HSBC Credit Cards for Bad Credit: They’re Gone Now, but Other Options Remain

Cards from the issuer's Orchard Bank subsidiary were popular for reasonable fees and interest rates.

Paul SoucyAugust 13, 2020
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Credit cards issued by HSBC used to be among the best options for people with bad credit. The company's Orchard Bank subsidiary was popular for cards that combined reasonable annual fees with relatively low interest rates.

HSBC sold Orchard Bank to Capital One in 2012, and those cards were discontinued. HSBC still issues credit cards, but only for consumers with good to excellent credit.

That doesn't mean people looking to build or rebuild credit don't still have good options. NerdWallet generally recommends secured credit cards as the simplest and quickest path to credit building.

For the most part, a secured card works like any other credit card: You charge purchases on the card, then you pay for those purchases when your statement comes.

What distinguishes a secured card is that when you open the account, you have to make a cash deposit, usually equal to your credit limit. The card issuer holds onto that money in case you don't make your payments. Because the deposit reduces the risk to the issuer, secured cards are much easier to get approved for than regular "unsecured" cards. When you close a secured card or upgrade it to an unsecured card, you get your deposit back.

Secured cards are not the same thing as prepaid cards. With a prepaid card, you "load" money onto the card. When you buy something with the card, the money for it comes out of what you loaded. So it's your own money all the way. With a secured credit card, you're borrowing money from the issuer for your purchases, then paying the money back later. The issuer doesn't touch your deposit. Because the issuer is extending you credit, using a secured card wisely can help you improve your credit score. Prepaid cards involve no credit, so they have no effect on credit scores.

Even with the looser approval requirements of secured cards, approval is not guaranteed, however. You'll still need to show that you have income to pay your bill, and a bankruptcy on your record could torpedo your application.

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