Updated on Nov 27, 2018

Best Unsecured Credit Cards for Bad or Average Credit for 2018

An unsecured card is one of the best – and easiest – ways to build your credit.
Advertiser Disclosure

Independently researched content by us. Free financial advice for you. To do that, we may get compensation when you click on our partners’ products. Our lists consist of the best cards from our partners. Not all cards in the marketplace have been evaluated. View our full advertiser disclosure to learn more.

Don’t let your credit score discourage your from applying for a credit card. The best unsecured credit cards for bad or average credit have affordable upfront costs and don’t require a down payment. Take a look at our list of the top cards, find your perfect match, and apply online in minutes.

Summary

Best unsecured credit cards for bad or average credit

disclaimer-statement.info’s top picks for 2018

  • Indigo® Unsecured Mastercard® APPLY NOW
    Best for less-than-perfect credit Indigo® Unsecured Mastercard®
    Apply Now on Genesis FS Card Services' secure website.
  • Milestone® Gold Mastercard® APPLY NOW
    Best for low transaction fees Milestone® Gold Mastercard®
    Apply Now on Genesis FS Card Services' secure website.

Pro Tip


It’s a myth that you need to carry a balance from month to month in order to build credit. Paying your balance off in full and on time each month is vital to improving your credit score since payment history and credit utilization account for about two-thirds of your credit score. Even charging as little as $20 a month and paying it off in full will improve your credit score!
Apply Now on Genesis FS Card Services' secure website.

Best for less-than-perfect credit

Indigo® Unsecured Mastercard®
Annual Fee $0 - $99
Ongoing APR 23.9%

Pre-qualification available? Yes
Previous bankruptcy OK? Yes
Highlights Provided by Genesis FS Card Services Show Highlights
  • No security deposit required
  • Card designs to fit your personality at no extra charge
  • Less than perfect credit histories can qualify, even with prior bankruptcy!
  • Account history is reported to the three major credit bureaus in the U.S.
  • Pre-qualify for a card today and it will not impact your credit score
  • Accepted nationwide wherever MasterCard is accepted
  • Fast and easy decision on your application
  • Protection from fraud, if your card happens to be lost or stolen
  • Issuer: Genesis FS Card Services
  • Annual Fee: $0 - $99
  • Cash Advance APR: 29.9%
  • Foreign Transaction Fee: 1% of each transaction.
  • Introductory APR: N/A
  • Introductory APR Period: N/A
  • Introductory Balance Transfer APR: N/A
  • Introductory Balance Transfer Period: N/A
  • Ongoing APR: 23.9%

Our two cents

Who should get it

Anyone who has previously filed for bankruptcy should consider the Indigo® Unsecured Mastercard®. A bankruptcy can stay on your credit report for seven to 10 years, making it difficult to move past it and rebuild your credit. Luckily, this card’s relaxed guidelines won’t necessarily disqualify you for a previous bankruptcy. If you’re still not sure if you’ll qualify, don’t worry. They offer a pre-qualification option to let you know your likelihood of getting approved (without a hard credit inquiry that could lower your score).

How to use it
  • Answer a few pre-qualification questions to find out if you’re likely to be approved.
  • Pay your balance on time each month to strengthen your credit score and avoid the high penalty APR.
  • Once your credit score is where it needs to be, consider switching to a card that offers a rewards program.
Consider this

The Indigo® Unsecured Mastercard® does have an APR of 23.9% as well as an annual fee of up to $99. Your annual fee may be $0, $59 or $75 first the first year (then $99 afterward), depending on your credit profile and the quality of your credit score. To avoid paying more in interest and fees, be sure to pay your balance off in full and on time each month.

Why you'll love it

The forgiving guidelines with the Indigo® Unsecured Mastercard® make it a desirable option for anyone who’s felt limited by a previous bankruptcy on their credit report. As a cardholder, you’ll benefit from no security deposit and a small annual fee as you work toward improving your credit score.

Start your application now Back to top
Apply Now on Genesis FS Card Services' secure website.

Best for low transaction fees

Milestone® Gold Mastercard®
Annual Fee $35 - $99
Ongoing APR 23.90%

Pre-qualification available? Yes
Previous bankruptcy OK? Yes
Highlights Provided by Genesis FS Card Services Show Highlights
  • Quick pre-qualification available with no impact to your credit score
  • Easy pre-qualification process with fast response
  • Choose your custom card design - Free
  • Free online account access
  • Protection from fraud, if your card happens to be lost or stolen
  • Accepted at over 35 Million Locations Worldwide!
  • Previous bankruptcy OK
  • Issuer: Genesis FS Card Services
  • Annual Fee: $35 - $99
  • Cash Advance APR: 29.90%
  • Foreign Transaction Fee: 1% of each transaction
  • Ongoing APR: 23.90%
  • Penalty APR: 29.90%

Our two cents

Who should get it

The Milestone® Gold Mastercard® is another card that’s forgiving of a previous bankruptcy and won’t necessarily disqualify you if there’s one on your credit report. While the card does have an annual fee and possible account opening fee associated with it, it offers some other perks. You’ll benefit from a low annual fee of $35 to $75 during the first year (then $99 after that), $0 cash advance fee during the first year (then $5 or 5% after that), as well as a low 1% foreign transaction fee. Milestone also offers a pre-qualification option to let you know the likelihood of getting approved without impacting your credit score.

How to use it
  • Take advantage of pre-qualification to check your eligibility without a hard inquiry on your credit score.
  • Budget to pay off your balance monthly (or twice a month!) to build credit and avoid the higher penalty APR.
  • After your credit score improves, make the switch to a card with a rewards program.
Consider this

Depending on your credit profile, there may be some upfront fees associated with opening your account. Annual fees are based on your credit score: $35, $59, or $75 (then $99 after the first year). There may also be an account opening fee of $5, $25, or $50. Luckily, your first-year annual fee and account opening fee won’t total more than $75.

Why you'll love it

The Milestone® Gold Mastercard® offers a lot of great features to anyone with bad or fair credit — more forgiving guidelines on a previous bankruptcy, lower upfront costs and transaction fees during the first year, and no security deposit required. Additionally, it’s backed by Mastercard®, meaning you’ll be able to use it just about anywhere.

Start your application now Back to top

Best unsecured credit cards for bad or fair credit: summed up

Best for... Credit Card
Less-Than-Perfect Credit Indigo® Unsecured Mastercard® Apply Now
Low Transaction Fees Milestone® Gold Mastercard® Apply Now

What is an unsecured credit card?

Unsecured credit cards are the type of card people typically refer to when they use the phrase “credit card.” These cards aren’t secured by collateral (like your home or other property), so issuers must rely on courts or garnishment to collect unpaid debts. The primary benefit to card users is that they don’t require a cash deposit to establish the credit line.

The best unsecured credit cards for bad credit have less strict credit requirements, low fees, and allow for previous bankruptcy.

Choosing an unsecured card for bad credit

With unsecured credit cards, the features that could impact your credit and financial health the most are the APR and fees. Without responsible use, owning an unsecured credit can hurt your credit score instead of helping you repair it.

It’s best to pay your credit card off every month in full, but that’s not always possible. To avoid incurring interest that could cost you considerable money, look for a credit card with the lowest APR and fees.

  • APR. APRs for unsecured credit cards are often around 15% higher with bad credit than for people with excellent credit scores. If your score is in the 500 to 600 range, expect to see rates in the mid- to upper-20s.
  • Fees. Annual fees are the easiest to spot, but there are others. Make sure you read the fine print and scan for things like “cash advance fee,” “late payment fee,” and “over-limit fee.” It’s important to avoid these types of charges because they can add up quickly.

How to rebuild your credit score

Credit cards are one of the best tools to build and repair credit. But here’s the paradox: If your score is less than ideal, qualifying for one can be difficult. Whether you’re dealing with the effects of late payments or something as serious as bankruptcy, secured credit cards are probably your best solution for rebuilding credit.

Secured credit cards aren’t financed by the issuer; they’re financed by you. That makes them less risky for lenders, which in turn relaxes the qualification guidelines. Most credit cards require a “good to excellent” credit score to apply, but secured cards are far more lenient.

Over time, using a secured card correctly will improve your credit score and greatly benefit your credit history;: a 10-year summary of all of the places from which you have borrowed money.

What is a good credit score?

Generally speaking, a credit score of 700 or greater is considered good while a score of 800 and up is considered excellent. Ultimately, it depends on which type of score you’re looking at. The credit scores most commonly used by lenders are provided by FICO® and VantageScore. Here’s how their ranges compare:

FICO Score Range
Very Poor 300-579
Fair 580-669
Good 670-739
Very Good 740-799
Exceptional 800-850
VantageScore Range
Very Poor 300-549
Poor 550-649
Fair 650-699
Good 700-749
Excellent 750-850

Having a good credit score is more important than it’s ever been. Not only does it affect your ability to qualify for a mortgage and other types of loans; it influences how much interest you’ll pay on that loan. The better your score, the better the rate you’ll get.

Can I get an unsecured card with no credit history?

The answer: Maybe. If you’re young or you’ve only ever used cash in the past then you may not have a credit history, which isn’t bad. It just means you may have limited credit card options starting out. The best unsecured credit cards for bad or average credit may also work for anyone with no credit history. The good news is that both cards on our list offer free pre-qualification checks so you can know the likelihood of getting approved in advance without having to put a hard inquiry (which can dock your credit score if done too often) on your credit report.

If you find that you don’t pre-qualify for these options, then you may need to start with one of the best secured credit cards. These cards require a security deposit to open a line of credit; however, with responsible use, you could get a full deposit refund and upgrade to an unsecured account in less than a year.

How do secured credit cards work?

To open a secured credit card account, you’ll be required to pay an upfront security deposit that functions as your credit limit. So if you put down $400, your credit limit will be roughly $400, minus the fees. Most secured cards have a minimum deposit of $200 and a maximum credit limit of $1,000.

Remember: No matter what type of card you have, you should use it just like cash. Always strive to spend only what you can pay off in full every month. Otherwise, you could incur interest payments that can severely impact your financial goals.

Can I get a secured card with bad credit?

Secured credit cards often don’t have the same rewards and benefits that unsecured cards do, but they have relaxed credit requirements. That’s why they’re a great choice for anyone with bad credit — and those who haven’t developed a credit history at all.

Here are some of our top picks for the best secured cards for bad credit:

  • Discover it® Secured: best overall
    The Discover it® Secured is one of the few secured cards that lets you build credit while simultaneously earning rewards. You’ll earn 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases every quarter, and 1% cash back on all your other purchases. Plus, you’ll get automatic cash back matching at the end of your first year.
  • Capital One® Secured Mastercard®: best for low fees
    With the Capital One® Secured Mastercard® you can open a line of credit with as little as $49 (based on your creditworthiness). Plus, except for a $10 or 3% transaction fee for cash advances (whichever is greater), there aren’t any fees.

Is it better to have a secured or unsecured credit card?

In general, it’s better to have the credit card that will help you meet your financial goals. In some cases that involve bad credit, that might be an unsecured card, but in other cases, you may need to start with a secured card.

The main difference between the two is that secured credit cards require collateral (typically a cash security deposit), whereas unsecured credit cards do not. You can use both cards the same way to make purchases.

If your credit score has been severely damaged, then you may need to start with one of the best secured credit cards. However, if your score is just fair or average, you may be able to start with one of the cards on our list. (Consumer credit reporting agency defines a FICO® Score of 300-579 as Very Poor and a score of 580-669 as Fair.)

Pros of unsecured credit cards for bad or average credit:

  • Establish a line of credit
  • No security deposit required
  • Higher credit limit

Cons of unsecured credit cards for bad or average credit:

  • Stricter approval guidelines
  • Higher interest rates
  • Potentially higher annual fees
  • Maintenance fees and other charges may apply

The good news is that using your card responsibly – such as paying in full and on time each month – will allow you to improve your credit score over time. You may be able to upgrade to an unsecured card with more favorable terms or even rewards.

Rules for getting a credit card with poor or average credit

Whether you’re trying to fix poor credit, or simply build your credit from the ground up, an unsecured credit card is your best bet. Not only do unsecured credit cards report to all three credit reporting agencies, but they also help you build credit without the use of a deposit.

Before you take the plunge, however, you should be aware of some simple rules that can help you make the most out of your unsecured card:

Rule #1: Know your credit score.

Before you consider applying for an unsecured credit card, you should first take some time to find out your credit score. To get a free copy of your credit score from at least two of the three credit reporting agencies, you can sign up for a free credit tracking site like CreditKarma.com or CreditSesame.com.

Rule #2: Only apply for cards you might qualify for.

If your credit score is under 700, you should definitely avoid applying for the best rewards credit cards. For now, stick to cards for poor or average credit, including any card on this page.

Rule #3: Use your card with caution.

Once you get approved for an unsecured credit card, it’s important to take things slowly. You should make purchases you can afford to pay off each month.

Editorial Note: Compensation does not influence our rankings and recommendations. However, we may earn a commission on sales from the companies featured in this post. To view a list of partners, click here. Opinions expressed here are the author's alone, and have not been reviewed, approved or otherwise endorsed by our advertisers. Reasonable efforts are made to present accurate info, however all information is presented without warranty. Consult our advertiser's page for terms & conditions.