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Bad Credit

20 Credit Cards for Bad Credit (2020)

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Many consumers with low credit scores want to own credit cards for bad credit to help them manage their finances. Here are our top 20 picks representing the best balance between costs and benefits for consumers seeking the right credit card.

Use the links below to navigate to the card type you’re interested in:

Unsecured | Secured | Business | Store | Prepaid
How to Apply | FAQs

An unsecured credit card is what most people think of as a regular credit card. Most credit cards are unsecured, meaning you don’t have to put up any collateral to get an unsecured credit card.

As you can see, many unsecured cards are available to you, even if you have bad credit.

  • All credit types welcome to apply!
  • Free access to your Vantage 3.0 score From TransUnion* (When you sign up for e-statements)
  • Monthly reporting to the three major credit bureaus
  • See if you’re Pre-Qualified without impacting your credit score
  • Fast and easy application process; results in seconds
  • Free online account access 24/7

See website for Details

N/A

25.90% – 29.99%

See website for Details

Bad, Poor Credit

The Surge Mastercard® is an unsecured credit card that is a great option for anyone with less-than-perfect credit. You’ll have to provide some personal information to prequalify, including your Social Security number, whether you have an active checking account, whether you intend to use the card for cash advances, and the amount and primary source of your monthly income.

This unsecured credit card provides $0 fraud liability protection and the potential for earning a credit limit increase when you make your first six monthly payments on time.

BAD CREDIT RATING

★★★★★

4.7

  • Pre-qualifying today will not affect your credit score
  • Less than perfect credit histories can qualify, even with prior bankruptcy!
  • Mobile friendly online access from anywhere
  • Fraud protection for stolen or lost cards
  • Account history is reported to the three major credit bureaus in the U.S.

N/A

N/A

24.9%

$0 – $99

Fair/Good

The Indigo® Unsecured Mastercard® – Prior Bankruptcy is Okay markets to consumers who have an imperfect credit rating. You can quickly enter information to prequalify for the card, and you’ll receive an approval decision within a minute.

Your credit rating determines your annual fee. You may select from a roster of five card designs for free. If Indigo can’t match you to one of its cards, it may recommend you apply to a selected credit card from another issuer.

BAD CREDIT RATING

★★★★★

4.5

  • Prequalify for a card today and it will not impact your credit score
  • Less than perfect credit is okay
  • Mobile account access at any time
  • Protection from fraud if your card is stolen
  • Account history is reported to the three major credit bureaus in the U.S.

  • *Dependent on credit worthiness

N/A

N/A

24.9%

$35 – $99

Bad, Poor Credit

The Milestone® Mastercard® – Less Than Perfect Credit Considered makes the application process easy by allowing you to prequalify for this subprime credit card by entering just a few data items. Unlike some of its competitors, this card does not charge one-time or monthly fees, although you will be billed an annual fee that is based on your creditworthiness.

The card also waives the cash advance fee for the first year. You get ID theft and liability protection at no extra charge.

BAD CREDIT RATING

★★★★★

4.5

  • Checking Account Required
  • Fast and easy application process; response provided in seconds
  • A genuine Visa credit card accepted by merchants nationwide across the USA and online
  • Manageable monthly payments
  • $300 credit limit (subject to available credit)
  • Reports monthly to all three major credit bureaus

N/A

N/A

See Terms

See Terms

Fair, Bad Credit

The Total Visa® Card is the less-than-perfect credit card for consumers with less-than-perfect credit. To get and use this card, be prepared to pay a one-time program fee, an annual fee, and starting in year two, a monthly servicing fee, and a cash advance fee.

You may be offered a credit line boost after the first year, but, you guessed it, you’ll be charged a fee based on the increased amount. On the plus side, you can get this card even if you have really bad credit.

BAD CREDIT RATING

★★★★

4.4

  • Pre-qualify for a card today and it will not impact your credit score
  • Less than perfect credit is okay
  • Mobile account access at any time
  • Fraud protection for stolen or lost cards
  • Account history is reported to the three major credit bureaus in the U.S.

N/A

N/A

24.9%

$0 – $99

Bad, Poor Credit

The Indigo® Mastercard® for Less than Perfect Credit is part of the Indigo® card trio available to consumers with bad credit. It’s not clear which one you’ll be offered until you prequalify and apply for the card.

The major difference distinguishing the three cards is how much you’ll pay in annual fees, which depends on your credit profile. The card charges no initial or monthly processing fees, and cash advances don’t trigger a fee during the first year.

BAD CREDIT RATING

★★★★

4.3

  • Checking Account Required
  • Reporting monthly to all three major credit reporting agencies
  • Perfect credit not required for approval; we may approve you when others won’t
  • Easy and secure online application
  • $300 credit limit (subject to available credit)
  • The First Access Visa Card is issued by The Bank of Missouri pursuant to a license from Visa U.S.A. Inc.

N/A

N/A

See Terms

See Terms

Bad Credit

You can apply for a First Access Visa® Card and receive a decision in a minute or less. But before you rush in, make sure you understand that you’ll pay an initial program fee and an annual fee, as well as cash advance, credit line increase, and monthly servicing fees after the first year.

You can select a card from a palette of six designs that includes a kitty cat, an American flag, and a sunflower.

BAD CREDIT RATING

★★★★

4.3

  • Seeing if you Pre-Qualify is fast, easy, and secure
  • Get 1% cash back rewards on eligible purchase, terms apply
  • Rewards post automatically to your account each month
  • Automatic reviews for credit line increase opportunities
  • With $0 Fraud Liability, you won’t be responsible for unauthorized charges
  • Pick a card that fits your style. Multiple card designs are available, a fee may apply

N/A

N/A

17.99% to 23.99% Variable

$0 – $99

Poor

The Credit One Bank® Unsecured Visa® with Cash Back Rewards is the only card in this review that offers cash back rewards. The card lets you customize your notifications, reminders, and alerts.

It also gives you free online access to your Experian credit score and allows you to choose your monthly payment due date. An annual fee may apply, depending on your creditworthiness.

Secured credit cards require you to deposit cash into a locked account as collateral. In return, you can expect fees and rates lower than those for similar unsecured cards.

SECURED RATING

★★★★

4.0

  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.

N/A

N/A

17.39% (variable)

$35

Poor

The OpenSky® Secured Visa® Credit Card lets you choose your credit line by requiring a matching security deposit. Unlike some other secured credit cards, you don’t need to have a bank account to get this card. But don’t worry, your deposit will be FDIC-insured.

This card doesn’t subject you to a credit check, making it a great choice if you’ve got a really low credit score. This secured credit card charges a relatively low annual fee.

SECURED RATING

★★★★

3.9

  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • No Credit History or Minimum Credit Score Required for Approval
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Credit Line Secured by Your Fully-Refundable Deposit of $200 — $2,000 Submitted with Application
  • Nationwide Program though not yet available in NY, IA, AR, or WI *See Card Terms.
  • Apply in just a few moments with no negative impact to your credit score; no credit inquiry will be recorded in your credit bureau file

N/A

N/A

9.99% (V)

$49

Bad / No Credit

Would you pay a few extra dollars in an annual fee to get the lowest APR and cash advance fee in this merry trio of First Progress cards? If the answer is yes, go for the First Progress Platinum Prestige MasterCard® Secured Credit Card.

If you regularly stretch out your payments over several months, the money you save on interest could easily dwarf the small increment of an annual fee. All three cards are easy to obtain, just fork over your security deposit, and you’re good to go.

SECURED RATING

★★★★

3.8

  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application
  • Full-Feature Platinum MasterCard® Secured Credit Card
  • Nationwide Program though not yet available in NY, IA, AR, or WI *See Card Terms.

N/A

N/A

19.99% (V)

$29

Poor/Limited/No Credit

If every dollar you spend on annual fees pains you, choose The First Progress Platinum Elite MasterCard® Secured Credit Card from this trio of cards because it has the lowest annual fee among the lot. However, be prepared to pay the highest APR and cash advance fee in the group.

If you regularly pay off your balance and seldom take cash advances, this is the First Progress card that may suit you best.

SECURED RATING

★★★★

3.8

  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application
  • Full-Feature Platinum Mastercard® Secured Credit Card
  • Good for Car Rental, Hotels; Anywhere Credit Cards Are Accepted!

N/A

N/A

13.99% (V)

$39

Poor/Limited/No Credit

If the First Progress trio of credit cards were the three bowls of porridge in front of Goldilocks, the First Progress Platinum Select MasterCard® Secured Credit Card would be the one that’s “just right.” That’s because its APR, cash advance fee, and annual fee are intermediate among those offered by the other two cards.

As with the other two, this card doesn’t check your credit score or history when you apply.

There is no reason why you can’t own a business credit card just because you have bad credit. The three business cards reviewed here are all secured, so don’t fret about those old credit problems.

SECURED RATING

★★★★

4.0

  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.

N/A

N/A

17.39% (variable)

$35

Poor

It takes only five minutes to negotiate the four-step application process for the OpenSky® Secured Visa® Credit Card. If you are new to the world of credit, you’ll be heartened to know that 99% of the holders of this card were able to build their credit scores within six months.

As a true Visa® card, you get several benefits, including fraud protection and worldwide acceptance.

13. Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card

The Wells Fargo Business Secured Credit Card allows you to establish a credit line of between $500 and $25,000 by depositing an equivalent security amount. The card offers cash back rewards and $0 liability protection while charging a relatively small annual fee.

You can get up to 10 employee cards for free and receive spending reports online. The card charges no foreign transaction fee.

14. BBVA Compass Business Secured Visa® Card

BBVA Secured Visa® Business Credit Card

The BBVA Compass Business Secured Visa® Card is available in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas. You can get the card with a minimum opening deposit of $500, with 90% available as credit.

The annual fee is waived for the first year, and employee cards are free. You get online account services such as employee expense tracking, bills payment, downloadable past account statements, and integration with accounting software.

Store credit cards are among the easiest unsecured cards to obtain, even with poor credit. You can use them for purchases at the issuing store and its affiliates.

BAD CREDIT RATING

★★★★

4.3

  • Easy application! Get a credit decision in seconds.
  • Build your credit history – Fingerhut reports to all 3 major credit bureaus
  • Use your line of credit to shop thousands of items from great brands like Samsung, KitchenAid, and DeWalt
  • Not an access card

N/A

N/A

See Issuers Website

$0

Poor Credit

The Fingerhut Credit Account lets you charge purchases from the Fingerhut online marketplace. The account is a good way to build or rebuild your credit, as it reports your activity to the three major credit bureaus.

Even if you don’t qualify for the account, Fingerhut may approve you for its Fresh Start Installment Loan. The credit account charges no annual fee and frequently offers special promotions.

16. Amazon.com Store Card

Amazon.com Store Card

The Amazon.com Store Card lets you charge items when you shop online at Amazon.com. You must have an Amazon account to get this card. If you happen to be an Amazon Prime Member, you’ll also get 5% cash back on your orders.

However, you can substitute promotional financing for cash back on eligible purchases, thereby letting you avoid interest if you pay off the balance during the promotional period. The card charges no annual fee.

17. Target RedCard™

Target RedCard™

If you shop at Target, you really should own a Target RedCard™, as it saves you 5% on your in-store and online purchases (10% on your anniversary). You get free shipping on most online items, an additional 30 days to return items, and access to exclusive special offers.

And if you need a little pick-me-up while shopping, you can use your card at the in-store Starbucks and save 5%.

Prepaid credit cards are more like a replenishable debit card. You can spend as much money as you load onto the card at any place that accepts Visa (for Netspend) or Mastercard (for PayPal) debit cards.

BAD CREDIT RATING

★★★★★

4.6

  • With Netspend Direct Deposit, you can get paid faster than a paper check.
  • No late fees or interest charges because this is not a credit card.
  • No Overdraft Fees on purchases using your card.
  • Use the NetSpend Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply).
  • Card issued by MetaBank®, Member FDIC. Card may be used everywhere Visa Debit cards are accepted. Click “Get My Card ” for full details.
  • See additional NetSpend® Prepaid Visa® details.

N/A

N/A

N/A

Up-to $9.95 monthly

Not applicable

The NetSpend® Visa® Prepaid Card likes to say no to its customers: No minimum balance, no credit check, no activation fee. And it says yes to nifty features like mobile check load, in which you take a few pictures on your cellphone to load checks onto your card.

You can customize your card with a family photo or other image, and you can receive Anytime Alerts™ for activity notifications.

BAD CREDIT RATING

★★★★

4.4

  • With Netspend Direct Deposit, you can get paid faster than a paper check.
  • No late fees or interest charges because this is not a credit card.
  • No Overdraft Fees on purchases using your card.
  • Use the NetSpend Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply).
  • Card issued by MetaBank®, Member FDIC. Card may be used everywhere Visa Debit cards are accepted. Click “Get My Card” for full details.
  • See additional NetSpend® Prepaid Visa® details.

N/A

N/A

N/A

Variable Monthly Fee

Not applicable

This NetSpend® Visa® Prepaid Card offers the Pay-As-You-Go Plan, in which you pay a transaction fee for each purchase, or a flat-fee Monthly Plan. You can cut that monthly fee in half if the account receives at least $500 in direct deposits for at least one month.

Another available option is Purchase Cushion, which can give you up to $10 of overdraft protection.

BAD CREDIT RATING

★★★★

4.4

  • Move money from your PayPal account to fund your prepaid card account.
  • Earn cash back and personalized offers, just for using your card.
  • With Direct Deposit, you can get paid faster than a paper check.
  • Card issued by The Bancorp Bank, Member FDIC. Card may be used everywhere Debit Mastercard is accepted.
  • Click PayPal Prepaid Mastercard® for additional features & program details, and to request a Card.

N/A

N/A

N/A

Variable Monthly Fee

Not applicable

If you use PayPal to send and receive money, you’ll enjoy the convenience of transferring money to load your PayPal Prepaid Mastercard®. And speaking of convenience, you can reload your card at more than 130,000 locations in the U.S.

In addition, cardholders can open a free, no-minimum-balance savings account at Bancorp Bank. The card is available in red, blue, plum, or white.

If your credit is bad, you can assume that credit card issuers will be cautious when they receive your application. In fact, issuers of unsecured cards may ask you to prequalify first, which is a good deal for you because it doesn’t require a hard pull (i.e., an inquiry that can reduce your credit score) of your credit report, which occurs when you apply after prequalifying.

You’ll have to cough up some personal information when you ask for prequalification, including items like your income sources, how much you bring home each month, and other responses to nosy questions. The full application may go on to inquire about your housing costs and other debts. Some cards require a minimum credit score, others don’t.

If you are intent on getting an unsecured card rather than a secured one, expect to pay high fees and a high interest rate, while being restricted to a low credit limit (frequently $300 less any upfront fees).

Sometimes, you can improve your credit score just enough to allow you to qualify for an unsecured card. Here are some tips to boost your score quickly:

  • Check your credit reports for any errors. You can get a free credit report from each major credit bureau (Equifax, Experian, and TransUnion) at AnnualCreditReport.com. You can contact a credit bureau to request the removal of incorrect information that may be depressing your score. Or you can hire a credit repair company whose professionals scour your credit reports for errors.
  • Pay down any existing debts. The less you owe, the more capacity you have to take on new credit.
  • Pay your bills on time, unfailingly. A credit card company likes to see that you have a responsible attitude toward your debt.
  • Find a cosigner. A card issuer will like a cosigner, especially one who has good credit, because cosigners are on the hook if you miss payments.
  • Consider becoming an authorized user instead. As an authorized user of someone else’s card, you get to charge items without the primary obligation to repay. Of course, stiffing the card owner is a great way to ruin a relationship.

If it’s impossible to qualify for an unsecured card, consider a secured or prepaid one. The card issuer for these types of cards requires upfront cash but generally charges less in fees and interest. Best of all, the credit card company issuing this card doesn’t check your credit.

You have questions, we have answers. With a name like CardRates.com, we keep our fingers on the pulse of the market for all types of credit cards.

What is a Credit Card for Bad Credit?

A credit card for bad credit is one geared toward folks with a bad credit score looking to build credit. According to Experian, FICO scores (which run between 300 and 850) below 670 are “bad.”

This range consists of “fair” (580 – 669) and “poor” (300 -579) scores. If you have a low credit score that is in this range, you’ve experienced some financial problems in the past.

FICO Score® Ranges

The unsecured cards reviewed here understand that your creditworthiness is in question. Nonetheless, they are willing to accept many consumers with bad credit, albeit at a steep price.

Look for these cards to impose several substantial fees, although they may waive some fees for the first year. Additionally, credit lines on these cards are tight, often $300 minus any upfront fees.

Alternatively, you may want to start with a store credit card. These unsecured cards are easy to get and seldom charge fees. They are a good way to build credit if you don’t have any, or to start repairing a bad credit score. Unfortunately, their range is limited to shopping at the issuing stores and their affiliates.

Naturally, the best way to reduce the cost of credit is to raise your credit score. But until you can do so, you may want to consider a secured or prepaid credit card, as these don’t care about your financial history.

However, bear in mind that a prepaid card isn’t building credit because it does not report to the credit bureaus.

What Credit Score Do I Need to Get a Credit Card?

Strictly speaking, there is no minimum credit score required to obtain a credit card, but low scores drastically reduce the number of cards eligible to you. Secured and prepaid cards don’t check credit scores, so they are available to anyone with the money for a cash deposit.

However, prepaid cards won’t build your credit score, whereas secured cards are a great tool to establish or build credit. If you’re new to credit and don’t have a score yet, a secured card may be your best bet.

The gateway unsecured cards in this review, led by the top-rated Surge Mastercard® subprime card, allow you to prequalify before you apply, meaning that they will not do a hard credit pull unless you are considered eligible to apply.

In other words, you have nothing to lose by submitting the prequalification questionnaire, even if your score is 300. You’ll find with these cards that sometimes a verifiable income outweighs a low score.

We call these cards “gateway” because they can get you started on the road to a higher credit score through their reporting to the three major credit bureaus (Experian, TransUnion, and Equifax). By paying on time, you can slowly climb Score Mountain and trade up to a less expensive, more rewarding credit card.

What is the Easiest Store Credit Card to Get?

All three of the reviewed store cards are easy to get, but the Fingerhut Credit Account is the easiest. This account provides a limited amount of credit to shop at a Fingerhut online store or affiliate.

BAD CREDIT RATING

★★★★

4.3

  • Easy application! Get a credit decision in seconds.
  • Build your credit history – Fingerhut reports to all 3 major credit bureaus
  • Use your line of credit to shop thousands of items from great brands like Samsung, KitchenAid, and DeWalt
  • Not an access card

N/A

N/A

See Issuers Website

$0

Poor Credit

Although the account doesn’t charge an annual fee, it can wallop you with hefty late and returned payment fees.

The account has a couple of provisions to help you qualify even with bad credit. The first is that Fingerhut may ask you for a down payment to qualify for the Credit Account.

Alternatively, Fingerhut may approve you for a FreshStart Installment Loan instead of the Credit Account. To get the loan, you must order at least $50 in goods and make a $30 down payment. You then make up to six monthly payments to retire your balance, after which you may graduate to the Credit Account.

Here’s a tip: Don’t pay off the installment loan right away. Fingerhut prefers to see at least one monthly payment to consider you for the Credit Account. Also, make sure you don’t make any late payments because that will derail your efforts to obtain the Credit Account.

If you are a fan of Amazon but you have bad credit, you may want to consider the secured Amazon.com Credit Builder Card. Like all Amazon credit cards, this one is issued by Synchrony Bank. Because it is a secured card, it is easier to obtain than is the Amazon.com Store Card.

The Credit Builder Card comes in both regular and Prime versions, both of which can serve as the gateway to the unsecured Amazon.com Store Card. In fact, Synchrony Bank will start considering you for an upgrade to an unsecured card as soon as seven months after you open a Credit Builder account.

To qualify for the upgrade, your credit score must be acceptable to the bank, you must pay your Amazon bill on time each month, and you must pay on time all your other bills during the period. The bank will also confirm that you haven’t had any recent collections, delinquencies, repossessions, bankruptcies, or foreclosures.

If you receive an upgrade to the Amazon.com Store Card, your security deposit will be refunded, and your new account number will be placed in your Amazon Wallet. Since the upgrade will not require a new hard pull of your credit history, your credit score will not suffer.

If you are already a Prime member or are considering becoming one, remember that you get 5% cash back on all your Amazon purchases made on the card.

Which Credit Cards Give You Instant Approval?

Virtually all the credit cards in this review will let you know your approval status online within minutes. However, only the prepaid cards provide guaranteed approval. That’s not surprising since you are depositing money with the issuer to cover your purchases.

The NetSpend® Visa® Prepaid Card rates highest among the prepaid cards, due to its flexible fee structure. You can pay as you go, which tacks on a small fee with each use of the card.

Alternatively, you can pay a fixed monthly charge for unlimited use of the card. Furthermore, arrange just one direct deposit of $500 or more to the card and your monthly fee will be sliced in half from that point forward.

BAD CREDIT RATING

★★★★★

4.6

  • With Netspend Direct Deposit, you can get paid faster than a paper check.
  • No late fees or interest charges because this is not a credit card.
  • No Overdraft Fees on purchases using your card.
  • Use the NetSpend Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply).
  • Card issued by MetaBank®, Member FDIC. Card may be used everywhere Visa Debit cards are accepted. Click “Get My Card ” for full details.
  • See additional NetSpend® Prepaid Visa® details.

N/A

N/A

N/A

Up-to $9.95 monthly

Not applicable

The PayPal Prepaid Mastercard® is a good choice if you regularly use PayPal to transfer money. Many freelancers use PayPal to get paid for their work, and as the proportion of workers increasingly tips toward the self-employed, expect PayPal and its prepaid card to only gain in popularity.

BAD CREDIT RATING

★★★★

4.4

  • Move money from your PayPal account to fund your prepaid card account.
  • Earn cash back and personalized offers, just for using your card.
  • With Direct Deposit, you can get paid faster than a paper check.
  • Card issued by The Bancorp Bank, Member FDIC. Card may be used everywhere Debit Mastercard is accepted.
  • Click PayPal Prepaid Mastercard® for additional features & program details, and to request a Card.

N/A

N/A

N/A

Variable Monthly Fee

Not applicable

Prepaid cards offer some nice benefits. They look just like regular credit cards, don’t require you to have a bank account, and won’t ever hit you with an overdraft fee since you can only spend up to the card balance.

Secured credit cards are likely to provide instant approval, but you must wait until the issuer receives your security deposit before you are sent the card. And when you do receive approval, you’ll normally have to wait until the physical card shows up in your mailbox. That can keep you waiting a week or more.

If you’d like to start using the account sooner, you have a couple of options. For example, you can see whether the issuer will expedite shipping, either free or for a fee. That can cut your wait down to as little as overnight.

Another way to get shopping sooner is for the issuer to provide you with a virtual card number. This is a temporary number, unrelated to your actual card number, that you can use for online shopping as soon as you receive it.

Most cards will cancel the virtual number once you register the newly received credit card. However, you might find an issuer or third-party service, such as Privacy, that offers permanent virtual numbers.

With multiple virtual credit card numbers, you can limit each number to a particular merchant, time period, and/or spending limit. By doing so, you’ll limit the damage should a hacker steal the number.

Will I Need to Provide a Security Deposit?

Secured cards require a security deposit, while unsecured cards don’t. Typically, the size of the deposit is at least as much as the card’s credit limit, sometimes more, sometimes less.

The credit limit on our top pick, the OpenSky® Secured Visa® Credit Card, is equal to 100% of your security deposit. The deposit goes into a non-interest-bearing FDIC-insured account, where it remains until you close the account and repay the balance.

As with most secured cards, this one doesn’t subject you to a credit check or demand you have a bank account. The annual fee is relatively modest.

Don’t confuse a secured card with a prepaid card. With a secured card, your deposit isn’t touched unless you miss a payment, in which case the card issuer will subtract the required amount from your deposit. If you close the account, the issuer returns the deposit, minus any unpaid balance, to you.

Secured Credit Card vs Debit Card vs Prepaid Card

You must also put up-front money into a prepaid card, but that’s the money you spend when you make purchases with the card. You must replenish the prepaid card’s balance to continue using it.

What Will My Credit Limit Be?

The unsecured cards in this review typically start you off with a small, $300 credit limit. But most of them subtract any upfront fee first. The store credit cards also put tight limits on your credit limit, based on your creditworthiness.

Note that some unsecured cards will automatically evaluate your credit limit after the first year. But beware, the First Access Visa® Card is among those that charge a fee for the higher limit.

Your credit limit on secured cards is no more than the security deposit and may be less. For instance, the credit limit on your BBVA Compass Business Secured Visa® Card is but 90% of your security deposit.

There is no credit limit on a prepaid card because the card offers no credit. Your spending limit is set to the amount you deposit, up to the maximum amount allowed.

What is Credit Utilization?

Credit utilization refers to how much of the credit available to you that you use. The credit utilization ratio (CUR) is equal to the outstanding balance on your credit accounts divided by the sum of the credit limits on those accounts.

For example, if your total credit limit is $5,000 and you currently owe $2,000 solely in credit card debt, then your CUR is ($2,000 / $5,000), or 40%.

CUR is important for a couple of reasons:

  • A high CUR indicates to lenders that you may be in financial distress. That would make it harder for you to obtain additional credit.
  • Amounts owed, as measured by CUR, is one of the five factors that determine your FICO credit score. In fact, it is responsible for 30% of your score. Your score goes down when your CUR rises above a certain threshold (typically 30%).

If you are looking to access new credit or to increase your credit limit, you should first calculate your CUR. If the result is higher than 30%, pay down your balances before applying for the additional credit.

Can I Do a Balance Transfer If I Have Poor Credit?

A balance transfer allows you to perform a credit card consolidation encompassing the balances of several credit cards. Many cards offer this feature.

In fact, when you get a new card, you may be entitled to a promotional period of 0% interest on balance transfers (but a fee applies for each transfer, usually 3%).

However, credit cards targeted to consumers with poor credit generally do not offer balance transfers, much less 0% promotions. You might be able to simulate a partial balance transfer in the form of a cash advance. That is, you might be able to take a cash advance from Card A to pay off the balance on Card B, effectively transferring the balance from B to A.

How to Make a Cash Advance with a Credit Card

But for the bad credit unsecured cards in this review, cash advances are subject to strict limits.

For example, the Total Visa® Card only allows cash advances if your account has been open for three completed billing cycles, is not past due, and you have available credit for cash advances. The card further restricts your total advanced cash to no more than one-half of your current credit limit.

Debt consolidation through balance transfers allows you to reduce the number of credit card payments you make each month. This allows you to concentrate on paying down the card that receives the transfers without having to satisfy multiple minimum payments during the month.

Naturally, this strategy only makes sense if you don’t reuse your other credit cards while paying down the consolidated balance. That sort of behavior will only land you in greater debt.

How Can I Build Credit Using a Credit Card?

All the reviewed credit cards, except for the prepaid ones, report your payment activity to one or more of the three major credit bureaus. These reports build your credit history and help the credit bureaus calculate your credit score.

To build your credit, you must demonstrate creditworthy behavior, and you can use your credit cards in this regard.

FICO Credit Score Factors

The most important component of your credit profile is your payment history, which comprises 35% of your FICO score. Here the advice is elementary: Pay your credit card bills on time.

It’s better to make the minimum payment on time than to make a larger payment late. You will severely hurt your score if your credit card balance is delinquent by more than 90 days or if it goes into collection.

Thirty percent of your FICO score stems from amounts owed. Your credit card balances are an important part of your total debt. Don’t let the amount you owe exceed 30% of the total credit available to you. If it’s higher, pay down your cards and other debts.

Another 15% of your score represents the length of your credit history — the longer the better. Therefore, do not close your credit card accounts simply because you no longer use the card.

Place your obsolete cards somewhere safe and let them molder quietly. Better yet, pull one out occasionally and use it — FICO looks at how long it’s been since you last used it.

Taking on too much new credit can hurt your score. In fact, new credit makes up 10% of your FICO score.

To protect your score, don’t apply for or open many new accounts too rapidly. Numerous hard inquiries in the previous 12 months can hurt your score (although not if you are rate shopping for a specific loan).

Finally, 10% of your FICO score rests on having a wide credit mix. So, if you have only student loan debt and/or a mortgage, getting a credit card may raise your score a bit.

Whatever your credit score, it’s important that you fix your credit reports to remove costly mistakes. We’ve mentioned how you can get your credit reports from AnnualCreditReport.com, When you receive your reports, carefully inspect them for mistakes and omitted information.

According to a study by the Federal Trade Commission, 26% of those surveyed reported at least one derogatory mistake on their credit reports, If you find any mistakes, you can dispute incorrect information or supply missing information by contacting the credit bureau.

Look for common errors. For example, credit reports often conflate your information with that of persons with a similar name.

Other frequent errors include missing accounts, transcription errors, wrong account numbers, double entries, and bad debts from more than seven years ago. If you’ve closed an account on your own initiative, ensure the report doesn’t say the account was “closed by grantor,” which makes it appear that the account was closed by the creditor.

To fix errors, you need to contact both the organization that supplied the inaccurate information and the credit bureau. The Fair Credit Reporting Act requires these parties to correct mistaken information. The Act gives you certain rights, including:

  • The right to receive copies of your credit reports containing all the information on file as of the time of your request. You furthermore have the right to receive a free copy of your credit report within 60 days of being denied credit due to information provided by the credit bureau.
  • The right to know who received your credit report in the last 12 to 24 months.
  • For denied credit applications, you have the right to know the name and address of the credit bureau that the creditor contacted.
  • The right to demand that the creditor and the credit bureau investigate the dispute.
  • You have the right to add short explanations to your credit report explaining your side of the story regarding disputes that were not resolved in your favor.

While once, you had to correct errors through formal written communication, nowadays you can initiate credit disputes online via special webpages at Equifax, Experian, and TransUnion.

To begin the dispute process, clearly identify the information you believe to be incorrect. The credit bureaus then have 30 days to investigate each item, although they can ignore disputes they deem to be “frivolous.”

Attach copies of relevant documents that back up your claim. Specifically request that the credit bureau correct or delete the disputed information.

If you prefer, you can mail the information to the credit bureau. Make sure you use certified mail and request a return receipt. Always keep copies of all correspondence and documents.

An internet search will quickly turn up websites that provide sample dispute letters you can use as templates for your own correspondence. Also, write to the creditor or information provider responsible for the inaccurate entries on your credit report. You should request that the creditor send you a copy of any correspondence between the creditor and the credit bureau regarding your dispute.

The goal of all this effort is to remove inaccuracies that hurt your credit score. However, even if the dispute is resolved in your favor, you may not see a boost to your score.

For example, suppose the credit bureau didn’t recognize that you closed an account. Your credit score may not increase if they agree to report the account closed because the account and payment history will continue to appear on your report. In another example, the bureau may remove some derogatory information, but additional negative information on the report may prevent your score from rising.

If the dispute is not settled in your favor, make sure you ask the credit bureau to attach your dispute statement to your report. You can also ask (for a fee) that recent recipients of your credit report receive a copy of your dispute statement. As a last resort, you can contact a lawyer to help resolve the dispute in your favor.

How to Build Credit with a Credit Card

Rebuilding your credit also requires you to pay your bills on time. Your credit score can suffer substantial damage from late payments and collections.

Try to keep your payments timely by enrolling in automatic payment programs. For example, you can have your mortgage provider pull the monthly payments from your bank account automatically.

If you have delinquent payments, your best bet is to get current on those accounts. Otherwise, you may be saddled with a low credit score.

Be aware that paying off a collection will not remove it from your report. However, you may be able to negotiate with the collection agency to have the entry expunged in return for you paying the debt back.

Establishing a long record of on-time payments should help to increase your score. Also, the impact of derogatory information evaporates over time, so even if you have black marks on your report, they will cease hurting your score.

Usually, negative information remains on your report for no more than seven years, although some bankruptcy filings may remain for up to a decade.

If you’re having trouble paying your debts, you can work with a credit counselor and/or a debt settlement agency to negotiate easier repayment terms. You may be able to arrange some debt forgiveness as well.

Will I Need a Bank Account to Open a Credit Card?

Some credit cards do not require you to have a bank account, but you’ll usually find it easier to manage your credit cards if you do have a bank account.

Bank accounts allow you to pay your credit card bills online. That becomes a big hassle if you don’t have a bank account. You’ll have to pay your card with cash or money order, either in person at a bank branch or via the mail.

You could also use a money service, but that tacks on extra expenses. Bank online payments are instantaneous, while other methods introduce delays. Moreover, delivered payments could get lost in the mail.

In addition, you can use your bank account to set up automatic monthly payments to your credit card. You can set the payments to equal the full balance, the minimum amount due, or some other amount. If you get your credit card from the same bank that provides your checking and/or savings account, you can manage the whole lot on the bank’s mobile app.

OpenSky Secured Visa Credit Card

The OpenSky® Secured Visa® Credit Card doesn’t require a bank account for approval.

Nonetheless, many consumers, especially millennials, don’t want to use a bank or credit union and prefer not to use any type of financial institution. If you fall into this category, you may want to consider the OpenSky® Secured Visa® Credit Card — it doesn’t require a bank account, even though your security deposit is FDIC-insured.

If you are unbanked, you may naturally prefer to use a prepaid credit card. These are a good alternative for anyone who would rather not hassle with banks and all their fees and rules.

Consider the PayPal Prepaid Mastercard®. Many PayPal customers are unbanked and prefer it that way — for them, this Mastercard is perfect.

Our review of 20 credit cards for bad credit has revealed a few appealing alternatives aimed at consumers with less-than-perfect credit. Be sure to study the rates and fees charged for every card offer you consider so you avoid a predatory product that profits off consumers who need help.

These card reviews and handy tips for improving your credit can help you avoid costly mistakes.

Advertiser Disclosure

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Inside the Highly Profitable and Secretive World of Payday Lenders

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Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.


The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”


The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.


In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders



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What’s Questionable Credit and Can I Get a Car Loan With It?

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Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

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Entrepreneur Tae Lee Finds Her Fortune

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By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: gameoffortune.money. To learn more about Tae Lee and Never Go Broke Inc., visit taelee.money and nevergobroke.money or email tae@taelee.money; you also can follow her on Facebook (https://www.facebook.com/nevergobrokeinc) and Instagram (@nevergobrokeinc).

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