Good credit cards for dinged credit scores
If your credit is less than perfect, a secured credit card is often thought of as the only option.
And while it is one path to carrying plastic, that’s not the only good choice for people with credit issues. There are some unsecured cards willing to give consumers a second chance.
What’s the difference?
Secured credit cards require consumers to provide a cash deposit as collateral. That’s because the bank isn’t willing to take the risk that you’ll cough up the cash to pay the bill.
So they have little to no risk extending you the amount of credit equal to the cash deposit you provide. Think of it as paying your bill in advance, before you make a purchase.
Unsecured cards are lines of credit that don’t have any collateral backing them. So the bank sticks its neck out and crosses its fingers that you’ll pay your bill. Thus the debt is unsecure.
Here are two unsecured options for people with fair credit (generally a score between 650 and 699) who are looking to bolster that all-important credit score.
The Capital One No Hassle Cash Rewards Credit Card (www.capitalone.com) comes with an annual fee of $39 and a 0% introductory annual percentage rate until April 2012.
- Earn 2% cash back on purchases at gas stations and major grocery stores and 1% cash back on all other purchases.
- Earn up to 15% more cash back when you shop in Capital One's online mall with more than 300 national retailers.
- Unlimited cash rewards never expire, and you can get your cash back anytime as an account credit or check. You can even set up automatic redemption.
The standard APR after the intro period is a variable 17.9%, 19.9% or 22.9% (that's the prime rate of 3.25% plus 14.65%, 16.65% or 19.65%).
The Household Bank Rewards MasterCard (www.householdbank.com) is unique because there’s both an unsecured and secured credit version of the card.
Household Bank prequalifies applicants based on credit history for one or the other when they apply.
The unsecured card comes with a $39 annual fee, waived during the first year, and a 0% introductory APR for nine months.
- Earn 2% cash back on purchases.
- Points are redeemable for merchandise, gift certificates or cash back.
- Cash-back redemptions start at $25 for 2,500 points. Other reward redemptions start at 500 points.
The standard APR after the introductory period is 19.90% (prime plus 16.65%).
Compare these cards to the credit card offers in our extensive database.