,000 bonus points after you spend $15,000 on purchases in the first three months after account opening.
2) First Progress Platinum Prestige Mastercard
If you apply for this secured credit card, there is no credit history or minimum credit score for approval. However, the card has 9.99% APR fees and $49 annual fees that make it unique over the secured card lot. The first progress credit line range starts with a minimum deposit of $200 for a $200 credit line.
For a higher credit line, approved cardholders can deposit up to $2000. Otherwise, the size of the deposit amount provided by the holder determines the size of the credit line that will be offered by the card issuer.
Interestingly, there is monthly reporting to all three major credit bureaus in the U.S. to establish a credit history. When your credit improves, this card is not upgradable to a secured card, so you will be required to cancel the card and apply for a new card. However, the cards deposit made at the time of application is fully refundable like any other secured card.
3) Credit One Bank Unsecured Visa Card for Rebuilding Credit
The credit limits with this card are incredibly variable, starting from a minimum of $300 up to a maximum of $3,000. The exact credit limit you get will depend primarily on your credit history, although your income levels may also factor into decision-making.
Hence, the Credit One Bank Unsecured Visa Card is one of the credit cards for bad credit with no deposit. However, accounts get periodically reviewed for automatic credit line increases. You don’t likely witness unauthorized charges with $0 Fraud Liability. On the other hand, several aspects of this card are also highly variable based on your creditworthiness, including your APR and annual fee.
The interest rates range between 17.99% – 23.99% and its variable. Additionally, the type of benefits you can earn may also depend on your credit profile. You can get 1% cashback rewards automatically for eligible purchases, terms apply.
4) OpenSky Secured Visa Credit Card
OpenSky credit card gets issued by the capital bank and believes in offering an opportunity to everyone with no credit check needed for the application. The credit deposit starts as low as $200, which becomes your credit line limit on your visa card. The credit history becomes built within less than 6 months based on the credit score generated by the three major credit bureaus.
Moreover, the regular APR charges are 17.39% (variable), and the annual fees stand at $35 annually. Your credit limit varies depending on the amount of security deposit you collateralize, and cardholders can request a limit increment anytime.
5) U.S Bank Secured Visa Card
U.S Bank Secured Visa Card requires a deposit of $300 for you to open an account. For applicants who need a higher credit limit, you can deposit up to $5000 for a credit size of an equal amount upon successful applications. For this reason, U.S. Bank Secured Visa Card is one of the credit cards for fair credit with high limits. Besides, the deposit earns interest in a secured savings account, and a fee of $29 is payable annually.
Most importantly, unlike some secured cards, the deposit you make for this card upon application doesn’t just sit idle in the account. Instead, the deposit is transferable into a U.S. Bank secured savings account, where it earns interest as long as your account remains active and in good standing.
6) Discover It Secured Credit Card.
If you want a secured credit card with the highest credit limit, you can get the Discover it Secured credit card. This credit card necessitates a security deposit of between $200 -$2500. However, there are no foreign transaction or annual fees, but there is some APR fee applicable.
Interestingly, you will earn some rewards a rare feature in most secured cards. You receive 2% cashback at Restaurants and Gas stations, up to $1,000 spent every quarter.
Furthermore, Discover it Secured credit card will review your card account and your credit periodically, after every eight months. If the statement reflects responsible credit use, Discover may return your deposit and let you keep using the account with no security deposit.
7) Capital One Secured Master Card
Do you have a limited lousy credit score? Capital One Secured is our top choice for people who are looking for a high credit limit. However, many credit cards will eventually provide you with a more upper credit line after making a history of on-time payments.
So, this card can increase your credit score and, consequently, enhance your card’s limit through proper use. While most secured cards offer credit limits that equals the card’s required security deposit, the Capital One® Secured Mastercard® can offer an oversized limit regardless of the provided security deposit.
For instance, a $49 refundable security deposit could get you a $200 initial credit line. In other words, there’s no other credit card that will offer you more for less. It provides only up to $1,000 with a matching deposit, has no annual fee, and is upgradable.
8) Total Visa Card
This card is a genuine Visa credit card acceptable by merchants nationwide across the U.S. and online retail stores. It reports monthly to all three major credit bureaus, and the monthly payments are manageable. However, it’s somewhat indicative of the typical unsecured subprime credit card as far as its limits are concerned. It provides the same flat $300 credit limit to all successful applicants, regardless of other factors. Total Visa card is the best-unsecured credit card for 500 credit score.
Besides, the limit will be subject to availability, meaning charges, like the program fee or annual fee, and lowers the available credit. Generally, the small limit on most unsecured subprime credit cards is to minimize the potential risk for the issuer. A low limit means less money is on the line should the cardholder default on balance.
9) Fingerhut Credit Account
In most ways, a Fingerhut Credit Account features one of the free virtual credit cards with no deposit. The application process is easy, and there is no access to a physical card. However, the Fingerhut Credit Account can only get used for Fingerhut purchases.
On the other side, this restriction means consumers with low scores may qualify for a relatively sizeable unsecured credit line. Moreover, some reviews reveal that users have gotten credit lines of up to $2,000 with no deposit.
Plus, cardholders don’t need to pay an annual fee, a rare phenomenon for an unsecured credit line when you have bad credit. Interestingly, you can use your credit line to shop thousands of items from great brands like Samsung, KitchenAid, and DeWalt.
If you have a bad credit history, your FICO credit score lies between $300-$579. In most cases, creditors don’t trust people with doubtful credit histories to pay back their debt. Therefore, there are many best high-limit credit cards discussed in this article that help such individuals rebuild their credit score and access revolving cash to help them make payments. Before making any purchases, you can visit the issuer’s website and learn more about their specific credit cards’ terms and conditions.