While having a poor credit history can severely impact your ability to get a mortgage, a car loan, and sometimes even a job, it doesn’t necessarily preclude you from obtaining a new credit card.
In fact, a couple of major issuers — Fingerhut and Credit One in particular — specialize in providing credit card accounts to those with imperfect credit, offering such cardholders a sustainable credit line and an opportunity to rebuild their credit ratings by using credit responsibly.
These credit card providers, commonly referred to as “subprime” issuers, typically offer two different types of cards:
- Secured credit cards: These types of cards require that the cardholder fully “secure” their credit line by depositing a large amount of money with the issuer’s bank. For instance, you may be required to deposit $2,000 in order to secure a $2,000 credit line. You would then get that amount refunded to you once you either closed your secured account or upgraded it to an unsecured account.
- Unsecured credit cards: These cards do not require that you secure the credit line with a large deposit. Instead, the issuer allows you to make purchases on a card, up to a certain total balance, because it trusts that you will pay back that balance over time.
Unsecured credit cards are typically the most desirable of the two options, as they do not require a large cash outlay by the cardholder. Here are a couple of the top subprime credit card issuers and their most desirable unsecured card offers:
1. Fingerhut – 1 Unsecured Card for Poor Credit
Founded in 1948, Fingerhut has helped millions of people with poor credit ratings enjoy the flexibility of an unsecured credit line. Its card account features no annual and no application fee, which is a rarity for a card designed for subprime applicants. In addition to its user-friendly fee structure, the card reports your payments to the three major credit bureaus to ensure you are building credit as you make your payments on time. (See complete WebBank/Fingerhut Advantage Credit Account Terms and Conditions.)
Here is a breakdown of the Fingerhut card, along with a link to its easy online application:
2. Credit One – 2 Unsecured Cards for Poor Credit
Credit One credit cards report your payments to the three major credit bureaus, which can help you build or rebuild your credit if you pay on time and keep balances below their limits. Additionally, Credit One offers 1% cash back on qualified purchases, which makes it easily one of the best rewards program for those with a subpar credit rating.
3. Additional Unsecured Cards for Poor Credit
Besides the major issuers above, you’ll also find occasional offerings from lesser-known banks. We will attempt to update this list as more offers come available:
The Bottom Line
As you can see, having a bad credit rating is certainly not a life sentence when it comes to obtaining an unsecured credit card. Plenty of issuers are willing to give subprime applicants a second chance at credit — and, more importantly, an opportunity to rebuild their credit rating with responsible credit card usage.
The key word here, however, is responsible. Be sure to make at least your minimum payments on time each month and avoid carrying a high balance on your new card for the best results.
Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.