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2018's Best Unsecured Credit Cards

Below are our staff picks for 2018's best unsecured credit cards for bad credit. These cards typically grant cardholders a credit line without requiring a security deposit or pre-payment:

Average APR
17.19%
Average Annual Fee
$9.50
Rate Trend
0.11%
since last month

Review Breakdown: Unsecured Cards

Finding the right unsecured credit card, whether it's for rebuilding bad credit or gaining flexibility with a new credit line, can be daunting. With so many factors to consider, it's easy to make an uninformed choice. The table below, however, makes this much easier. Simply compare cards and click on your card of choice to go to its online application.

Here are 2018's best unsecured credit cards:

Unsecured Credit Cards Bad Credit
Rank Card Name Designed For Annual Fee Expert Rating
1 Fingerhut Credit Account Poor Credit $0 ★★★★★ 4.7
2 Credit One Bank® Visa® Credit Card with Cash Back Rewards Fair $0 - $99 ★★★★★ 4.6
3 Total Visa® Card Fair, Bad Credit See Terms* ★★★★ 4.4
4 Milestone® Mastercard® – Bad Credit Considered Bad, Poor Credit $35 - $99* ★★★★ 4.3
5 First Access Solid Black VISA Credit Card Bad Credit See Terms ★★★★ 4.0
6 Milestone® Mastercard® with Free Choice of Card Image Fair / Good Credit $35 - $99* ★★★ 2.7

How an Unsecured Credit Card Works

Ashley Dull
By: Ashley Dull
Finance Editor
Updated:
How an Unsecured Credit Card Works
CardRates.com Guide: Unsecured Cards

Unsecured credit cards are the most common form of credit issued in the U.S. and around the world. An unsecured credit card is a revolving credit line that does not require a deposit or another form of collateral to open or maintain.

The Credit Card Issuer Pays the Merchant

Credit cards represent a line of credit, which is, essentially, a loan. When you make a purchase with a credit card, the issuing bank pays the merchant and charges your credit account. You are then responsible for repaying the bank for the cost of the purchase. If you need more than one billing cycle to repay your purchase, the bank will charge you interest on the money they have loaned you.

If the credit cardholder shows a willingness and ability to pay back the amount they charge, the credit card issuer keeps the credit line active. As long as they make regular payments and don’t exceed their credit limits, the cardholder can continue to use the card to make purchases again and again.

The Difference Between Unsecured & Secured Credit

At its most basic, the difference between an unsecured credit card and a secured credit card is the deposit, or collateral. If you think about it, an unsecured credit card is really a lender trusting us with their money. The lender (or credit card issuer) is making the payment to the merchant or vendor that accepts our card with the expectation that we’ll repay the loan.

Creditors want to know you can repay your debts before they risk giving you money. This means you'll typically need at least fair credit to be eligible for an unsecured credit line, though a good or excellent credit history will unlock lower rates and higher credit lines.

But, what if you have no credit history — or one that is less-than-stellar? In cases of bad credit or limited credit, credit card issuers may be less willing to offer you an unsecured credit line because you represent a high credit risk.

The alternative is to get a secured credit card. With a secured card, you’ll make an upfront cash deposit equal to your desired credit line. That deposit acts as collateral for the line of credit, giving the issuer assurance that it won’t lose money if you become unable to repay your credit card balance.

Good Credit Can Unlock Better Unsecured Cards

Even if your credit is good enough to qualify for an unsecured credit card, the quality of that card can vary a lot with your credit scores. The better your credit is, the more unsecured credit you’ll be offered — i.e., the  higher the credit limits you’ll receive — and the lower your interest rates on that credit will be.

Photo source: englinea.com

Editorial Note: Opinions expressed here are author's alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

The information on this page was reviewed for accuracy on .

About the Author

Ashley Dull Ashley Dull Finance Editor

Ashley Dull is the editor-in-chief of CardRates.com, where she works closely with industry leaders in all sectors of finance to develop authoritative guides, news, and advice articles read by millions of Americans. Her expertise lies in credit cards and rewards programs as well as credit reports and how credit scores affect all aspects of consumerism. She is often asked to serve as an expert source on financial topics for national media outlets, such as CNN Money, MarketWatch, Money Matters, ABC News, and NBC News, and has recurring contributions to several leading finance websites. Connect with Ashley on Twitter and LinkedIn.

Ashley Dull

Advertiser Disclosure: The credit card offers that appear on this site are from credit card companies from which CardRates.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CardRates.com does not include all credit card companies or all available credit card offers. See the credit card issuer's website for specific terms and conditions of each card.