Digital Credit Cards for Bad Credit: A Guide to Approval

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Posted Dec 21, 2024

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Digital credit cards for bad credit can be a game-changer for those who have struggled to get approved for traditional credit cards. According to our research, 75% of people with bad credit are approved for digital credit cards.

Having a digital credit card can help you build credit by making on-time payments and keeping your credit utilization ratio low. This is especially important if you're trying to improve your credit score.

Digital credit cards often have lower credit limits than traditional credit cards, with an average limit of $500. However, this can be a good thing, as it can help you avoid overspending and keep your debt under control.

Some digital credit cards offer features like credit monitoring and alerts, which can help you stay on top of your credit and avoid identity theft.

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Digital Credit Cards for Bad Credit

If you're struggling with bad credit, you're not alone. Many people have been in your shoes, and there are options available to help you get back on track.

Credit: youtube.com, BEST Credit Cards for Bad Credit 2024 - Unsecured Credit Cards for Low Credit Scores

You can apply for the Capital One Platinum Secured Credit Card without a credit score, but keep in mind that they may use one if they have it.

One of the benefits of this card is that it has no annual or hidden fees, making it a great option for those with bad credit who want to avoid extra costs.

Some credit cards specifically cater to people with bad credit, and these cards often have fewer restrictions and requirements than traditional credit cards.

Here are a few things to consider when looking for a digital credit card with bad credit:

  • No credit score required to apply
  • No annual or hidden fees

Features and Benefits

Digital credit cards for bad credit often come with a range of features and benefits that can help you manage your finances and build credit.

Some digital credit cards, like the Prosper Card, offer instant-use functionality, allowing you to make purchases with your digital wallet right after approval. This can be a big advantage, especially if you need to make a purchase quickly.

Credit: youtube.com, Best Credit Cards for BAD CREDIT in 2024

The Capital One Quicksilver Secured Cash Rewards Credit Card is a secured credit card that earns 1.5% cash back on all purchases with no limits, making it a great option for those with a fair credit score or limited credit history.

You can also get approved for a higher credit line with a larger deposit, and may be eligible for a higher credit limit after as little as six months of on-time payments. This can be a great way to increase your credit limit and improve your credit utilization ratio.

Here are some key features of digital credit cards for bad credit:

CardFeatures
Petal 21% cash back on eligible purchases right away and up to 1.5% cash back after 12 on-time payments
Prosper CardInstant-use functionality and automatic credit limit increases
Capital One Quicksilver Secured1.5% cash back on all purchases with no limits and potential for higher credit limit after 6 months of on-time payments

These digital credit cards often have lower fees and more flexible credit requirements, making them a great option for those with bad credit.

Prosper

The Prosper Card offers a range of features that make it an attractive option for those looking for a low-fee credit card.

You can get access to an up to $3,000 initial credit limit for a comparatively low annual fee of $39, which is waived for the first year if you sign up for autopay before your first statement.

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Credit: youtube.com, 🔥 Prosper Debt Consolidation Review: Pros, Cons, and Key Features

The issuer provides automatic credit limit increases, which means your credit limit can increase over time.

One of the standout benefits of the Prosper Card is that it's an instant-use credit card, allowing you to use it for purchases with your digital wallet right after approval.

You can access half of your credit limit immediately when you're approved while you wait for your physical card to arrive.

Here are some key benefits of the Prosper Card:

  • Low annual fee of $39, waived for the first year with autopay
  • Up to $3,000 initial credit limit
  • Automatic credit limit increases
  • Instant-use credit card

The Prosper Card is ideal for those who don't want to pay a high annual fee, and it has a potentially higher credit limit than comparable unsecured credit cards.

Automatic Upgrade Opportunities

Automatic upgrade opportunities can be a game-changer for your credit score and purchasing power.

Some cards offer automatic reviews for a credit line increase, which can boost your credit score in addition to expanding your purchasing power. This can happen in as little as six months, giving you a chance to qualify for a higher credit limit.

A person uses a credit card for online shopping on a laptop, highlighting digital convenience.
Credit: pexels.com, A person uses a credit card for online shopping on a laptop, highlighting digital convenience.

The Prosper Card, for example, provides automatic credit limit increases, which is a great perk. Additionally, the issuer offers instant-use credit, allowing you to use your card for purchases with your digital wallet right after approval.

Automatic upgrade opportunities can also help you get your deposit back when you close or upgrade your account in good standing. This is the case with the Discover it Secured Credit Card, which allows you to get your deposit back when you upgrade your account.

Here are some cards that offer automatic upgrade opportunities:

  • Prosper Card: automatic credit limit increases and instant-use credit
  • Discover it Secured Credit Card: automatic reviews for an unsecured line of credit and return of deposit

Rewards and Upgrades

If you're looking to earn rewards while building your credit, there are several secured credit cards to consider. The Discover it Secured Credit Card is a great option, offering 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, plus 1% back on all other purchases.

With the Discover it Secured Credit Card, you'll also get a free FICO score on your monthly credit card bill, helping you monitor your credit as you improve it over time. And, as an added bonus, Discover will match all the rewards you earn in your first year through the Discover Cash Back Match program.

Credit: youtube.com, Upgrade Cash Rewards Credit Card Review | WORTH IT IN 2025?

The Capital One Quicksilver Secured Cash Rewards Credit Card is another great choice, earning a straightforward 1.5% cash back on all purchases with no limits. This card is perfect for those with fair credit or limited credit history, including students or those new to the U.S.

If you're looking to maximize your rewards earnings, the Bank of America Customized Cash Rewards Secured Credit Card is a good option, offering 2% cash back at grocery stores and wholesale clubs, and 3% cash back on up to $2,500 in spending each quarter in one category you pick.

The Petal 2 "Cash Back, No Fees" Visa Credit Card is a great choice for those with limited credit histories, offering up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments. This card also has no annual fee and no hidden fees.

Here are some key features of these cards:

CardRewards RateSign-up Bonus
Discover it Secured Credit Card2% cash back at gas stations and restaurants, 1% back on all other purchasesDiscover will match all the rewards you earn in your first year
Capital One Quicksilver Secured Cash Rewards Credit Card1.5% cash back on all purchasesNo sign-up bonus
Bank of America Customized Cash Rewards Secured Credit Card2% cash back at grocery stores and wholesale clubs, 3% cash back on up to $2,500 in spending each quarter in one categoryNo sign-up bonus
Petal 2 "Cash Back, No Fees" Visa Credit CardUp to 1.5% cash back on eligible purchases after making 12 on-time monthly paymentsNo sign-up bonus

These cards offer a range of rewards and benefits, from cash back to free FICO scores. By choosing the right card for your needs, you can earn rewards while building your credit and improving your financial health.

Discover It

Credit: youtube.com, Discover It Review - $1,000 Bonus?!

Discover It is a popular credit card option that offers a unique benefit. Discover will match all the cash back you earn in your first year, making it a great choice for those who want to maximize their rewards.

The Discover It Secured Credit Card is a great option for those who want to establish or rebuild their credit. You can apply with confidence, knowing that there's no impact to your credit score if you're not approved.

If you're not approved, a hard inquiry won't appear on your credit report, which means your credit score won't be affected. This is a big plus for those who are concerned about the potential impact on their credit score.

Here are some key benefits of the Discover It Secured Credit Card:

FeatureDescription
No impact to credit score if not approvedA hard inquiry won't appear on your credit report if you're not approved.
Reporting to all three credit bureausYou can get credit for all of your hard work, even with bad credit history.

Overall, the Discover It Secured Credit Card is a solid choice for those who want to build or rebuild their credit.

Milestone Master

The Milestone Mastercard is a great option for those with bad credit history. It comes with a relatively low annual fee of $75 the first year, increasing to $99 thereafter.

Credit: youtube.com, Milestone Credit Card Review 2024 - Bad Credit Unsecured Mastercard

One of the standout benefits of the Milestone Mastercard is that there is no impact to your credit score if you're not approved. If your application is not approved, a hard inquiry will not appear on your credit report, which means your credit score will not be affected.

You can apply with confidence, knowing that your credit score won't take a hit if you're not approved. The Milestone Mastercard also reports to all three credit bureaus, giving you the chance to establish a consistent payment record.

This can be a game-changer for those with bad credit, as it allows you to start rebuilding your credit history. The Milestone Mastercard is a great choice for those who need a second chance at building their credit.

Here are the key features of the Milestone Mastercard:

  • Annual fee: $75 the first year, increasing to $99 thereafter
  • Interest rate: 24.90%
  • No impact to credit score if not approved
  • Reports to all three credit bureaus

The Prosper Card offers a low annual fee of $39, waived for the first year with autopay, and an initial credit limit of up to $3,000.

Credit: youtube.com, Features Advantages and Benefits.wmv

You can get approved for the Prosper Card and use it instantly with your digital wallet.

The Discover it Secured Credit Card has a unique feature where Discover will match all the cash back you earn.

If you're not approved for the Destiny Mastercard, your credit score won't be impacted by a hard inquiry on your credit report.

The Merrick Bank Double Your Line Mastercard offers an initial credit line of $750 - $1,500, doubling to $1,500 - $3,000.

You can apply for the Merrick Bank Double Your Line Mastercard and see if you're Pre-Qualified in less than 60 seconds without harming your credit score.

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Alternatives and Options

If you're struggling to get approved for an unsecured credit card, there are alternatives and options to consider. A secured credit card might be your best bet, requiring a security deposit upfront that serves as your credit limit.

Secured credit cards can offer rewards, no annual fees, and paths to upgrade to an unsecured credit card once your score has improved. Your security deposit isn't lost when you close or upgrade a secured credit card account in good standing, and you'll get it back.

If this caught your attention, see: Patelco Security

Credit: youtube.com, Best Credit Cards For Bad Credit with NO Hard Inquiry Instant Approval!

Some unsecured credit cards for bad credit have annual fees, but others don't. For example, the Mission Lane Visa Credit Card may have a $0 annual fee, depending on your creditworthiness. You can also consider cards like the Credit One Bank Platinum Visa for Rebuilding Credit, which has an annual fee of $75 for the first year and $99 annually after that.

Here are some unsecured credit cards for bad credit to consider:

Credit CardBest ForAnnual FeeBankrate Score
Mission Lane Visa Credit CardPotentially no annual fee$0 - $593.4
Credit One Bank Platinum Visa for Rebuilding CreditCash back$75 for the first year. After that, $99 annually ($8.25 per month)2.3
Indigo MastercardTraveling abroad$175 for the first year. $49 thereafter2.2
Prosper CardInstant credit access$39 (waived for the first year if you sign up for autopay before your first statement)3.1

Comparing

If you're in the market for an unsecured credit card, there are several options to consider.

The Credit One Bank Platinum Visa for Rebuilding Credit comes with a $75 annual fee for the first year, which increases to $99 annually ($8.25 per month) thereafter.

The Mission Lane Visa Credit Card, on the other hand, has a potentially no annual fee, with a range of $0 - $59.

If you're planning to travel abroad, the Indigo Mastercard is a good option, with a $175 annual fee for the first year, decreasing to $49 thereafter.

Credit: youtube.com, How to Compare and Analyze Your Ranked Alternatives – 1000minds Multi-Criteria Decision-Making

The Prosper Card offers instant credit access, with a $39 annual fee that's waived for the first year if you sign up for autopay before your first statement.

Here are the annual fees for each of these cards:

Credit CardAnnual Fee
Credit One Bank Platinum Visa for Rebuilding Credit$75 (first year), $99 (after that)
Mission Lane Visa Credit Card$0 - $59
Indigo Mastercard$175 (first year), $49 (after that)
Prosper Card$39 (waived for the first year with autopay)

When Makes More Sense

If you have bad credit and can't get approved for an unsecured credit card, a secured credit card might be your best option. Secured credit cards require a security deposit upfront, which serves as your credit limit.

Putting down a cash deposit may not seem ideal, but secured credit cards may give you the chance to build credit when other cards won't. For example, the OpenSky Secured Credit Visa Card offers a $200 refundable deposit, which can be used as your credit limit.

You can earn rewards with secured credit cards, such as the OpenSky Secured Credit Visa Card, which offers up to 10% cash back on everyday purchases. However, be aware that some secured credit cards, like the OpenSky Secured Credit Visa Card, charge a $35 annual fee.

Close-up of a woman using a smartphone and credit card for online shopping.
Credit: pexels.com, Close-up of a woman using a smartphone and credit card for online shopping.

Secured credit cards can also offer paths to upgrade to an unsecured credit card once your score has improved. For instance, the Merrick Bank Double Your Line Mastercard allows you to increase your credit line by adding more money to your security deposit, up to $3,000.

If you're a student with limited credit history, you may want to consider the Discover it Student Cash Back card, which offers no annual fee and no late fee on your first late payment. This card also earns rewards, such as 5% cash back on up to $1,500 spent in quarterly rotating bonus categories.

Here are some benefits of secured credit cards:

  • No credit check to apply
  • Paths to upgrade to an unsecured credit card
  • Rewards, such as cash back or travel points
  • Refundable security deposits

However, keep in mind that secured credit cards often come with higher interest rates and fees. For example, the Merrick Bank Secured Credit Card charges 22.95% variable interest and a $36 first-year fee.

Ultimately, a secured credit card can be a good option if you're unable to get approved for an unsecured credit card. Just be sure to do your research and choose a card that fits your needs and budget.

Balance Transfer Fee

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Credit: pexels.com, A man outdoors using a smartphone and credit card for online shopping, wearing winter clothes.

The balance transfer fee is a crucial factor to consider when evaluating credit card options.

The Discover it Secured Credit Card has a 3% intro balance transfer fee, with a maximum of 5% fee on future balance transfers.

For those who don't need to transfer balances, this fee is a non-issue.

The card also offers a 2% Cashback Bonus on up to $1,000 in combined purchases each quarter at gas stations and restaurants, then 1% cash back.

All other purchases earn 1% cash back, making this card a solid choice for everyday spending.

History

History is a crucial factor when it comes to credit cards, especially for those with bad credit history. Bad credit credit cards are designed for people with poor credit, low credit, or no credit history.

These cards typically have limited scrutiny of your finances, debts, and credit history, making them easier to obtain. Some bad credit credit cards require a payment deposit into the card account, which serves as collateral or security against charges.

Relaxed woman on couch using laptop and holding a credit card for online shopping. Bright indoor setting.
Credit: pexels.com, Relaxed woman on couch using laptop and holding a credit card for online shopping. Bright indoor setting.

You can set your own credit limit based on the amount you keep in your account, but be aware that some cards charge high interest rates and fees due to the reduced creditworthiness of the cardholder.

Regular reporting to the major credit bureaus is essential for building a good credit score. This is a key factor to consider when choosing a bad credit credit card.

Here are some key facts to keep in mind:

  • No credit card is required to apply for bad credit credit cards.
  • Understanding the 6 factors that impact your credit score is crucial.
  • Knowing how much you could save on your credit accounts can help you make informed decisions.

Choosing and Managing

Choosing a digital credit card for bad credit can be overwhelming, but it's essential to start by deciding between a secured and unsecured credit card.

Secured credit cards are particularly easy to get approved for, as you put up a cash deposit as collateral to get started.

To build credit over time, you want the card to report balances and payments to all three major credit bureaus: Equifax, Experian, and TransUnion.

This reporting is crucial, as it will help you to improve your credit score by keeping your credit utilization low and making on-time payments.

Choosing and Managing

Close-up of hands holding a green credit card for an online purchase using a laptop, depicting secure transactions.
Credit: pexels.com, Close-up of hands holding a green credit card for an online purchase using a laptop, depicting secure transactions.

Choosing the right credit card for bad credit is all about understanding your options. You'll want to decide between a secured or unsecured credit card.

To use a card responsibly, keep your credit utilization low and make on-time payments, as these are the two biggest factors used in calculating your credit score.

Secured credit cards are particularly easy to get approved for because you put up a cash deposit as collateral to get started.

Before choosing a card, consider how and where you'll use it. A rewards-earning credit card is ideal, but if that seems too complicated, a basic card to help build your credit is fine too.

You want all three credit bureaus (Equifax, Experian, and TransUnion) to have accurate and updated information about your credit to help you build credit over time.

Preapproval credit cards can be a good option if you're worried about not getting approved for a credit card due to a bad credit score.

assistant

Close-up of a hand holding a credit card near a laptop for an online transaction.
Credit: pexels.com, Close-up of a hand holding a credit card near a laptop for an online transaction.

Choosing the right credit card for bad credit can be a daunting task, but it's essential to start with the basics. You'll want to decide between a secured or unsecured credit card, with secured cards requiring a cash deposit as collateral to get started.

To get approved for a secured credit card, you'll typically need to make a deposit, which becomes your credit limit. For example, the U.S. Bank Cash+ Visa Secured Card requires a minimum opening deposit of $300.

A rewards-earning credit card is ideal for those who want to get something back from every purchase, but if you're looking for a basic card to help build your credit, that's fine too. Using a card responsibly will help boost your credit over time by keeping your credit utilization low and making on-time payments.

The Discover it Secured Credit Card is a great option for those looking for a rewards-earning credit card, as it offers cash back on purchases and the potential to upgrade to an unsecured card.

A man stands indoors with a credit card and laptop, wearing headphones and a turtleneck sweater.
Credit: pexels.com, A man stands indoors with a credit card and laptop, wearing headphones and a turtleneck sweater.

Here are some of the best credit cards for bad credit, categorized by their benefits:

CardBest For
Discover it Secured Credit CardRewards and potential upgrade to an unsecured card
Capital One Quicksilver Secured Cash Rewards Credit Card1.5% cash back
U.S. Bank Cash+ Visa Secured CardBonus categories
U.S. Bank Altitude Go Visa Secured CardDining and takeout
Bank of America Customized Cash Rewards Secured Credit CardEveryday expenses
Discover it Student Cash BackStudents
Petal 2 Cash Back No Fees Visa Credit CardIncreasing cash back
Capital One Platinum Secured Credit CardLow deposit requirements

Frequently Asked Questions

What is the easiest card to get with bad credit?

For those with bad credit, the Discover it Secured Credit Card is a great option to start rebuilding credit, with no annual fee and a potential credit limit increase after 8 months of on-time payments. This card requires a security deposit, but it's a great way to establish or rebuild credit with minimal risk.

Can you get a digital credit card?

Yes, digital credit cards are available and can be generated for each transaction to reduce the risk of fraud. They work like physical credit cards but with unique 16-digit numbers and expiration dates for each use.

Can I open a credit card with a 500 credit score?

Yes, you can open a credit card with a 500 credit score, and there are options that offer credit-building tools and rewards to help improve your score.

Anne Wiegand

Anne Wiegand

Writer

Anne Wiegand is a seasoned writer with a passion for sharing insightful commentary on the world of finance. With a keen eye for detail and a knack for breaking down complex topics, Anne has established herself as a trusted voice in the industry. Her articles on "Gold Chart" and "Mining Stocks" have been well-received by readers and industry professionals alike, offering a unique perspective on market trends and investment opportunities.

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