Best Secured Credit Cards with Guaranteed Approval
Worried about credit card approval because of your credit history? Want a guaranteed credit card to avoid an unnecessary inquiry on your credit report? While there are no truly guaranteed cards, secured credit cards are about as close as they come. Let's explore some of the best secured credit cards with nearly guaranteed approval, along with tips to improve your approval chances moving forward.
The Truth about Guaranteed Approval Credit Cards
You may have heard the phrase, "nothing in life is guaranteed." That applies to the credit card industry just as much as it does anywhere else. The fact is that there are no credit cards with truly guaranteed approval. There are, however, many secured cards that have an extremely high rate of approval.
What could cause you not to get approved for a secured credit card? For starters, you need to have sufficient funds to open the line of credit. Most secured cards require a $200 minimum deposit from a bank account. If you do not have a bank account or do not have enough funds, you may be denied approval.
Some secured cards also have stipulations for people who are in the process of filing bankruptcy. If your bankruptcy case is currently active, you may have to open an account after it is discharged.
With all of this in mind, most applicants are able to get a secured credit card regardless of their credit score or credit history. You won't be denied for having a low credit score, low income, or late payments in the past. You provide the funds for the credit line, so the chance of approval is extremely high. As long as you're aware of the card's terms, you should be able to apply without issues.
Best Secured Cards with Guaranteed Approval
It's impossible to label any credit card with "guaranteed approval," but these options are as close as they get. Here are some amazing, secured credit cards with easy approval and no minimum credit score required:
Applied Bank® Secured Visa® Gold Preferred® Credit Card
The Applied Bank® Secured Visa® Gold Preferred® Credit Card is an excellent choice for people with past credit challenges. The card comes with a 9.99% fixed APR that will not increase even after a late payment. No credit check or minimum score required for approval, and the credit limit for the card can be as high as $5,000 with appropriate deposits. Best of all, payments automatically report to all three credit bureaus.
Can I Get a Credit Card with Bad Credit?
Having a bad credit score may limit your credit card options, but it is possible to get a credit card with bad credit. The key is to apply for the right types of credit cards and then use your card as a gateway toward a better card in the future. Most likely, you will not qualify for an unsecured card with a strong rewards program or low interest rate. If you get an unsecured card, it will probably have a low line of credit, high interest rate and/or high fees. If you pay off your balance each month, you can bypass most of these costs and still improve your credit score.
On the other hand, you can qualify for a good secured credit card even if you have a bad credit score. This is because you provide the funds for the line of credit. The card issuer has little to no risk in the transaction, so they are willing to work around your previous credit challenges. You could get a card with a low APR, low annual fee, and high credit line (with corresponding deposit). Explore your options carefully when selecting a bad credit credit card.
How Do Secured Credit Cards Work?
Secured credit cards are like traditional credit cards that you provide the funding for. When you open your account, you will provide a security deposit that acts as the credit line for the card. This is usually a minimum of $200, but it can be as high as $5,000, depending on the card and your available funds.
Use the secured card each month like you would any other credit card, and then make a minimum payment or pay off the balance when it's due. You may wonder, "Why would I repay my own money?" It's so the secured card issuer has a payment to report to the credit bureaus. Your monthly payments get reported to help boost your credit score, and you can cancel your card at any time. When you cancel or upgrade your card, the security deposit will be refunded to your bank, minus any outstanding fees on the account.
For the most part, the only fee you have to worry about with a secured credit card is the annual fee, charged when you open your account. You will have to pay interest if you carry a balance month to month, but you can avoid that interest if you pay off the balance within the grace period. This is true for any credit card with a grace period. Get in the habit of paying off your balance, and you'll save yourself a tone of money in interest payments.
How to Get Unsecured Credit after Bad Credit
A secured credit card can be an excellent stepping stone for future credit opportunities. Past credit challenges don't have to stop you from the life you want to live. You simply need to make smart financial decisions to put yourself on a new path. If you want a rewards card, a home loan, a car loan, or similar line of credit, you need to make wise choices and manage your income correctly. Here are some tips for getting unsecured credit after bad credit.
- Start with a secured credit card. Secured cards are much easier to qualify for than unsecured cards. In fact, they have nearly guaranteed approval. You can use a secured card to build your credit score, refresh your credit portfolio, and learn wise money-management habits for the future. If you find yourself overwhelmed with credit card payments, the damage is minimal because you funded the line of credit. In other words, you're much less at risk of crippling debt if you get behind with a secured credit card.
- Create a routine of making purchases and paying them off promptly. We encourage you to use your secured card as often as possible, but only if you have enough money to cover your purchases. Save money in your bank account to cover the purchases you make with your card, and then pay off your balance before the grace period is over. Doing this persistently will show that you can safely use a card without going into debt, thereby improving your credit chances for the future.
- Wait at least 6-12 months before applying for an unsecured credit card. The longer you can wait, the better your chances are of qualifying for a card when the time comes. Your credit score isn't going to improve overnight. It will take multiple months for your on-time payments to make a difference on your score. Be patient, and seek additional credit opportunities when the time is right.
- Graduate to an unsecured credit card from the same issuer. Many secured card providers have unsecured credit cards as well. You can 'graduate' from a secured card to an unsecured card after several months of good payment history. Your card issuer may provide this credit card offer to you automatically, or you may have to ask for it when you're ready. Your chances of approval with your existing card company may be higher than your chances with another company. They can see up-to-date information about your account, and you can build on the rapport you have with them.
- Make sure you have good credit card habits before getting a new card. If your past credit challenges were the result of poor card management, the last thing you want to do is get back into that cycle. You may have credit card offers before you're actually ready to take them. Put those to the side and work on your finances first. When you feel like you can confidently handle a credit card, look for the offer that best aligns with your overall needs.
The first step in your journey is finding a secured credit card to build credit. Explore the options here at Secured Card Choice to move forward with your credit building.