If you have less-than-stellar credit or you’re new to credit, obtaining a useful credit card can be challenging but well worth the effort. When used properly, a credit card can help you build your credit score. This, in turn, can prove valuable in obtaining lower interest rates on mortgages and car loans and can even be helpful in getting approved for apartment rentals and certain employment.
For someone with tight finances, a credit card with no annual fee is important. Adding to your debt right out of the gate would be counterproductive. But can someone with bad credit qualify for a credit card with no annual fee? The answer is a resounding, “yes!”
Most often, if you have bad credit you’ll be limited to secured credit cards. You will find that most secured credit cards do not charge an annual fee. These cards are called “secured” credit cards because they are secured with money that you deposit to open an account. Your spending limit is equal to your initial deposit amount, however, you can raise your spending limit by depositing additional funds into your account.
The best secured credit cards report your information to the three major credit bureaus, so if you use your card wisely and make timely payments, you should see your score increase over time. In addition, some secured cards will give you the opportunity to “graduate” to an unsecured card with a higher spending limit.
Here are some top picks for credit cards with no annual fee for bad credit, as well as a few cards for those just starting out: