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NerdWallet’s Best Credit Cards for Bad Credit in 2015

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Having a poor or very limited credit history makes it tough to get approved for a credit card. But secured credit cards are generally easier to get, and in some cases, they can help you improve your FICO score enough to qualify for unsecured cards.

Here are the Nerds’ favorite credit cards for bad credit:

Best if you’re low on cash for a deposit: Capital One® Secured MasterCard®

Can make collateral deposit over time; reports to the major credit bureaus; comes with access to Credit Tracker tool; annual fee is $0.

Capital One Secured MasterCard Credit Card
Apply Now

on Capital One's
secure website

Benefits of the Capital One® Secured MasterCard®:

  • You don’t have to make your collateral deposit right away, as long as the deposit requirement is met within 80 days of account opening.
  • Over time you may be given a higher credit line without putting down an additional deposit, a rare quality among secured cards.
  • This card provides access to Capital One’s Credit Tracker tool, so you can see how your responsible habits are helping your credit.
  • The card’s $0 annual fee is low compared with other secured cards.

Drawbacks of the Capital One® Secured MasterCard®:

  • This card has a high interest rate: The ongoing APR is 24.9% (Variable).
  • The Capital One® Secured MasterCard® card doesn’t offer a rewards program. This is common for secured cards, but it’s possible to find those perks elsewhere.

The bottom line:

The Capital One® Secured MasterCard® is an excellent choice for people who are short on cash, but want to work on building or rebuilding their credit. It offers flexibility when it comes to making a collateral deposit, and responsible use of the card could score you a higher credit limit without having to cough up additional funds. Also, since the card is issued by a major bank, it may be easier to upgrade to another one of the bank’s unsecured cards later.

Best if you have extra cash to deposit: Wells Fargo Secured Visa Card

Access a credit line of up to $10,000, based on your deposit; reports to the major credit bureaus; comes with free online credit education; annual fee is $25.

Wells Fargo Secured Visa Card Credit Card
Apply Now

on Wells Fargo's
secure website

Benefits of the Wells Fargo Secured Visa Card:

  • You can get a credit line of up to $10,000 if you can make a collateral deposit equal to that amount. This is a very high credit limit for a secured card, which makes it easier to keep your credit utilization ratio low.
  • The Wells Fargo Secured Visa Card’s annual fee is $25, which is very low for a secured card.
  • Your account will be reviewed periodically, and if you show responsible use, you may be upgraded to an unsecured credit card from Wells Fargo.

Drawbacks of the Wells Fargo Secured Visa Card:

  • As of April 2015, Wells Fargo doesn’t offer free credit score access to its credit card customers. This can make it hard to track your progress toward a healthier score.
  • The Wells Fargo Secured Visa Card doesn’t offer a rewards program.
  • The interest rate on the Wells Fargo Secured Visa Card is high: The ongoing APR is 18.99% Variable

The bottom line:

The Wells Fargo Secured Visa Card should be your first choice if you have cash handy you can commit to the collateral deposit. A higher credit limit means that you won’t have to keep making payments to keep your credit utilization ratio down, and it provides a bigger safety net in the event of an emergency. Also, this card’s annual fee is low given its benefits, another factor that makes it one of the Nerds’ top picks.

Best for military members, Department of Defense employees, and their families: Navy Federal nRewards Secured

Earn 1 point for every $1 you spend; points are worth as much as 1 cent each; reports to major credit bureaus; annual fee is $0.

Navy Federal Credit Union nRewards Secured Credit Card
Apply Now

on Navy Federal Credit Union's
secure website

Benefits of the Navy Federal nRewards Secured:

  • The Navy Federal nRewards Secured earns rewards, which is very rare among secured credit cards.
  • The card’s annual fee is $0 — another unusual benefit for a secured credit card.
  • The Navy Federal nRewards Secured charges a comparatively low interest rate. The ongoing APR is 8.99% - 18% Variable

Drawbacks of the Navy Federal nRewards Secured:

  • You must be a Department of Defense employee (including military members) or the family member of a Department of Defense employee to join Navy Federal Credit Union. Without membership, you can’t get the Navy Federal nRewards Secured.
  • The card’s minimum collateral deposit is $500, which is high compared with other cards.

The bottom line:

The Navy Federal nRewards Secured is undoubtedly the Nerds’ secured credit card of choice — if you meet the eligibility criteria for Navy Federal Credit Union membership. It has a low cost, offers rewards, and reports activity to the major credit bureaus. This is a rare trifecta of qualities that shouldn’t be ignored.

Best if you want to upgrade to an unsecured card quickly: US Bank Secured Card

Reports to major credit bureaus; provides access to a credit limit of up to $5,000, based on your deposit; you may be eligible for an upgrade to an unsecured card in as little as 12 months.

US Bank Secured Visa Credit Card
Apply Now

on US Bank's
secure website

Benefits of the US Bank Secured Card:

  • The US Bank Secured Card will allow you a credit limit of up to $5,000, if you’re able to provide that amount for a collateral deposit.
  • U.S. Bank will evaluate your account after 12 months. If you’ve been responsible with your card, you may be eligible to upgrade to an unsecured card. This is a faster opportunity to transition to unsecured credit than many other cards provide.
  • The card’s annual fee is $29, which is low compared with many secured credit cards.

Drawbacks of the US Bank Secured Card:

  • As of April 2015, U.S. Bank doesn’t offer free FICO score access to secured credit card holders. This could make it hard to track your credit progress over time.
  • 0% for 9 months on balance transfers, and then the ongoing APR of 12.99% - 23.99% Variable — a pretty steep interest rate compared with some other options.

The bottom line:

This card is a first-rate choice if your main goal is to switch from a secured card to an unsecured card as quickly as possible. Since many secured cards force you to wait 18 months or more to transition, the US Bank Secured Card’s evaluation at 12 months could be a great opportunity for responsible cardholders.

Best if you can’t afford an annual fee: Digital Federal Credit Union Visa Platinum Secured Credit Card

The annual fee is $0; has comparatively low interest rate; reports to major credit bureaus; can join Digital Federal Credit Union with a one-time donation to an eligible charity.

Digital Federal Credit Union Visa Platinum Secured Credit Card Credit Card
Apply Now

on Digital Federal Credit Union's
secure website

Benefits of the Digital Federal Credit Union Visa Platinum Secured Credit Card:

  • The card’s annual fee is $0. This is hard to find in secured credit cards. This credit union’s membership requirements are relaxed, which means nearly everyone can apply for the card.
  • The Digital Federal Credit Union Visa Platinum Secured Credit Card charges a comparatively low interest rate: The ongoing APR is 11.5% Variable

Drawbacks of the Digital Federal Credit Union Visa Platinum Secured Credit Card:

  • This card doesn’t offer a rewards program.

The bottom line:

The Digital Federal Credit Union Visa Platinum Secured Credit Card is a primo choice if you don’t want to pay an annual fee, but also don’t qualify for membership in Navy Federal Credit Union (see above). It’s very cost-effective and will help you pump up your credit score because it reports to all three major credit bureaus. There’s not much more we could ask for in a secured card!

Last updated April 6, 2015.

Lindsay Konsko is a staff writer covering credit cards and consumer credit for NerdWallet. Follow her on Twitter @lkonsko and on Google+.


Image via iStock.

  • heavyw8t

    A lot of your responses include “your local credit union”. Don’t you have to have to be employed at some specific place to become a member of a credit union? I mean to belong to the UAW Credit Union, don’t you have to belong to UAW? Can you just walk into random credit unions and start applying for credit cards?

    • blackbeered

      In most cases, no allegiance required. That was yesteryear.

  • Melissa

    It seems to me every high school should have mandatory classes on managing your credit. One thing that bothers me are these sites where you can pull up your credit score for free. It claimed I had a 648 score, so I tried applying for a credit card and on my rejection letter it stated my score was 604. I applied to 2 different cards both telling the same thing. Which score is the right score? To me, the right score is the one these credit card companies are referring to. I switched to myfico.com and my scores are all over the place….556(604, no more), 654, 650. I’m just now starting to rebuild my credit and based on all the info, what’s really hurting me is I have no line of credit. Does your line of credit impact your score? If these are actually my scores, is a secured card still my only option? I’m a stay at home mom, so I have no income from a job. My husband makes a good income, but his credit is worst than mine. I want to apply for my own card, but wondered if that could’ve been another reason they denied me. Is there any way around that?
    Also, I heard its important to ask before applying for a secured card, to see if they report it on your credit as being “Secured”. I cant remember the exact reason, maybe just doesn’t look as good to lenders?

  • Melissa

    NerdWallet, can you please tell me what you think of a secured credit card from Navy Federal. They’re a credit union in my area, and I was going to take your advice and speak to someone in person. Is this card worth it?
    Gracias!

    • http://www.nerdwallet.com/ NerdWallet

      Navy Federal is great! The only concern is that you or a family member must be affiliated with the Department of Defense.

  • Melissa

    Oh my gosh, I’m thinking of a million questions now! So sorry everyone. When I got denied for the two credit cards (Capitol One and Chase un-secured), why couldn’t they refer me to another card they provided that would better suit my needs during the application process. If I act quickly, I don’t see why my same application and credit report cant be used towards one of their other cards with the SAME COMPANY. And by quickly I mean within 14 days. Do they really have to ding my credit again? This is when I think its unfair, they just didn’t want to work with me at all. I don’t care if my limit is $100, something is something.

  • Sasha

    I just discovered that I am on a joint credit card with my mom and she has almost maxed it out or paid late. This is impacting my credit score? Is thre a way for me to have my name removed from the account? If so, will this negatively affect my credit score? I don’t feel that I should be held responsible for a card I wasn’t aware existed.

    • http://www.nerdwallet.com/ NerdWallet

      Hey Sasha, I’m sorry to hear you’re having such trouble. If your mom’s making late payments, you’re better off getting your name off the account because it does indeed impact your credit score. Once you’re off the account, you can start rebuilding your credit with a secured credit card or secured share loan.

  • http://www.nerdwallet.com/ NerdWallet

    Hi Chantel, you can check out our picks for the best easy-to-obtain credit cards and find a no-fee card that suits your needs!