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Best credit cards for bad credit



Mistakes happen — and when they do, they can damage your credit score. A late credit card payment or bill that went to collections can sink your FICO number, one of the most commonly used credit scores, into perilous territory. In fact, on FICO’s credit rating scale, which ranges from 300 to 850, a score of 580 or below is designated “poor.” (Exact score ranges and ratings differ across credit scoring models and credit card providers.) But having a poor credit rating doesn’t mean you can’t get approved for a credit card — and some of our picks below can even help you rehabilitate your credit score. 

If you fall in the poor credit range, there’s plenty of potential to move up. Credit scores are fluid and can change based on the decisions you make over time. Although it may be harder to qualify for the premium cards with travel perks and bonuses when you have a less than perfect credit history, there are credit cards that can help you rebuild your history and bump up your FICO score.

The following credit cards are your best options when you need to repair your credit. Use these cards strategically by making occasional purchases and paying the balances off in full when due. 

Discover it® Secured Credit Card


Annual fee: None
Reward rates: 2% cash-back at restaurants and gas stations (up to $1,000) and 1% unlimited cashback on all other qualifying purchases
Welcome bonus: Cash-back match will match the annual rewards you earned, paid at the end of the first year 
Bonus redemption threshold: None
Credit requirement: None
Intro APR: N/A
APR for purchases: 22.99% variable APR
APR for balance transfers: 10.99% intro APR for the first six months
Balance transfer fee: 3%

The Discover it® Secured credit card offers the best value when you’re looking to rebuild your credit score. This card has no annual fees, no credit requirement and rewards potential. It’s secured, meaning you’ll need to provide a security deposit that will be held as collateral. Unlike other secured cards, your deposit of $200 or more is refundable after a track record of on-time payments. 

When rebuilding credit using secured cards, you’ll find that your card’s credit limit typically matches the deposit. It may be low at first, but if pay your Discover card bill on time for eight months or longer, you could qualify for a credit limit increase or get converted to an unsecured credit card.

In addition to credit building and the opportunity to get upgraded to an unsecured card, the Discover it® Secured credit card is a great cash-back rewards card for this credit level. You’ll receive 2% cash-back at restaurants and gas stations (up to $1,000) and 1% unlimited cash-back on all other purchases. Discover will also give you a Cash-back Match at the end of your first year, which could double the rewards you earned.

You can read our full review of the Discover it® Secured card in our best secured credit cards write-up.

Secured Mastercard® from Capital One

Capital One

Annual fee: $0
Credit requirement: None
Intro APR: None
APR for purchases: 26.99% variable APR
APR for balance transfers: N/A

Most secured cards will require you to pay a security deposit equivalent to your credit limit. The Secured Mastercard® from Capital One will give you a starting credit limit of $200 but has three deposit tiers of $49, $99 or $200. This card doesn’t come with a lot of other frills — no rewards or welcome bonus — but it’s a great option for rebuilding your credit.

In addition to potentially low deposit requirements, Capital One performs an automatic review of your account after the first six months to determine whether to increase your credit limit. And, you can receive your secured-card deposit back as a statement credit after a steady history of on-time payments.  

You can read our full review of the Secured Mastercard® from Capital One in our best secured credit cards write-up.

Chime Credit Builder Visa® Secured Credit Card


Annual fee: None
Credit requirement: None
APR for purchases: None

Chime may be best known for its free online checking account, known as a Spending Account, which offers no overdraft fees, account minimums or other hidden charges. But wait — why are we even talking about a checking account here? Well, Chime offers a Chime Credit Builder Visa card that’s fairly unique and pairs up with its checking account. The Chime Chime Credit Builder Visa is technically a secured card — it requires a deposit and reports payment activity to the credit bureaus — but functions like a prepaid debit card — you load money onto your card through your Chime checking account and there’s no interest to worry about.

While most credit-building accounts lock up a certain amount of your funds as a security deposit, Chime’s Visa works differently. You can move money from your Spending account into your Credit Builder account and the balance will serve as your credit limit. When your monthly bill arrives, you can use the funds in the account to pay off your card’s balance. There’s also no credit check involved in the application process.

Chime will report your payment activity to the three credit bureaus but not your credit utilization, so you don’t need to worry about getting penalized for having a low-limit card with a high balance. To get started, you will need to open a Chime Spending Account — don’t worry, it’s free — and have a direct deposit of at least $200 within the last year.

First Tech® Federal Credit Union Platinum Secured Mastercard®

First Tech Federal Credit Union

Annual fee: None
Reward rates: One point for every dollar spent
Credit requirement: None
Intro APR: N/A
APR for purchases: Between 9.00% and 18.00% APR
APR for balance transfers: N/A

Most cards designed to rebuild credit offer minimum rewards. The First Tech Platinum Secured Mastercard is one of the rare cards that doesn’t demand a high FICO score to deliver premium travel perks. Despite its secured nature, it’s a Mastercard, which means there are no foreign transaction fees to worry about when you travel overseas. You’ll also have access to rental coverage and travel insurance for lost/damaged luggage and trip cancellation.

The purchases you make can earn up to one point for every dollar spent. As with a typical rewards card, the points can be redeemed for travel, merchandise and more. And if you keep up the responsible spending and payment habits, your security deposit could be refunded. 

Credit One Bank® Platinum Visa®


Annual fee: $75 the first year, $99 to follow
Reward rates: 1% cash-back rewards on grocery, gas, cable/satellite TV, internet and mobile phone service
Credit requirement: Fair to average
Intro APR: N/A
APR for purchases: 23.99% variable APR
APR for balance transfers: N/A

The Credit One Bank Platinum Visa® for Rebuilding Credit is known to approve applicants with average or below average FICO scores. There is no need to set aside part of your savings to serve as collateral. While the annual fee is definitely a cost you should weigh carefully, if you’re able to maximize your cash-back rewards, you could make up for this fee in rewards earned.

Credit One Bank reports your payment history to the three credit bureaus and automatically reviews your payment history regularly to increase your credit limit. A higher credit limit can improve your credit utilization ratio, an important part of your FICO score. The more unused credit available to you, the faster you can work toward rebuilding credit. For the concept to work, avoid the temptation of spending more.

OpenSky® Secured Visa® Credit Card


Annual fee: $35
Reward rates: 1% cashback rewards on grocery, gas, cable/satellite TV, internet and mobile phone service
Credit requirement: None
Intro APR: N/A
APR for purchases: 17.39% APR
APR for balance transfers: N/A

Of all the providers on this list, Chime Bank and OpenSky are the only two that don’t pull your credit to make a decision. In fact, you don’t even need to have a checking account in order to get approved with OpenSky. The OpenSky Secured Visa card also offers learning tools, which can help anyone interested in learning more about how credit works — and how to put it to best use. The website is broken up into two main categories: rebuilding credit or starting on the journey. The articles and tips are nicely laid out, breaking up the copy with simple, graphic illustrations. 

You can choose your own credit limit up to $3,000, as long as you have the selected amount saved to offer up as a security deposit. The higher your card’s credit limit, the better your credit utilization (when paired with carrying a low balance), which can help your FICO over time. However, if you’re worried about overspending with a higher limit card, we recommend choosing a smaller credit limit, preferably $500 or below. 

Best credit cards for bad credit, compared

Discover it® Secured Credit Card Secured Mastercard® from Capital One Chime Credit Builder Visa® Secured Credit Card First Tech® Federal Credit Union Platinum Secured Mastercard® Credit One Bank® Platinum Visa® for Rebuilding Credit OpenSky® Secured Visa® Credit Card
Secured? X
Purchase APR 22.99% variable APR 26.99% variable APR None 9.00% – 18.00% APR 23.99% variable APR 17.39% variable APR
Credit check Yes Yes No Yes Yes No credit check
Annual fee None None None None $75 the first year, $99 the second and beyond $35
Refundable deposit? N/A N/A
Reports payments to credit bureaus

What credit score is considered “bad credit”?

According to FICO, anyone with a score of 580 or less is considered to have poor credit (also sometimes labeled as ‘bad’ credit). There are many reasons why someone would fall below the threshold of fair to good credit. A bankruptcy or unpaid bills that went into collections are among the more common reasons. Some individuals are classified as having a below-average score after falling victim to identity theft. 

You can improve poor credit by applying for a credit repair card and making consistent, on-time payments. 

What’s the difference between secured and unsecured cards?

Most traditional credit cards fall into the unsecured card category. They’re issued based on your credit score and often come loaded with perks or rewards. Secured credit cards are designed for anyone looking to rebuild their credit. They typically require a deposit for the amount of the credit limit, which will be kept in an account that can’t be accessed until the card is closed. This deposit is typically refundable.

Although most secured cards are no-frills cards, they are making strides. Some of the more popular credit-building cards now require smaller deposits than your credit line and a few even offer cash-back rewards opportunities.

How can I get a credit card if I have ‘bad’ credit?

Just because your credit is less than stellar doesn’t mean you can’t take steps to improve it. Depending on your credit history, you may need to apply for a secured credit card, which requires a deposit for the amount of the credit limit. 

It’s best to view secured cards as a credit-rebuilding tool to set better money management habits. Use the card to make some of your regular purchases, such as gas and groceries, and make sure you pay the balance off on time each month. The method takes time, but it’s entirely possible to receive a credit limit increase — and an improvement in your credit score — in as little as six months.

What should I look for in a credit card if I have ‘bad’ credit?

Credit cards designed for consumers with poor credit don’t always have the most favorable rates and conditions. Gannesh Bharadhwaj, general manager for Karma Scale at Credit Karma, explains, “Subprime high-fee credit cards are available to consumers with the lowest credit scores. To limit risk for banks, these cards generally offer low lines of credit and come with high annual fees.” 

It’s important to read the disclosures carefully to understand what you’re applying for. Avoid cards that come with monthly subscription charges or fees for a variety of transactions. Subprime interest rates may not be ideal, but there’s a workaround — pay your balance off in full each month to avoid interest charges.

Besides the cost of the credit card, choose one with the highest credit limit possible that offers to help you rebuild your credit by reporting your activity to the credit bureaus. The best cards will also perform automatic reviews of your account to raise your credit limit, which could give your credit score a boost. 

Keep in mind that a higher credit limit helps your credit — as long as you don’t spend it. Credit utilization and payments are the two most important factors affecting your credit score. 

According to Brian Walsh, senior manager and CFP at SoFi, “Credit utilization is essentially your total credit card balances divided by your total credit limit. This is one of the most influential factors in your credit score. Generally, lower is better but it is really important to get it below 30% because anything higher can have a pretty negative impact on your score.” 

Can you get a credit card after bankruptcy?

Although a bankruptcy can remain on your credit report for seven to 10 years, you may be able to qualify for a secured credit card. It’s important to understand the timing before you get started. In most cases, you can’t apply for a new credit card until bankruptcy proceedings are over. Once you’re ready, look for a credit-rebuilding card that offers limit increases, or even returns your security deposit after a few months of on-time payments. 

You may have to start out small, with an initial limit as low as $200, but with patience and responsible money habits you can improve your credit standing.

Cards researched

  • Discover it® Secured Credit Card
  • Chime Credit Builder Visa® Secured Credit Card
  • Self – Credit Builder Account + Secured Visa Credit Card
  • First Tech® Federal Credit Union Platinum Secured Mastercard®
  • Secured Mastercard® from Capital One
  • Credit One Bank® Platinum Visa® for Rebuilding Credit
  • OpenSky® Secured Visa® Credit Card
  • Petal® 1 “No Annual Fee” Visa® Credit Card
  • First Tech® Federal Credit Union Platinum Secured Mastercard®
  • State Department Savings Secured Platinum Rewards
  • Citi® Secured Mastercard®
  • Harley-Davidson® Visa® Secured Card
  • DCU Visa® Platinum Secured Credit Card
  • Varo Believe Card

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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