The HSBC credit cards are shaking up the stereotype of credit cards for bad credit. For folks with bad credit, credit cards aren’t fun. High interest rates, painful annual fees, and no rewards. You know it’s bad when a card’s most enticing benefit is e-mail and text message reminders about payments and due dates. But thankfully, Orchard Bank, one of HSBC’s American subsidiaries, offers solid options for people with less-than-stellar credit. The Orchard Bank MasterCard intended for people looking to build or rebuild credit, and they have terms that won’t send you running.
As you may have heard, HSBC was recently bought by Capital One. But most of the offerings will remain the same, down to the name: their bad-credit cards are still issued by Orchard Bank.
Good choices for bad credit
The Orchard Bank credit card is a great option for people with limited or bad credit, offering programs with smaller fees and more reasonable terms than many cards in the pre-approved or poor credit category. The First Premier Bank Aventium and Centennial credit cards, for example, have a 49.99% APR, an annual fee of $123 (only $75 the first year – what a deal!) and a $300 credit limit. If you’re looking for something better than a prepaid credit card, Orchard’s a viable options.
Orchard Bank vs. Capital One: secured card showdown
HSBC made a name for itself internationally, but Capital One’s home-grown American goodness comes through with its secured credit card, which along with the Orchard Bank Secured is one of the friendliest out there. Both of them will give you a secured card if you can make the deposit, regardless of your credit score or whether you’ve just gone through bankruptcy, barring something really unusual. Most other lenders won’t give you a secured card straight out of bankruptcy, but Capital One and Orchard are both great about lending to those in need of a credit score boost.
The secured HSBC credit card has an exceptionally low APR of 7.9%, plus 0% interest on purchases for the first 9 months, which can be helpful for anyone who needs time to pay off a big purchase. The annual fee is $35, but it’s waived the first year, so you can use that time to (hopefully) graduate onto a regular credit card. Pros: Low annual fee and APR. Cons: The minimum security deposit is a high $200.
The Capital One Secured’s annual fee is lower at $29, but it’s NOT waived the first year, and the APR is a startlingly high 22.9% (as of 11/1/11). On the other hand, its minimum security deposit is a lot more manageable at $49, $99 or $200. Pros: Low security deposit (minimum $49). Cons: High APR, annual fee isn’t waived the first year.
Orchard Bank Unsecured: the most accessible unsecured card around
The unsecured Orchard Bank MasterCard is, we believe, one of the easiest unsecured credit cards to qualify for. Its fees are a little higher than the secured’s, but in return you don’t need to pony up money when you open your account. Combining the processing fee with the discounted first-year annual fee, you end up paying $68 the first year and $59 on subsequent years. The APR is 19.9% as of 11/1/11, a tad lower than you usually see on a bad credit credit card. The main selling point of the Orchard Bank unsecured is that it’s among the easiest to qualify for – we’ve seen FICO scores as low as 600 qualify.
If you’ve got bad credit, HSBC credit cards have your back – they won’t try to screw you over with hidden fees or jack up your APR to disgustingly high levels. Plus, Orchard Bank goes above and beyond in two ways:
- Through a long and complicated process that isn’t really that important, when you apply for an HSBC credit card, it’s done in such a way that it doesn’t hurt your credit score like applying for a credit card normally does
- All the interest rates and fees are disclosed upfront on the card’s website, so you don’t need to go digging around for them. They’re straightforward about their credit cards.
HSBC gets high marks for honesty and for a willingness to lend to those with low FICO scores. If you’ve got bad credit, you can’t really do better than the Orchard Bank cards.