Credit card with high limit for bad credit

High Limit Credit Cards for Bad Credit

Credit card with high limit for bad credit

If you have poor credit and are seeking high limit credit cards, don’t get your hopes too high, but don’t give up, either. Begin your quest with the knowledge that what you are seeking is nearly impossible, for good reason.

That said, here are a couple of pointers to consider as you try to obtain one of the few high limit credit cards for bad credit.

That means that you need to probably plan on putting a security deposit down with a credit card company to obtain a card that you can use. If you don’t have a large amount to put down (which would typify most people with bad credit), then start with what you have and add to it as you are able.

As you use your secured card wisely, the sponsoring bank could raise your limit even beyond your deposit. The right combination of careful spending and continual deposits can lift your limit to the regions where you want it to be — closer to $5,000 than $500.

If you have bad credit, this somewhat long process is one of the only sure ways that you can re-build your credit score and raise that number to the region where you want it. As that rating rises, if your bank does not raise your credit limit as you desire, you can cancel your card and shop around for a much better deal. With a

higher credit score, you will find many more banks waiting with open arms to sign you up to a credit card with a high limit.

If you go unsecured, don’t be disappointed if your limit does not meet your expectations. The fact is that people with bad credit are a very poor risk for banks and credit unions, and the higher the credit limit extended, the more risk such people are. That is the way of the world, so don’t expect a $10,000 limit if you have poor credit, it’s not going to happen.

However, you can perhaps take one zero off that limit and begin to restore your credit rating. Don’t forget that part of the unsecured game is paying a monthly or annual fee, in addition to a fairly high interest rate. That is some of the literal price that you have to pay to get back into the credit arena and begin to win a few battles.

High limit credit cards for people with bad credit are somewhat of an oxymoron, but there are a few paths that you can take to get to a high limit card in a reasonable amount of time. Remember that such cards can be both a blessing and a curse: if you are too tempted to max out on easy credit, you could end up abusing it and falling back to where you first began–with a rock-bottom credit score to show for your trouble.


Best Credit Cards for Bad Credit

Published August 21, 2017 Markets

A low credit score doesn't necessarily preclude you from getting a credit card. It just means you may have to be more strategic about which cards you apply for. A number of major credit card companies have relaxed lending standards in recent years, making it possible for people who have a poor credit history to get approved.

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Here are a few credit cards to consider if you have bad credit, and how to shop for the best card to fit your needs.

Secured credit cards offer easy approvals

The best way to maximize your chances for approval is to apply for a secured credit card, which are by far the most forgiving when it comes to bad credit history. A secured credit card works just like any other card with one exception: You'll need to put up some collateral.

The prototypical secured card offers a $250 credit limit after the applicant makes a $250 deposit. In effect, the deposit virtually eliminates the risk that the bank loses money. Thus, even people who have very low credit scores can still be approved for a secured card.

Tying up $250 for a deposit on a secured credit card may not be ideal, but the benefits can be tremendous. Secured credit cards report your balances, payment history, and other factors to the major credit bureaus just like any other credit card. Over time, as you build good credit history, many secured cards convert to unsecured cards, at which point the card company will return your deposit.

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It pays to be selective. All of the cards on Fool.com's list of the best secured cards report to all three major credit bureaus and do not charge annual fees or maintenance fees. We can't say that for other secured cards, however. In an extreme case, one secured card charges an annual fee of $125 plus maintenance fees that add another $120 per year on top. Tread very carefully with secured cards and stick to offers from well-known card issuers.

One secured card that takes a top spot in our rankings offers access to a free FICO score. That can be a big advantage, as you'll be able to watch your score improve over time.

Starter unsecured cards are a good choice, too

If you don't have any recent bankruptcies or late payments of 30 days or more in the past year or so, you're likely to get approved for an unsecured credit card with a low credit limit.

Cards that are less selective generally have the followings traits:

  • No or low sign-up bonuses. If the bonus is more than $200 or so, it's probably geared toward customers with high credit scores.
  • Balance transfers as a key feature. As a rule of thumb, 0% promo APR balance transfer cards are generally a good place to start because they are marketed toward people who have credit card debt (and thus lower scores, on average).
  • No travel rewards. Almost exclusively, travel rewards cards are designed for people with high incomes and spending habits.
  • No annual fees. Annual fees are usually reserved for cards with above-average rewards for people with high credit scores. If building up your credit score is the goal, a no annual fee card is a really good choice, anyway.

Don't fear rejection. In many cases, banks might deny your initial application, only to suggest that you open a different credit card from the same bank. It's common for banks to have as many as 20 or even 30 different card choices. Apply online if possible, since you'll get a quick decision as well as a referral to an alternative if your first pick doesn't pan out.

If all else fails, store cards are admittedly known for having high acceptance rates. Whatever you do, though, don't keep a balance -- store card APRs are notoriously higher than traditional "general purpose" credit cards.

How to build (or rebuild) your credit score with a credit card

If you follow just five simple rules, you can turn a bad credit score into an excellent credit score with just one credit card and a little time.

Here's a road map for how to use a credit card to build credit:

  1. Use the card once a month for a routine purchase. Some people like to charge a tank of gas to their card. Others like to set up their card to pay their Netflix subscription or to pay a water bill. Regardless, if your sole goal is to build your credit, one purchase a month is good enough. The point is to keep the account open and show some activity. You can worry about things like cash back rewards and other perks at a later date.
  2. Pay your bill on time and in full each month. You'll receive a statement in the mail or online each month, which will show your recent purchases, the amount due, and the due date. To avoid interest on the balance, always pay the "statement balance" amount each month, which is typically greater than or equal to the "minimum payment." It's a myth that carrying a balance and paying interest is good for your credit score.
  3. Don't use the cash advance option. You can use your credit card like a debit card to take out cash against your credit limit at an ATM. Don't do it. Card companies typically charge fees on cash advances, and unlike purchases, interest begins to accrue immediately in most cases. Just forget this feature exists.
  4. Don't have a balance greater than 30% of your limit. If your limit is $500, try to keep your balance lower than $150 at all times. If your limit is $250, keep your balances under $75. One of the most important factors that goes into a credit score is your credit utilization ratio, or your balances divided by your credit limits. A balance equal to less than 30% of your credit limit is best. (This is one reason why I recommend making just one purchase a month, as it will keep your utilization ratio to an ideal level.)
  5. Don't apply for more cards. One credit card will do the trick. Five credit cards won't improve your score five times faster, but it will increase the risk you forget to make a payment, putting you back at square one. Besides, in the short term, several applications can hurt your score. Millions of people have above-average credit scores thanks to just one credit card, and one credit card only.

If you follow these five steps, it'll only be a matter of time until your credit score rises higher and higher. With each passing month, you'll have another month of on-time payments and a low credit utilization that will be reported to the credit bureaus.

The truth is that a little effort goes a long way. Having just one credit card account with a good payment history can do a lot to paper over bad credit records from the past. But the best thing you can do is start sooner rather than later. You'll never know when you'll need a good credit score, and when you need it, you won't have enough time to improve it.

5 Simple Tips to Skyrocket Your Credit Score Over 800!

Jordan Wathen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.


The Best Credit Cards for Bad Credit

Latest Update September 29, 2016

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The best credit cards for bad credit are the ones that help you reliably bulk up your credit score until you're able to graduate to card with better terms, be it a lower APR or bigger rewards. Our top picks are all cards that encourage on-time payments by giving easy access to your credit score — and a couple even come with cashback perks.

Earn 2% cash back on restaurants and gas (on up to $1,000 every quarter) and 1% on everything else. Balance transfers get an intro APR of only 10.99% for the first six months, and you can track your FICO score with every statement.

Pay as low as $49 for $200 of credit.

No security deposit, plus the chance to earn cashback rewards.

Pretty much all the best credit cards are designed for people with good or excellent credit scores. If you’ve got bad credit, you might feel like you’re locked out of opportunities to even access a credit line and rebuild your credit history, let alone perks like cashback rewards.

Credit card with high limit for bad credit

The good news: Many lenders offer what are called “secured cards.” You secure the card by making a cash deposit, and in return get access to an equivalent line of credit. After you prove that you can use the credit responsibly (usually over the course of a year), you can get your deposit refunded and graduate to a standard credit card with a higher credit limit and better terms.

Our favorite is the Discover it® Secured Credit Card - No Annual Fee*, which gets you 2% cash back on purchases at restaurants and gas stations, and 1% on everything else. (It also shows you your credit score along with every statement, so you can watch it climb as you make payments on time or in full.) The Capital One® Secured Credit Card is another interesting option, especially if you don’t have a lot of cash lying around. Rather than pay a deposit that matches your line of credit, you pay $49, $99, or $200 to earn an initial limit of $200, which increases if you make your first five payments on time. You get access to more credit and your credit score will steadily improve until you find yourself eligible for some of the best low interest cards, best travel cards, best rewards cards and more.

Other lenders offer unsecured (aka standard) credit cards designed specifically for people with bad credit. With these cards, you don’t need to make a deposit to get your line of credit — but you still need to use that credit responsibly in order to build your credit score (and avoid the higher interest rates that are typically baked in). A good card to consider is the Credit One Bank® Unsecured Visa® for Rebuilding Credit. It actually has a really reasonable 15.90% – 24.40% APR and opportunities for cashback rewards, but be forewarned: it comes with some tricky fine print you’ll want to make sure to read (and agree with) when you get pre-qualified.

How We Chose the Best Credit Cards for Bad Credit

There aren’t a lot of credit cards for bad credit out there, which meant we were looking at a limited pool of options. However, even within this small pool, it was easy for a few cards to rise to the top.

Knowing that people with bad credit might have gotten that way because they have trouble making regular on-time payments, we eliminated cards that had a penalty APR. The Bank Americard® Secured Credit Card, the Citi® Secured MasterCard®, the Milestone® Gold MasterCard®, and the Indigo® Platinum MasterCard® will all bump up your APR to as high as 29.99% if you miss a payment, and that penalty APR will apply to future balances as well. Yowch.

The Total Visa® Unsecured Credit Card doesn’t have a penalty APR, but its everyday variable APR is 29.99%, so we eliminated that one too. The OpenSky® Secured Visa® Credit Card often shows up on “best secured card” lists, especially because its 17.64% APR is low compared to other secured card options, but it has a penalty APR of 21.75% and comes with a number of hidden fees, including the $10 same-day phone payment fee and a $3 “paper statement fee” if you choose to receive your statement by mail. The primor® Secured Visa and MasterCard will actually tack on up to $49 if you receive a credit limit increase.

That left us with seven top options. Of these seven, the Discover it® Secured Credit Card – No Annual Fee*, the Capital One® Secured Credit Card, and the Credit One Bank® Unsecured Visa® for Rebuilding Credit are our favorites, first because of the benefits they offer, and second because all three cards give you tools to help you monitor your credit score as you work toward better credit.


credit card with high limit for bad credit

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6 Best Secured Credit Cards to Rebuild Credit – Reviews & Comparison

Credit card with high limit for bad credit

How’s your credit these days?

If you’d prefer not to answer that question, you’re not alone. Millions of Americans have imperfect credit due to bankruptcy, foreclosure, crushing medical or student loan debts, and other financial black marks. A bad credit score can affect your ability to secure an affordable home loan, rent an apartment, get a cell phone, and even find a job. While credit counseling and debt management plans can help you repair your credit over time, there’s no magic cure.

For other folks, the problem isn’t bad credit so much as no credit. Consumers who haven’t previously used credit are ciphers to lenders and credit card companies, which are understandably wary about lending to people without a track record of timely repayments.

Whether you’re dealing with the negative effects of bad credit, or simply don’t have much of a credit history to speak of, applying for a secured credit card could end up being a critical first step on your path out of the credit wilderness.

Most credit cards are unsecured. Unsecured cardholders aren’t required to put up any collateral before using their cards.

Secured credit cards are different. They require cardholders to make cash deposits, usually equal to (and sometimes greater than) their initial credit limits, before making charges. These deposits, and the corresponding credit limits, are often low compared to unsecured credit cards’ spending limits – rarely more than $500 at the outset. Over time, issuers reward cardholders for timely payments by increasing their spending limits, in many cases without asking for an additional deposit.

Secured card issuers scrupulously report cardholders’ spending and payment patterns to consumer credit bureaus. For cardholders who use their cards judiciously and make timely payments, this builds and improves credit over time. For cardholders who pay their balances late or not at all, or max out their cards’ spending limits, this ongoing reporting can have negative consequences.

Many cardholders use secured cards temporarily, for credit-building or -improvement purposes. Once their credit is on better footing, they close their accounts and receive their deposits back. Many secured credit card issuers allow cardholders in good standing to graduate to unsecured credit cards after a year or two, eliminating the hassle of closing accounts and applying for new cards.

With these basics in mind, here is a look at the best available secured credit cards.

1. Capital One® Secured MasterCard®

Minimal Fees; Possibility of Credit Limit Greater Than Initial Deposit; Credit Limit Increases Without Additional Deposits

The Capital One Secured MasterCard is one of the few secured credit cards that entitles some cardholders to a credit limit greater than their initial deposit. It’s also noteworthy for comparatively low fees and a smooth process for qualifying for credit limit increases. Said increases don’t necessarily require additional cash deposits, further reducing the card’s cost. This card reports payments and credit utilization to all three major consumer credit bureaus: Experian, Equifax, and TransUnion.

Deposit Requirements, Benefits, and Restrictions

The Capital One Secured MasterCard requires a minimum refundable security deposit of $49, $99, or $200, depending on your credit profile. You need to make the deposit within 80 days of applying for the card. Regardless of your deposit size, your initial credit limit is at least $200. It can range up to $3,000, depending on your creditworthiness.

To raise your credit limit, you can make additional deposits in $20 increments, up to the $3,000 maximum. If you demonstrate a pattern of reliable payments over several consecutive billing cycles, you may qualify for a credit limit increase without an additional deposit. Capital One has sole discretion over amount and frequency of these “free9rdquo; credit limit increases.

  • Fees: There’s no annual fee or foreign transaction fee. Cash advances cost the greater of $10 or 3% of the advanced amount, plus a 24.99% APR. Late payments cost $35 each. You can’t use this card for balance transfers.
  • APR: The purchase APR is 24.99%. It varies depending on prevailing interest rates. Notably, there’s no penalty APR.
  • Other Perks: You get free, unlimited access to your credit score through the Capital One Credit Tracker, which also includes a “what-if simulator” that lets you run different scenarios to predict changes in your credit score and debt load.

See our Capital One Secured Card Review for more information. Find out how you can apply for this card here.

Reasonable APR; Relatively High Credit Limit

The Citi Secured MasterCard has roughly average fees and APRs. Its credit limit is above average, making it ideal for cardholders with high spending needs. However, the credit limit is always identical to the deposited amount – there’s no way to increase your credit limit without making an additional deposit. Also, Citi automatically denies card applicants who’ve recorded a bankruptcy within the past two years – a harsher position than some other secured card issuers.

Deposit Requirements and Benefits

Once you’re approved for the Citi Secured MasterCard, you have 30 days to deposit as little as $200 or as much as $5,000. You can make additional deposits to raise your credit limits, but your funds are tied up for at least 18 months and don’t earn interest during that time.

f you make timely payments for the duration, Citi may elect to return your deposit and allow you to continue using your card. Your payment and credit utilization patterns are automatically reported to all three consumer credit bureaus.

  • Fees. There’s a $25 annual fee. Foreign transactions cost 3%. Cash advances cost the greater of $10 or 5%, and balance transfers cost the greater of $10 or 3%. Late and returned payments cost $35 each.
  • APR. The regular purchase and balance transfer APR is 21.99% and varies depending on prevailing interest rates. The cash advance APR is 25.24%, and the penalty APR ranges up to 29.99%.
  • Other Perks. Citi’s perks include complementary auto insurance on car rentals charged to your card, as well as zero-liability fraud protection.

3. OpenSky® Secured Visa® Credit Card

Low APR and Reasonable Fees; No Credit Check Necessary With Application

Although it comes with a moderate annual fee, the OpenSky Secured Visa credit card boasts one of the lower secured credit card APRs around. It also doesn’t require a credit check with your application, meaning it’s a great choice for folks with poor or spotty credit. Negatives include a maximum credit limit lower than some competing cards and no balance transfers.

Deposit Requirements and Benefits

To get started with the OpenSky Secured Visa, you need to make an upfront refundable deposit of at least $200. Your deposit can be as high as $3,000, depending on your creditworthiness. Your credit limit is always equal to your deposited amount.

OpenSky reports to all three credit reporting bureaus. One significant drawback is that unlike some other issuers, the OpenSky Secured Visa doesn’t allow for a transition from secured to unsecured. You can keep your account open as long as you like, but you don’t receive your security deposit back until you request to cancel the card and pay your balance in full.

  • Fees. There’s a $35 annual fee. Cash advances cost the greater of $6 or 5% of the advanced amount. Late payments cost $27, and returned payments cost $25. Foreign transactions run 3% of total transaction amount.
  • APR. The regular purchase and cash advance APR is 17.64%, depending on prevailing interest rates. The penalty APR ranges up to 21.99%. Notably, OpenSky doesn’t charge interest during the first billing cycle. In other words, there’s effectively a one-month 0% introductory APR.
  • Other Perks. OpenSky has lots of credit education material for inexperienced credit users. It also has other financial products, including home loans and consumer bank accounts, through Capital Bank, its parent company.

Find out how you can apply for this card here.

Reasonable APR; Laid-Back Credit History Requirements; Earn Interest on Your Deposit

The U.S. Bank Secured Visa Card’s biggest advantages include easy approval for applicants with poor credit and a reasonable APR (relative to other secured credit cards). The unusually long grace period of up to 30 days, compared with the more typical 20- to 25-day grace period for this card class, is a useful backstop against late payments. Drawbacks include somewhat high fees.

Deposit Requirements and Benefits

To get started with the U.S. Bank Secured Visa Card, you need to make a deposit of at least $300 and as much as $5,000, depending on your creditworthiness. Your credit limit is always equal to your deposit amount. Said deposit is held in an FDIC-insured, interest-bearing (0.05% to 0.10% APY) U.S. Bank savings account, rather than a no-interest escrow account, as is the case with the Citi Secured MasterCard.

If you make timely payments for at least 12 months, you’ll likely qualify for an unsecured credit card and receive your security deposit back in full, with interest.

  • Fees. There’s a $29 annual fee. Late payments cost $35, and returned payments run $38. Balance transfers cost the greater of $5 or 3% of the transferred amount, while cash advances cost the greater of $10 or 4%. Foreign transactions cost 2% when denominated in U.S. dollars, and 3% when denominated in foreign currency.
  • APR. The regular purchase and balance transfer APR is 19.24%, variable with prevailing interest rates. The cash advance APR is 24.24%.
  • Other Perks. The U.S. Bank Secured Visa Card comes with nice fringe benefits, including complementary insurance when you charge a car rental purchase to your card.

Find out how you can apply for this card here.

5. Wells Fargo Secured Visa® Credit Card

High Credit Limit; Reasonable APR

The Wells Fargo Secured Visa Credit Card comes with a very high credit limit ($10,000) and boasts a reasonable APR (19.24%). Fees are a bit on the high side, but not overwhelming. Wells Fargo shares your payment and credit utilization information with all three credit reporting bureaus.

Deposit Requirements and Benefits

To get started with the Wells Fargo Secured Visa Credit Card, you need to make a deposit of at least $300 and no more than $10,000. Your deposit is your credit limit, and you can add more funds at any time. After 12 months of timely payments, Wells Fargo reviews your account and may upgrade you to an unsecured arrangement, refunding your security deposit in exchange.

  • Fees. There’s a $25 annual fee. Balance transfers cost the greater of $5 or 5% of the transferred amount. Cash advances cost $10 or 5%. Late and returned payment fees run $37. Foreign transactions cost 3% of the total transaction amount.
  • APR. The regular purchase and balance transfer APR is 19.24%, variable based on prevailing interest rates. The cash advance APR is 24.24%.
  • Other Perks. Wells Fargo offers numerous fringe benefits, including a cell phone insurance policy (up to $600 to cover loss or damage) for devices purchased with the card.

Find out how you can apply for this card here.

6. Merrick Bank Secured Visa® Card

Relatively Low APR; Relaxed Credit Standards

Merrick Bank’s Secured Visa credit card makes no bones about being for consumers with poor credit. Its approval standards are very laid back, so it’s definitely worthwhile to apply even if you’ve been denied by other secured credit card issuers. A relatively low APR helps with the ongoing cost of the card, though higher than average annual fees cut into those savings.

Annoyingly, you’re not allowed to make balance transfers with this card. Merrick Bank does report your payment and credit utilization information to all three credit bureaus though.

Deposit Requirements and Benefits

Merrick Bank lets you deposit as little as $200 or as much as $3,000. You’re encouraged to deposit as much as you feel comfortable depositing – your deposit isn’t limited by your credit profile, only by Merrick’s $3,000 limit. Your credit limit is always equal to your deposit amount. Your deposit is FDIC-insured, but doesn’t earn interest.

Merrick Bank doesn’t automatically convert its Secured Visa into an unsecured card. If you want to graduate to an unsecured card, you need to apply for a Merrick Bank (or other issuer’s) unsecured card. To get your deposit back, you need to close your Secured Visa Card account.

  • Fees. There’s a $36 annual fee for the first year and a $3 monthly fee thereafter. The cash advance fee is the greater of $10 or 4% of the advanced amount. Foreign transactions cost 2% of the total transaction amount. Late and returned payments both cost $38.
  • APR. The regular purchase APR is 17.70%, and the cash advance APR is 22.70%.
  • Other Perks. You’re entitled to a free FICO score every month your account is active. Merrick Bank also offers RV loans, which come in handy for folks who want to take road trips or cross-country driving vacations in comfort.

Find out how you can apply for this card here.

Each secured credit card on this list is designed to boost folks with poor credit or spotty credit histories. However, they can’t single-handedly dig their users out of financial holes or accelerate them painlessly down the road to the promised land of easy, low-cost credit.

Building and improving credit takes time and discipline. In addition to applying for a secured credit card and making timely, in-full payments, follow these straightforward tips:

  • Pay all bills, including utility bills and rent payments, on time
  • Keep your debt utilization ratio – the sum of your credit balances divided by the sum of your credit limits – below 30%, if possible
  • Don’t open multiple accounts at once
  • Avoid closing too many accounts at once
  • Check your credit score regularly and remember to order your free annual credit report from AnnualCreditReport.com

If you play your cards right, you could find your credit situation significantly improved in less time than you ever thought possible.

Do you use secured credit cards? Which is your favorite?

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.