Credit cards are popular with people who live in urban centers where there are numerous banks and other financial institutions. Some people in rural areas may also have cards if they frequently visit towns to do financial transactions. Credit card issuers prefer issuing credit cards to people with fair to excellent credit scores. However, if you happen to fall in the bad credit category when you had a good score before, you can get a second chance credit card with no security deposit and continue enjoying credit card services.
Second chance credit cards come with lower benefits than the credit cards for people with fair credits. For instance, a second chance credit card has a low credit limit compared to the regular credit card. Moreover, most second chance credit card issuers require you to deposit money before giving you a credit card. We call such credit cards secured. Secured credit cards allow you to borrow against your deposit, whereby you can borrow a certain percentage of your deposit or borrow an amount equal to your deposit.
When getting a credit card, you need a checking account. Before getting a second chance credit card, you need to open a second chance checking account. You can look for a second chance checking with no opening deposit so that you can have a smooth start. However, such an account will charge high interest on your credit card debt. The card associated with such an account is called an unsecured credit card. Moreover, the credit cards have a lower limit than the secured credit cards and require credit history.
Why do you need a second chance credit card?
We all know that every individual’s financial stability depends on banking institutions as they offer loans and credits for various developments that are necessary to our lives. Sometimes you can mess up financially by defaulting credit card payments or making late payments in a given time. I
t may reach a point that your bank denies you a credit card due to a huge debt. In this case, you need to consider applying for a second chance checking account and a credit card.
There are free online checking accounts with no opening deposit available in various financial institutions. You will learn about them later in this article. The following are the reasons why you need a second chance credit card.
i) To improve your credit scores
A second chance credit card can help you to improve your credit score over time. As you pay your bills and also repay your credit card debts on time, you will find yourself increasing your scores slowly by slowly. However, you have to settle down all the debts that led you to the bad credit category so that you can start anew. In most cases, you end up in a lousy credit scenario when your name is listed on the credit bureau website as a defaulter.
ii) To regain trust with your bank
When you open a second chance checking account with your bank, then you slowly improve your relationship with your bank to the extent that they can trust you with loans and more significant lines of credits. You can quickly graduate form a secured credit card to an unsecured credit card and get your deposit back.
To be able to carry out transactions
We all know that credit cards are useful when shopping either online or at physical stores. You will realize that a credit card makes it convenient to pay for goods and services remotely. When you do not have cash, you can use your credit card to pay for goods and services.
Besides using your credit card to buy goods and services, you need it to send money to your loved ones. With a smartphone and an app from your bank, you can send money from your checking account instantly to people in different parts of the world.
What are the disadvantages of a bad credit score?
Bad credit is pathetic and can easily make your financial position very bad. When you fall into the bad credit category, you will find it rough with banks. People with bad credit scores will face the following issues.
a) High-interest rates on loans and credit cards
If you have a bad credit score, you can get an instant credit card approval for bad credit with no deposit. However, the rates are very high, and you will find it challenging to use it due to the interest charged on using the card.
Moreover, some institutions can give you loans but also impose high-interest rates on you. However, there is no need to worry about time; you can quickly regain your lost glory as long as you use your bad credit well.
b) Difficulty in securing jobs
Some employers make soft inquiries on your credit score and history. If they find that you have bad credit scores, then you may miss an opportunity. A bad credit score may portray dishonesty to some employers, although others may consider you if you give a good explanation of your credit score situation.
c) You may not get approved for credit cards and loans.
Some financial institutions take it seriously when you have bad credit and will not risk their money. It becomes challenging to get a loan or credit card in the process. However, getting a debit account is possible if you have a bad credit history. Most financial institutions allow you to open a bank account with no deposit required.
You can use the account to save money for future use or receive your salary. If you get a bank account and settle all your debts, you may start qualifying for some little loans and lines of credits until a point where you can receive bigger loans.
d) Higher insurance premiums
In life, you need to insure your health, business, car, and so on from uncertainties that arise in life. If you have bad credit, you may succeed in getting insurance but with high rates, thus making life difficult.
Can I open a bank account with bad credit?
There are banks with free checking accounts with no deposit despite your credit score. Most of these accounts are debit accounts. However, as I mentioned earlier, you can get a checking account with bad credit, although the interest rates are high in unsecured credit card accounts. Secured credit card accounts, as well as debit accounts, are easy to get.
Which are the top 9 second chance credit cards with no security deposit?
They include the following.
1) Fingerhut Credit Account
The card is easy to apply, and in a few minutes, you can get the application feedback. Moreover, the card can help you build your credit score within a given time if you utilize it well. The company reports to the three credit bureaus every month, and you can be sure that your financial activities will always go on record.
Also, the card does not require you to pay an annual fee whatsoever; again, it has an APR of 25.40%. The card has a reputation score of 9/10. You can be sure to get the best out of it. Apply here.
2) Total Visa® Card
Like any other credit card, the Total Visa Card requires you to have a checking account to get the card. Besides, the card is easy to apply and takes a short time. Furthermore, it is accepted by many merchants across the US. The monthly payments are easy to manage since the interest rate is easy to pay.
The card gives you a $300 credit limit upon getting the card. The limit is subject to your current credit scores meaning that you may get a lower limit depending on your scores. The card issuer also reports your financial transactions to the credit bureaus. Apply here.
3) First Access Visa® Card
The card will help you improve your scores as it reports to the major credit bureaus every month. So be sure that your financial transactions will all be on the record. You should create a checking account first before getting the card. The application of the card is purely online and takes a short time.
You will get a credit limit of up to $300 upon qualifying to get the card. To apply for the card, you can visit the Bank of Missouri as it is the owner of the card. You can apply for the card online. Apply here.
4) Milestone® Mastercard®
You can check whether you qualify for the credit card without affecting your scores in any way. It requires less than perfect credit scores. Moreover, you can easily allow mobile access to the account any time you feel like. Again, the card has high protection from fraud. You should not worry if your card gets lost.
Like many other credit card issuers, the card issuer reports to the credit bureaus every month, and thus your credit score will increase if you utilize the card effectively. The annual fee for the card ranges from $35 – $99. The regular APR is 24.9%. Apply here.
5) Indigo® Mastercard®
You can check whether you qualify for the card without affecting your credit scores. It accepts applicants with poor credit cards to apply. You can also access it anytime with your smartphone. Furthermore, you are sure of growing your credit history since the card issuer reports to the three credit bureaus every month.
Another advantage of having this card is that it has high fraud protection. If you lose the card, you can get a replacement with time. Moreover, you will not incur any charges if someone uses the card fraudulently upon losing it. Apply here.
6) Capital One QuicksilverOne
The card accepts even people with bad credit scores. You can be sure that you will improve your credit scores with time. Moreover, the card will earn you an unlimited cashback of 1.5% on all purchases you make using it. Again, the card has 0% introductory APR on procurement for all new cardholders.
The card has no balance transfer fee. Moreover, you will not incur any foreign transaction fees. In addition, the card has a standard variable APR of 23.24%. It charges an annual fee of $39. Apply here.
7) Credit One bank ® Unsecured Platinum Visa®
If you want to build your credit history, then you can consider this credit card. The card is easy to apply online, and it takes a few minutes to carry out the process. Pre-qualify without affecting your credit scores. You will also benefit from a 1% rebate on all qualifying purchases once you get the card.
Moreover, the card has an APR ranging from 15.65% to 24.15%, and the annual fee ranges from $0 to $99. Unfortunately, the card has no introductory purchase APR offer. Get the card now and straighten your credit history. Apply here.
8) First Premier Credit Card
It does not matter which credit scores you have as this card is suitable for all credit scores. People with poor credit scores can apply to build their credit scores to improve with time. The application process is fast and happens online.
However, the credit card attracts high APR rates. The card also attracts a processing fee before getting the card. Apply for the card today and start enjoying the benefits. Apply now.
9) Surge Mastercard® Credit Card
Get the card today, irrespective of your credit score. You can pre-qualify without affecting your credit scores. The issuer reports your card usage records to the three credit bureaus, and you can be sure that you are going to improve your credit scores within a short time.
The application of the card is online and takes a very short time. The card does not have purchases in the Intro APR. Moreover, it does not have balance transfers intro APR. The annual fee is $75.00 to $99.00. The APR rates range from 25.90% – 29.99%. Apply here.
A second chance credit card is an excellent option if you want to regain your credit scores and start enjoying high credit limits and loans. Credit cards with no deposit required are good since you do not need to deposit any amount of money to get the card.
The only disadvantage with second chance credit cards with no deposit required is that they charge high-interest rates, and the limits are generally low. With time, you can quickly increase your scores and get higher limits.