If you have a felony and are struggling to get back on your feet after prison, fixing your credit is a huge step in the right direction.
To get started you will need to have a credit card. While you may think that you cannot open a credit card if your credit score is in the dumps, its actually not true!!!
There are actually various credit cards for people with bad credit!
Lets take a look at the best unsecured credit cards that a felon can easily get.
How to apply for a credit card with bad credit
There are literally hundreds of different credit card offers, and it can be overwhelming to figure out which one you should apply for when you have bad credit.
Look for a credit card that has the following features:
– Offers credit to someone with a credit score of 300-600
– Has $0 – 99 annual fee
– Has $0 monthly fee
– May offer 1% cash back on certain purchases
– Monthly reports sent to the three major bureaus
– Quick pre-qualification with no impact on your credit score
– No processing or application fees
Many of the cards for people with bad credit do charge an annual fee. Some charge $35, $75 or $99. While its an expense, its worth opening up this card in order to rebuild your credit.
You can apply either online or over the phone to a credit card of your choice (see below) and you will get approval within 60 seconds. Most bad credit cards require a security deposit to open your account, so if this is not a problem, you will get approved.
When you research and compare different credit cards, its very important to make sure that the credit card has monthly reporting to the credit agencies on your payment activities. Regular reports on your payments will help speed up the process of raising your credit score.
What is the easiest credit card to get with bad credit?
If your credit score is lower than 500 or if you have a limited credit history, apply for one of the cards below. These are designed to give someone with bad credit a chance to improve and work up to having good credit.
We have narrowed down the search for you, and here are the top credit cards that will help you fix your credit.
1. Capital One Secured Mastercard (minimum deposit $49, $99 or $200)
2. Indigo Platinum Mastercard
3. Surge Mastercard
4. First Premier Bank Mastercard
5. Open Sky Secured Visa Credit Card (minimum deposit $200)
6. Fit Mastercard
7. First Access Visa Credit Card
8. First Progress Platinum Prestige Secured Mastercard (minimum deposit $200)
9. Green Dot Primor Visa Gold Secured Credit Card (minimum deposit $200)
10. Citi Secured Mastercard (Minimum deposit $200)
Most of the credit cards on this list will give you instant approval. Some cards, like the Open Sky Secured Visa, don’t even run a credit check on you!
Once you are approved make sure to make monthly payments on time, and keep a low balance compared to your line of credit.
Its advisable to spend no more than 10-20% of your available credit. If at all possible, it best to make your monthly payments in full – pay off the total amount you have spent that month and don’t let the balance carry over to the next month.
Best department store credit cards for bad credit
When you are rebuilding your credit another option is to open a credit card account at one of your favorite stores, where you shop frequently anyways.
Here are the department stores that offer credit cards even if you have bad credit.
Tjx rewards card
Target RedCard and Amazon credit card require much higher credit scores of at least 600 to qualify.
Secured vs unsecured credit card
If you have very poor credit, it may be easiest for you to initially qualify for a secured credit card vs a regular one. A secured credit card means that the card is backed up by a cash deposit that you have provided. Most secured credit cards require a $200 deposit. However, you can find some that are as low as $50 or $100.
On this card, the credit line you have is basically the deposit you have supplied.
Essentially, you are spending your own money. However, when you pay through this secured card every month, your payments are reported in all major credit reporting agencies, thereby allowing you to rebuild credit.
An unsecured credit card does not require any collateral from you. The credit line you get is based on the lender’s assessment of your credit worthiness. Once your credit improves beyond the 600 mark you will easily qualify for a regular, unsecured credit card with a much higher credit limit.
While it doesn’t seem like there is any real benefit to having a secured card, you have to keep your eye on the long term goal. Once you establish good credit, it will be much easier for you to rent an apartment, which is another huge hurdle than many felons face.
The good news that if you have a secured card open for two years, and make your monthly payments on time, this will give you about a 24 point boost in your credit score.
Pros and Cons of a secured credit card
When you are working on rebuilding your credit, having a secured credit card comes with its own pros and cons. Lets take a look so that you can make an informed decision whether applying for a secured credit card is a good idea in your case.
|Quick approval for people with bad or limited credit
||You need to have cash for the initial deposit
|Designed to help you rebuild credit
||There may be fees associated with the card
|Most cards include automatic reporting to credit agencies
||Interest rates are higher on secured vs regular card
|Your security deposit will be used only if you default on a payment
|Its a good learning tool to practice financial responsibility
|Card issuer may review your account and upgrade you to an unsecured card
|You get your deposit back when you close the card