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What Is the Best Credit Card If You Have Bad or No Credit?

If you are fortunate enough to have earned a high credit score, choosing the credit card that is right for you probably means sifting through the dozens of preapproved options you are sent weekly. However, if you have bad credit, or no credit at all, your pool of options is likely much smaller. Below, we explain how to find the right credit card if you have bad or no credit history.

WalletHub, a financial services site, recently worked with a team of experts to run the numbers and determine which cards are ahead in various categories for 2018, including credit cards that cater to people without good credit.

If you are having trouble getting approved because your credit history is limited, WalletHub recommends the Capital One Platinum Credit Card. This card offers protection against fraud and has no annual fee. Users also receive access to a higher line of credit after they make their payments on time for five months.

However, if your credit history is questionable, WalletHub suggests picking the Discover It Secured Credit Card with no annual fee. This card offers 2 percent cash back at restaurants and up to $1000 at gas stations, plus 1 percent cash back on everything else. All the cash back you earn is doubled at the end of the first year.

This card will also require you to put down a security deposit of at least $200 to help establish your credit. Your deposit will be refunded when you transition to an unsecured line of credit, as long as you've used the card responsibly.

Secured cards like this are a good option for people without credit or people who have low credit scores because the deposit usually matches the line of credit. However, this doesn't mean the card will work like a debit card. The money doesn't deduct automatically from your account when you swipe and you will still have to make monthly payments.

These credit cards can also help users learn how to handle their credit more responsibly because it is still possible to fall into the red when you use a secured card too. According to Credit Karma, "You can still accumulate debt if you make purchases and fail to pay your bills on time. The amount you owe can quickly grow beyond the deposit you made, thanks to interest." But if you pay off your bill every month, using a secured card will give you the opportunity to build credit and eventually transition over to a traditional, unsecured card.

Not only are these cards good for helping people with bad or no credit, they can also be useful for people who have claimed bankruptcy in the past. Although many people are afraid that filing for bankruptcy will ruin their credit history forever, these two credit cards can help you easily rebuild your credit after your bankruptcy has been completed. If you need help rebuilding your credit after bankruptcy, the Capital One Platinum Credit Card and Discover It Secured Credit Card might be the right options for you.

Contact our Rancho Cucamonga personal finance attorneys to find out how we can help you today.