There are two main types of credit cards. We have secured and unsecured credit cards. Secured credit cards require you to deposit some amount of money to act as security at the time of application. Unsecured credit cards do not require you to deposit any amount of money as security. Although unsecured credit cards are common for people with good credit, it is possible to get unsecured credit cards for bad credit with no deposit.
According to FICO, bad credit scores range between 300-600. 300- 499 is regarded as very poor while the 500-600 range is poor. If you have credit scores of 601 and above, then you stand a better chance to get a line of credit or a loan with friendly terms. Such scores indicate that you are responsible and can pay back any borrowed amount on the due date. FICO scores range from 300-850.
Bad credit cards are meant to help the beneficiaries to improve their scores within a given time. This is possible if you make the proper utilization of the card. Both secured and unsecured credit cards have equal capabilities to help in improving your credit scores. However, unsecured credit cards with bad credit offer low credit limits as there are a lot of risks associated with them.
What leads to bad credit?
Various practices can lead you to a bad credit situation. For instance, the late payment of debts contributes greatly to low credit scores. It is always good to observe the due date to ensure you maintain a good reputation with your lenders.
In addition, too much use of your credit can reduce your credit score. Your credit utilization ratio should never go above 30%. Some people tend to use their credit up to almost 100% and that shows that you are irresponsible as far as managing your finances are concerned.
Another contributor to bad credit scores is having a dormant credit card. If you do not utilize your credit card, then it will affect your scores negatively. You should at least utilize 4% of your credit limit every month. This will keep your issuer on toes to report your card usage to the credit bureaus.
Hard inquiries also temporarily affect your credit scores. For example, if you need an instant credit card approval for bad credit with no deposit, your issuer may inquire about your credit scores from the credit bureaus to make an informed decision on the card to give you. Inquiries about your credit history from the credit bureaus by the lending institutions are termed as hard inquiries.
Why should you have a credit card?
Credit cards are wonderful payment cards that everyone should embrace. First, credit cards help you to increase your credit scores with time so long as you utilize them well. This enables you to easily qualify for loans. If you apply for an unsecured personal loan from a credit union, your issuer may have to check your credit history before giving you the loan.
Another importance of having a credit card is the convenience associated with the card. Most shopping centers accept both cash and card payments. If you have a credit card, you don’t need to look for an ATM to withdraw some shopping money but just pay with your credit card.
Moreover, credit cards protect us from fraud. If you have a credit card and someone steals it from you, you are not liable for any transaction the thief carries out with the card. The responsibility lies with the issuer. If someone uses your debit or prepaid card fraudulently, you lose your money.
Also, some credit cards come with reward points and cash backs. Card issuers appreciate your loyalty of being their customer and thus the more you use your card, the more they reward you.
Who can apply for a credit card?
If you are an adult with a national identity card, Social Security Number, and a steady income, then you can apply for a credit card. Most credit card issuers will need you to have a positive credit history. However, it is possible for someone with a bad credit history or without any credit history to get a credit card.
Children can also get credit cards under their parents or guardians. As a parent/guardian, you are liable for the debts. This helps your child to start building their credit history as early as possible so that by the time they are on their own, they can benefit from loans and lines of credit with friendly terms.
Can a foreigner get a credit card?
Foreigners can get credit cards depending on one’s immigration status. However, if it becomes difficult to get a credit card on your own, you can always get a credit card under someone else who qualifies for one.
Which are the 7 best-unsecured credit cards for bad credit with no deposit?
If you have been looking for an unsecured credit card for bad credit, then you are at the right place since I got seven such credit cards that do not require a deposit. Check them.
1) Wells Fargo Cash Back College
Wells Fargo Cash Back College credit card is one of the best rewards credit cards with no annual fee. The card offers 3% cash rewards for up to $2,500 you spent on drugstore purchases, gas, and grocery for the first 6 months. You will also enjoy 1% cash rewards for other purchases you make with the card. In addition, the card has 0.00% introductory APR for the first 6 months of account opening.
Apart from getting rewards, the card will help you to build a good credit score while still in college. You can apply online if you have an existing Wells Fargo relationship. Learn more.
2) Fingerhut Credit Account
The card is easy to apply and you can get a decision in seconds. Once you get the card, you can use it to shop thousands of items from brands such as Samsung, KitchenAid, and DeWalt. The card also gives you a good option to build your credit score since it reports to the major credit bureaus of the USA.
Also, the card has no annual fee and this reduces its cost of usage. It has no processing fees as well. Get the card today and start enjoying great services. Learn more
3) Indigo Mastercard
The card charges an annual fee of between $0-$99. The regular APR is 24.9%. The Prequalification of the card does not affect your credit scores. Furthermore, you will have easy access to a mobile account. The card reports to the credit bureaus and thus you are guaranteed credit score improvement as long as you use the card properly.
Interestingly, the card has high fraud protection mechanisms so that you can always make secure payments. Also, choose your favorite design from several of them without any charge. Learn more.
4) Milestone® Mastercard
Prequalify today without effect on your credit scores. You will also access your mobile account 24/7. The annual fee for the card is $35 – $99 while the regular APR is 24.9%. The annual fee depends on your credit profile. Again, you will get a 25-day grace period on new purchases once you get the card.
Moreover, be sure that you are protected from fraud when using this card and so when buying goods and services. Above all, you will be able to improve your credit scores with time since the card issuer reports to the three credit bureaus. Learn more.
5) Credit One Bank® Visa®
You can check whether you qualify for this card in less than 60 seconds. The process does not affect your credit scores either. Furthermore, you will get 1% cash back rewards on all eligible purchases such as gas, groceries, mobile phone services, internet, and cable and satellite TV. Again, the card issuer evaluates your credit card usage and you may be lucky to get an increase.
The card also gives you an opportunity to access your Experian credit score and credit report summary online for free. You can thus track your performance as time goes on. The card has zero fraud liability. Learn more
6) Total Visa® Card
Like many other cards, you will need a checking account so as to use the card. The card can give you a $300 credit limit. A credit decision happens in minutes and you do not have to wait for days. Again, you will be able to improve on your credit scores since the issuer reports to the credit bureaus which include Experian, Transunion, and Equifax.
The Total unsecured credit cards is accepted by merchants throughout the USA and online. It is thus very convenient to use for shopping as well as sending money to others. The monthly payments are manageable. Learn more.
7) First Access Visa® Card
You need a checking account to get the card. Actually, all credit cards require you to have a checking account. The card is easy to apply and takes a short time. You can apply online and get a response in less than 60 seconds. The card gives you a $300 credit limit which is subject to available credit.
If you utilize the card well, be sure that you will increase your scores with time since the issuer reports your card usage to the three credit bureaus. You can cancel the card after the first year to avoid the monthly fee that takes effect in the second year or continue with it. Learn more.
Unsecured credit cards for bad credit are the best to have since you will not pay any deposit. Moreover, you are able to build your credit score with time as long as you use the card responsibly. Children can also have credit cards but under supervision of their parents or guardian. Foreigners can also get credit cards as long as they meet the necessary criteria.