The Best Subprime Credit Cards of 2023

redit cards can be an essential financial tool for many individuals, providing convenient credit access and helping build a good credit history. But for those with poor or no credit, getting approved for a credit card can be a challenge. It's a classic chicken and egg situation - to have good credit, you need credit cards, but to get credit cards, you need good credit.

Fortunately, subprime credit cards are available for people struggling to build or rebuild their credit. This article will discuss what subprime credit cards are and the best subprime credit card options available.

Understanding Subprime Credit Cards

Subprime credit cards are designed for people with bad or limited credit history. These cards come with comparatively higher interest rates, fees, and lower credit limits. But, they offer the opportunity to people with bad credit scores or no credit history to rebuild or establish credit.

Factors to Consider When Choosing a Subprime Credit Card

Credit cards are the maker or breaker of your credit history. So, you must consider several factors before choosing a subprime credit card. Here are a few factors to consider:

Interest Rates and Fees

Usually, subprime credit cards have higher interest rates and fees than traditional credit cards. But, it's essential to review the card's terms and conditions to understand the interest rates and associated fees, such as annual, late payment, and balance transfer fees. Make sure that the fees and rates are affordable.

Also read: Can Credit Card Fees Be Waived?

Credit Limit

Subprime credit cards may have lower credit limits compared to traditional credit cards. Thus, choosing a card with a limit appropriate to your needs and spending habits is essential. You don't want to overspend the limit, right?

Rewards and Benefits

Some subprime credit cards may offer rewards programs or benefits, such as cashback or travel rewards. Reviewing the card's rewards program to determine if it is worth the potential fees and interest rates is essential.

Credit Reporting

Choosing a subprime credit card that reports to all three major credit bureaus is essential. This will allow you to build or rebuild your credit history.

Best Subprime Credit Cards

Plenty of subprime credit cards are on the market, and you might be confused about which one to choose. Here are our recommendations:

Chime Credit Builder Secured Visa Credit Card

The Chime Credit Builder Secured Visa Credit Card is offered by Stride Bank and licensed by Visa USA Inc. This card is designed for individuals who want to build credit without a security deposit.

Key Features:

• No interest or annual fees.
• No minimum security deposit is required.
• No credit check is required to apply.
• No fees to apply or replace the card.
• Your spending is limited to the amount in the account, helping you avoid overspending and debt.
• Automatic payments can be set up to ensure on-time payments and build a credit history.
• An adjustable credit limit allows you to increase or decrease your limit based on your needs.
• Reports to all three credit bureaus.

Potential drawbacks:

• A Chime checking account is compulsorily required.
• Qualifying direct deposits of $200 or more.

The Chime Credit Builder Visa Card offers a convenient and affordable way to build credit without a security deposit. If you are looking for a card to help you build credit while keeping costs low, this card is worth considering.

Discover it Secured Credit Card

The Discover it Secured Credit Card is issued by Discover, one of the largest credit card issuers in the United States. It is designed for people with poor credit or no credit history and is a great way to build credit while earning rewards.

Key Features:

• No annual fee.
• 27.74% Standard Variable Purchase APR.
• A security deposit of at least $200.
• Each quarter offers 2% cash back on up to $1,000 combined purchases at gas stations and restaurants.
• Automatic 1% unlimited cash back on all other purchases.
• Comes with a free FICO credit score on monthly statements, online and mobile app.
• No credit score is required to apply.
• No foreign transaction fees and over-limit fees.
• Reports to all three major credit bureaus.
• Paying late won't raise your APR and no fee on your first late payment.

Potential drawbacks:

• 27.74% Standard Variable Purchase APR.
• Security deposits of $200 or more.

Overall, a Discover It secured credit card can be an excellent option to build or rebuild your credit while earning rewards.

Capital One Quicksilver Secured Cash Rewards Credit Card

The Capital One Quicksilver Secured Cash Rewards Credit Card is a rare find for individuals with poor credit as it provides rewards and several other features. Issued by Capital One, one of the largest credit card issuers in the United States, this card is designed to help people with bad credit scores.

Key Highlights:

• No annual or hidden fees.
• A $200 security deposit is required for a $200 initial credit line.
• 29.99% variable APR.
• Unlimited 1.5% cash back on every purchase.
• $0 Fraud Liability such that you won't be responsible for unauthorized transactions.
• Higher credit line review in as little as 6 months with no additional deposit.
• With responsible card use, you could earn your deposit back and upgrade to an unsecured Quicksilver card.

Potential drawbacks:

• 29.99% Standard Variable Purchase APR
• Security deposits of $200 or more.

Overall, if you're looking for a credit card that offers rewards, no annual or hidden fees, and is ideal for individuals with poor credit, the Capital One Quicksilver Secured Cash Rewards Credit Card is worth considering.

Petal 2 "All rewards, No Fees" Visa Credit Card

The Petal 2 "All rewards, No Fees" Visa® Credit Card is an excellent option for individuals with limited or no credit history. This card is issued by WebBank and doesn't require any deposits to get started.

Key Features:

• No annual, late, foreign transaction, or other fees.
• Variable APRs ranging from 17.74% - 31.74%.
• No credit check is required.
• Offers up to 1.5% cash back on eligible purchases.
• 2% - 10% cash back at select merchants.
• Reports to all three major credit bureaus.

Potential Drawbacks or Limitations:

• The variable APRs can be high for some individuals.
• The cashback rewards program requires 12 on-time monthly payments to reach its maximum potential.

Overall, if you want to build credit without worrying about fees or deposits, the Petal 2 "All rewards, No Fees" Visa Credit Card can be an excellent option. The cashback rewards program and credit-building potential make this card a standout option in the market.

OpenSky Secured Visa Credit Card

The OpenSky Secured Visa Credit Card is a good option for those new to credit, as it doesn't require a credit check and can help build credit. The card does have an annual fee, which may be worth it for some cardholders.

Key Features:

• Variable 21.89 % APR.
• $35 Annual fee.
• A minimum interest charge is $1.
• The minimum security deposit is $200.
• No credit check is required to apply.
• Flexibility to choose a deposit of up to $3,000.
• Easy approval process.
• Reports to all three major credit bureaus.

Potential Drawbacks:

• $35 annual fee.
• No rewards program.
• High variable APR of 21.89%.
• Security deposit tied up until account is closed.
• Late payment charge up to $38 and transaction fees are applicable.

Thus, the OpenSky Secured Visa Credit Card is a good choice for those new to credit and looking to build their credit history, but it may not be the best fit for those seeking rewards or a low APR and fees.

Capital One Platinum Secured Credit Card

The Capital One Platinum Secured Credit Card is an excellent option for rebuilding their credit. It is designed for individuals with damaged credit and no credit history. The card is issued by Capital One, one of the biggest credit card issuers in the United States.

Key Features:

• No annual or hidden fees and a quick approval process
• A minimum security deposit of $49, $99, or $200 for an initial credit line of $200.
• 29.99% variable APR.
• Higher credit line review in as little as 6 months with no additional deposit needed.
• $0 Fraud Liability protection for unauthorized charges.
• 24/7 account access through online banking and mobile app.
• Reports to three major credit bureaus.

Potential Drawbacks:

• This card requires a security deposit which may burden some users.
• The APR for this card is relatively high.

Overall, the Capital One Platinum Secured Credit Card is an excellent option for those who want to rebuild their credit without paying annual fees.

Mission Lane Visa Credit Card

The Mission Lane Visa Credit Card is designed for individuals building or rebuilding their credit. While it usually carries an annual fee, it may be an attractive option for those who do not want to tie up funds in a security deposit. It is issued by Transportation Alliance Bank, Inc. dba TAB Bank and is licensed by Visa USA Inc.

Key Features:

• An annual fee ranging from $0 to $59.
• APR. ranging from 26.99%-29.99% Variable APR.
• Higher credit line review in as few as 7 months.
• Quick and easy application process.
• No security deposit is required.
• Credit reporting to all 3 major bureaus.

Potential Drawbacks:

• High APR, ranging from 26.99%-29.99% Variable APR.
• Annual fee, ranging from $0 to $59.
• If you are charged interest, the minimum charge will be $0.50.

Overall, the Mission Lane Visa Credit Card can be a good choice for individuals looking to build or rebuild their credit who don't want to tie up funds in a security deposit. However, potential applicants should know the annual fee and high APR before deciding.

Credit One Bank Platinum Visa for Rebuilding Credit

Credit One Bank Platinum Visa for Rebuilding Credit is an excellent option for rebuilding credit with the reward options available. It is offered by Credit One Bank, known for its focus on providing credit card options to people with less-than-perfect credit.

Key Highlights:

• 28.49% variable APR.
• Annual fee of $75 for the first year, $99 annually thereafter.
• Earn 1% cash back rewards on eligible purchases.
• $0 fraud liability protection for unauthorized charges.
• Get rewarded for responsible credit use.
• Earn up to 10% more cashback rewards from some of the nation's top retailers.
• Automatic reviews for credit line increase opportunities.
• Free online access to your Experian credit score.
• Choose your monthly payment due date for added convenience.
• Customizable text and email alerts to never miss an account update.
• Manage your account with the Credit One Bank mobile app.

Potential Drawbacks:

• High variable APR of 28.49%
• Annual fee of $75 for the first year, $99 annually after that.
• Cashback rewards are limited to eligible gas, grocery purchases, and select services.
• Late or missed payments can result in high penalty fees and damage your credit score.

Bank of America Customized Cash Rewards Secured Credit Card

The Bank of America Customized Cash Rewards Secured Credit Card is a secured credit card offered by Bank of America, designed for individuals looking to build their credit. The card allows users to earn rewards on purchases without an annual fee.

Key Features:

• No annual fee.
• 27.74% variable APR.
• 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement & furnishings.
• 2% cash back at grocery stores and wholesale clubs.
• 1% cash back on all other purchases.
• A minimum refundable security deposit of $200 and a maximum of $5,000 are required to open an account.
• Access to monthly FICO® Score for free within the Mobile Banking app or Online Banking

Potential drawbacks:

• High variable APR of 27.74% on purchases and balance transfers.
• A balance transfer fee of $3 for each transaction.
• The rewards categories are limited to a specific selection.
• A security deposit is required to open the account.

The Bank of America Customized Cash Rewards Secured Credit Card is an excellent option for individuals looking to build their credit and earn rewards without paying an annual fee. While it has some potential drawbacks, its rewards program and ability to use mobile payments make it a card worth considering.

Tomo Credit Card

The Tomo Credit Card is a credit card offered by Tomo Credit, a financial technology company based in San Francisco. The card is designed for people who don't have a credit history or limited credit history and is issued by Community Federal Saving Bank.

Key Features:

• Low monthly fee of $2.99.
• Credit limit of up to $10,000.
• No interest charges.
• Expedited autopay options, including weekly, bi-weekly, and monthly payments.
• Non-U.S. citizens can apply for the card.
• No security deposit is required.
• No credit check or credit history is required.
• Free Benefits worth over $500.
• Reports to all three major credit bureaus.

Potential Drawbacks:

• The card has a monthly fee, which can add up over time.
• The credit limit may be lower than what other cards offer.

Overall, the Tomo Credit Card can be a good option for those who are building credit or don't have a credit history. Its unique features, such as alternative credit evaluation, expedited autopay, and reporting to all three major credit bureaus, make it a valuable tool for building credit. However, potential users should consider the monthly fee and potential limitations before applying.

Comparison of the Top Subprime Credit Cards

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Conclusion

Subprime credit cards are great opportunities for people with bad and no credit as it helps you build or rebuild your credit. But, selecting the right credit cards best suited to your financial needs and situation is essential. Additionally, responsibly using your subprime credit card, such as making timely payments and keeping balances low, is very important. By taking these steps, you can gradually improve your credit score and work towards achieving financial stability and a strong financial future.

Also read: What Is Cash Back Credit Card And How Does It Work?

References

• https://www.nerdwallet.com/best/credit-cards/bad-credit
• https://www.forbes.com/advisor/credit-cards/best/bad-credit/
• https://www.cnbc.com/select/best-credit-cards-for-credit-scores-of-580-and-below/
• https://www.bankrate.com/finance/credit-cards/bad-credit/
• https://www.investopedia.com/terms/s/subprime_credit_card.asp
• https://www.fool.com/the-ascent/credit-cards/bad-credit/