Among those with bad credit, it was a shame to see HSBC credit cards say their final goodbyes. HSBC was recently bought out by Capital One and discontinued its U.S. services.
The Orchard Bank Secured card, one of our favorite credit cards for bad credit, was also terminated in the process. But not to worry – if you’re looking to build or rebuild your credit, there are still viable options out there for you.
Bad Credit Bailout
The Orchard Bank credit card was a great option for those with less-than-stellar credit, with limited fees and some of the most reasonable terms out there in the pre-approved or poor credit category. For example, cards like the First Premier Bank Aventium and Centennial credit cards try to take advantage of unsuspecting citizens looking for a second chance with outrageous 49.99% APRs, annual fees of $123 or skimpy $300 credit limits.
And don’t even get us started on prepaid debit cards. If its sneaky, endless fees you want, prepaid debit cards are for you. If you’re more interested in keeping your bucks where they belong, we’d say try your luck elsewhere.
Capital One Secured Card
HSBC may be an international superstar, but there’s nothing like a good ol’ American card to come through for those who need a credit boost. If you liked the Orchard Bank card, check out the Capital One Secured card. It offers many of the same (and even better) terms and perks as Orchard Bank.
As with any secured card, if you can make the upfront, refundable deposit, you’ll get approved no matter what your credit score. Even if you’re still recovering from bankruptcy, you’ll be offered a secured card (barring something really unusual on your credit report). Most lenders wont give you a chance at a card until you’ve been out of bankruptcy for at least a year, but, like the Orchard Bank Secured, the CapOne secured will be there to immediately lend you a hand when you need it most.
| Capital One® Secured MasterCard® | |||
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| Annual Fee | Signup Bonus | APR , Variable* | Intro APR Promotions |
| $29 | None | 22.9% (V) | Purchase: None Transfer: None |
The CapOne secured has an annual fee of $29, less than Orchard Bank’s but not waived the first year. It has a rather high APR at 22.9% (as of 9/21/12), but it makes up for it in other, perhaps more important ways. You can avoid a high APR by paying on time (which would be best for one with bad credit), but a low minimum security deposit could mean the difference between boosting your credit and not qualifying for a card at all.
The Capital One Secured card allows you to pay a minimum security deposit of $49, $99 or $200, which you can pay in installments if needed – just pay within 80 days after your approval. Also, no matter what minimum deposit you pay, you’ll still get the $200 credit limit (maximum $3000).
Other Options
Whether you’re trying to rebuild bad credit or don’t have credit at all, there are options out there for you. Limited, yes, but still options. To get you out of the bad credit blues, the Orchard Bank’s exit makes the Capital One Secured your best option to lift your credit score’s spirits. But using just about any secured card responsibly will eventually allow you to graduate to a card with lower fees or even rewards.
Just make sure you steer clear of prepaid debit cards – they claim to improve your credit score or report to major credit bureaus, but that’s simply not the case. You aren’t borrowing money, so prepaid cards don’t affect your credit score at all. As long as you keep from falling victim to their shenanigans, you’ll be on the road to recovery soon enough.
