For one reason or another, many people find themselves in a position where they need to repair their credit. Revolving charge accounts, commonly referred to as credit cards, are one of the best ways to repair bad credit through establishing a consistent repayment history.
The problem is most banks will not issues a charge card to people with less than stellar credit, creating a catch-22 situation. However, there are a few banks that are willing to give consumers a chance to rebuild credit with credit-card accounts designed especially to repair credit. Generally speaking, there are two types of credit cards for people with bad credit, secured and unsecured. Secured cards require a refundable cash security deposit. Unsecured cards start off with a low credit limit that may be raised over time. Here are five cards to help repair damaged credit.
Credit One Bank
Credit One Bank offers an unsecured Visa card for consumers with bad credit and does not require a deposit for collateral. The Credit One Bank Visa card provides reporting of account activity to the three main credit bureaus and provides:
- The ability for consumers to see if they qualify without damaging their credit score
- Periodic credit line increases opportunities
- One-percent cash back on eligible purchases, like groceries gas and services
- Zero-fraud liability coverage
- Email and text alert with reminders of upcoming payments when payments posts and when approaching the credit limit
Unity Secured Visa
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The UNITY Secured Visa “Comeback Card” is designed to help consumers overcome past credit mistakes. As a secured card, not to be confused with a prepaid debit card, a cash deposit is required and the credit limit is the same as the amount of the deposit. This card is meant to serve as an interim card while reestablishing credit. Because the card is secured, virtually everyone is approved. The Comeback Card offers:
- A “How to Rebuild Credit” program to help repair credit
- A $250 minimum deposit
- An APR of 17.99 percent and an annual fee of $39
- No application fee or penalty rates
- A late payment and credit limit increase fee of $10, each
Capital One Secured Mastercard
The Capital One Secured Mastercard can get consumers back on the road to building a solid credit history for a little as $49 for a $200 limit. This card provides credit-rebuilding tools and unlimited access to credit scores. Other features include:
- Periodic credit limit increase reviews after five months of on-time payments
- A $0 annual fee
- A steep 24.99-percent variable APR
- Additional no-change warranty protection on items purchased with the card
- Rental-car collision and theft insurance
Discover It Card
The Discover It card is another one of the secured credit cards that will help to rebuild credit by reporting account activity to all three major credit bureaus. The minimum deposit is just $200, making it easier for people without a lot of spare cash to get started. The security deposit is refundable if the account is closed. Additional features include:
- Free Social Security number alerts
- Alerts about thousands of risky websites that may be attempting to steal credit card information
- Earn two-percent cash back on every purchase at gas stations and restaurants as well as one-percent cash back on all other purchases
- No annual fee and five-percent cash back on certain purchases
- An 11.99- to 23.99-percent APR, based on creditworthiness
The Surge Mastercard, offered by Continental Finance, is designed especially for people with less-than-perfect credit. All types of credit are welcome and the online application process is quick and easy, however, a checking account is required and fees are on the steep side.
- Monthly reporting to the three major credit bureaus
- An initial credit limit of $500
- All applications are reviewed for an unsecured card, however, depending on creditworthiness, may require a refundable security deposit of $50 to $500
- A first-year $125 fee, $96 annual fee and $10 per month maintenance fee
- A 29.99 APR