Best Unsecured Credit Cards For Bad Credit With No Deposit?

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
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julio49021
 
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Best Unsecured Credit Cards For Bad Credit With No Deposit?

Postby julio49021 » Wed Oct 30, 2013 5:53 pm

Other than First Premier, do people who have a bad credit history have any other choices for unsecured accounts that don't require any sort of security deposit?

I am on the fence about biting the bullet and coughing up a couple hundred bucks for secured. Because when I look at the fee structures on the First Premier they are so so so insanely expensive that if I am going to pay that much, it might as well be for a deposit that I will get back later on.

The main reason I want unsecured is because I think it will look sketchy on my credit report if it is says 'secured' from Bank XYZ. Mortgage and loan underwriters don't want to see that. What they want to see are regular unsecured credit cards. My goal in 48 months is to buy my first home, nothing extravagant, but I will need to get financing and that is why I want to start rebuilding credit now.

Thanks in advance for any insight.


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otter
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Postby otter » Wed Oct 30, 2013 7:18 pm

Welcome to the forum, Julio!!!

One of the things I've learned on my rebuilding credit journey is that one should read as much as they can about what goes into a credit score and also that things which you may have heard or assumed could be wrong. It's always assumed that "secured card=bad", but that's not always true.

Sure, it's always better if you get a secured card for it to simply be listed as a "credit card" rather than a "secured card", but a human who sees a secured card might draw a different conclusion such as that you are trying to fix bad credit. The first two cards I've gotten recently are secured cards (and both report as secured)... as you can see from my signature, the two secured cards I got didn't stop me from being issued the seven cards which followed.

The two biggies when it comes to credit score are: (1) payment history- that's 35% of your FICO score and (2) utilization which is 30% of your score. If your payment history is bad, there's isn't a whole lot you can do about that, but that will improve with time and good recent history. Utilization is something you can control- you should try to keep your utilization under 10%.

You weren't extremely specific about the details of your credit (other than to say it's "bad") which could help me or someone else on this forum give you better guidance. There's bad credit and then there's only-first-premier-would-touch-you extremely bad credit. Have you burned any bridges with sub-prime lenders such as Cap One? Do you currently have charge-offs or any unpaid balances? Any repos? Without those, I can only give general advice. Here's some things you could try:

  1. Some Credit Unions offer secured cards. It's worth a try looking in your area for one who might want to give you a chance. This would help build a relationship with one of them since your goal is to ultimately get a mortgage loan.
  2. Some store credit cards are easy to get, but have low credit limits. So if you get one with a $200 limit you will only want to charge maybe $20 or less on it so your utilization will show less than 10%.
  3. If your credit is only marginally bad, there are a few cards which you can get which are attractive. Capital One has a few cards which are good for people with bad credit(although Cap One really isn't an issuer who will let you grow with them). Barclaycard has the NFL Extra Points Card with low fees (but high interest) with a so-so reward program. 60% of the people with that card have poor to fair credit.
  4. As I said, secured cards aren't as bad as you think... the problem is the "best" issuers of secured cards (Bank of America, US Bank) tend to be picky, but if you qualify for them they are likely to unsecure after a year of good use. Wells Fargo is kinda iffy amd aren't good about graduating unsecured cards. Some of the easier unsecured cards to get don't offer unsecured cards, but after a year- you're credit might improve enough to get unsecured cards anyway.
  5. Stay away from predatory card issuers. You mentioned First Premier and they are indeed the worst. It's good that you are looking at the fees they have and drawn the same conclusion that many of us did- that First Premier is pretty much a secured card issuer who doesn't return the deposit.
Hope this help and if you have any more questions, feel free to ask.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

whit
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Postby whit » Wed Oct 30, 2013 10:43 pm

would like to know what you mean by bad credit too if you don't mind.

how is your income/assets?

If you have a good amount stored away already, I would try and go to your bank/cu, and ask if they can extend you a credit card, without having to pay a fee..basically an unsecured card.

if you have history with your bank (banking there for years) and you haven't had anything like a few bounced checks, a couple of overdrafts, some returned items (you get the gist) then I would try and apply with them a basic credit card, and based on your history, see if you can get approved.

I helped someone with good income, not six figures but not making minimum wage either.. and had a good balance in account, few thousand, with none of those (bounced checks, overdrafts, returned item, etc, etc) but that person apparently did have delinquency because apparently a cc that was opened awhile ago..and that was the only cc..so limited history AND that d.

still got approved for a regular cc, prime lender, no fee..unsecured..but only $500 CL. We tried to get a CL increase and that was when we found out about the delinquency on ****** record.

so it's not impossible, but you do have work cut out.

go try with who you bank with first, is what i'd recommend..and then if not...see what other paths can be taken, maybe there are other banks who would be willing to. Wells Fargo does CD secured ones, without annual fee..and Chase does take your balance into consideration.

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Postby MemberSince99 » Thu Oct 31, 2013 8:48 am

Capital One.

Horrible customer service, their subprime cards will never grow with you, and they are a PITA taking 10 days to post payments to your account and restore your credit line back to the whole 500 again, but it's flat out the best way to start.

Once you can get better do it and don't look back.

whit
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Postby whit » Thu Oct 31, 2013 3:04 pm

I'd go for slate over capital one

if you must you must

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Postby MemberSince99 » Thu Oct 31, 2013 3:09 pm

He mentioned bad credit though. If not for that, definately go for better if you can get it. Otherwise, Cap One is the best rebuilder. If he can get Slate, sure I'd agree with that, it just didn't sound like he could.

whit
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Postby whit » Thu Oct 31, 2013 3:15 pm

you can it depends on the whole picture and type of bad credit

whole picture meaning history with the company he's trying to establish cc with in this case Chase, income, debt to income ratio, type of credits he has already, etc etc

it wouldn't hurt to try and apply, because there's instances where people get rejected for capital one and get slate and vice versa get rejected for slate and accepted for capital one

I guess personally I'm not into capital one, i would much rather try a bofa secured card and that's saying something..

julio49021
 
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Postby julio49021 » Thu Oct 31, 2013 4:38 pm

Very insightful. I'm glad I went thru the hassle of registering to post as I almost didn't because I hate having my email address on file with websites that might spam me.

The first two cards I've gotten recently are secured cards (and both report as secured)


I will cross the BofA and Wells Fargo secured cards off my list since they show that way on your credit report. I want one that looks like it is without a deposit. Do you know if there are any that do not specify that they are secured?

Barclaycard has the NFL Extra Points Card with low fees (but high interest) with a so-so reward program. 60% of the people with that card have poor to fair credit.


It looks like this has no annual fee. I will go for this but before I do I was wondering if any of the other Barclay cards that are unsecured are for bad credit scores. Because I'm not a football guy but will get it if no other choice.

would like to know what you mean by bad credit too if you don't mind.


Credit score in the low to mid 600's. Probably a 100 points lower than what I need to get the good cards. Income and assets are good. KeyBank is who I use for regular banking but their cards are thru someone else so I am not sure if it will help that I am a bank customer already with them.

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otter
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Postby otter » Thu Oct 31, 2013 8:13 pm

Low to mid 600's isn't extremely bad. I would definitely stay away from the First Premiers of the credit world because you can do better than that. I would watch who I applied for if I were you, because you want to make sure any hard inquires turn into cards rather than rejections.

As for secured cards, the problem is the "best" secured cards, those issued by prime lenders, report as secured. The lower tier ones which never graduate don't show as secured but typically they don't grow. You say you are going to apply for a home loan in 48 months, so by then, any "good" secured card will graduate. So if you applied for a Bank of America secured card, it will show as a secured card for a year, then graduate to unsecured and show as just a regular credit card. Given three more years, you will have probably received a few credit line increases and whoever underwrites your mortgage will never know that card was once secured.

Barclaycard's best "slam dunk" for bad credit is the NFL card. There are a few others which you might be a good match for- the Rewards Master Card for Average credit is a decent card. The Priceline and LL Bean Cards don't appear to be too hard to get(according to CreditKarma). You might want to use the Barclaycard card finder to see what you are a good match for.

Key Bank actually used to offer a secured card years ago and it was a good one which didn't report as secured and graduated fairly quickly. I think Key sold their credit card division years ago, though. It's a shame.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

mayrorofnothing
 
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Postby mayrorofnothing » Thu Mar 27, 2014 11:31 am

Great website! Been reading for 2 days! LOL!

Have seen reference to Secured cards being reflected on credit reports as "Secured". Is that a bad thing, meaning will it lower my credit score? Have no debt except our truck note (one yr left til paid of, never late. Ch 7 falls off in 2 yrs. One $171 med bill in collections from last year, Fico is 668. Few closed vehicle notes & store credit cards in the past, all positive. Bank with BofA and would like to open a Secured CC but now not sure if the fact it shows Secured on reports is a bad thing.

Thanks again for this awesome resource site!



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