Getting approved for a credit card can be rather challenging for people with not-so-ideal credit history, but that doesn’t mean it’s impossible. Guaranteed approval cards provide a solution to your credit card problems, as well as a way to reform your credit history.
In this article, we cover everything you need to know about guaranteed approval credit cards, from their types and requirements to some of the best secured and unsecured options you can apply for. If you’ve been struggling to acquire a credit card, you should definitely stick around.
What Does Guaranteed Credit Mean?
Before we shed light on some of the best guaranteed approval credit card options available, we first need to address the term ‘guaranteed approval,’ seeing as it can be a bit confusing or misleading.
First and foremost, you should know that there’s no such thing as “guaranteed approval” when it comes to credit-related dealings. Why? Because the government wants to prevent predatory lending practices.
So, if there’s no such thing as guaranteed approval, what exactly are guaranteed approval credit cards all about? Well, to put it simply, a guaranteed approval card is one with minimal requirements compared to standard credit cards.
Some guaranteed approval credit cards require an active checking account, whereas others require proof of income. Also, almost all guaranteed approval credit card issuers take credit scores into consideration. It may not be a deciding factor (depending on the issuer), but it’s certainly taken into account.
The criteria or minimums for the vast majority of guaranteed approval credit cards are pretty low, which makes them very easy to acquire. Nonetheless, failure to meet these minimums will take you off the “guaranteed” list.
Guaranteed approval credit cards are divided into two categories: secured and unsecured. Secured credit cards are the ones that come with some type of collateral, contrary to unsecured alternatives. That said, secured cards tend to have more requirements than unsecured cards.
One notable difference between secured and unsecured credit cards is that the former requires an initial deposit to be granted. You can’t acquire a secured credit card without making a deposit that’s equal to or greater than the minimum amount set by the issuer.
Best Unsecured Credit Cards
Unsecured credit cards are ones that don’t require an initial security deposit to be approved. They do, however, have strict and often challenging criteria for approval, with a few exceptions, of course. Below are some of the best unsecured guaranteed credit cards you can apply for today.
The Total Visa credit card offers users an initial credit line of $300. Not enough for your needs? You get to enjoy a credit line increase after 12 months of use and a performance review.
To acquire the Total Visa credit card, you must have a checking account for automatic monthly payments and fee drafts. The card also comes with a one-time setup fee of $89. The fee may increase in the event of a credit line increase.
The annual interest rate on this card is comparatively high at 34.99%. However, you can avoid this high APR by paying your balance within the grace period, which is the first 21 days of the billing cycle.
There are quite a few benefits to opting for the Total Visa card. Firstly, you get to enjoy free cash advances throughout the first year of use. With most other unsecured cards, you pay a fee of around 3% on your cash advances. With the Total Visa card, however, it’s completely free.
Secondly, the card’s annual fee decreases after the first year of use. You pay $75 the first year and then pay only 48% the following years.
The Surge Mastercard is another excellent unsecured credit card that accommodates applications from all credit types. The card has a variable APR that ranges from 24.99% to 29.99%. It’s designed primarily for people with bad credit.
The credit limit that comes with this card is between $300 and $1,000, depending on your score. The annual fee ranges from $75 to $99. Bear in mind that all of the card’s pre-qualified offers are dependent on creditworthiness.
One of the many benefits that this card offers is $0 fraud liability, which basically means that you’re not held accountable for any unauthorized charges. Another benefit is a potential credit limit increase after six months of use.
What’s even more noteworthy about this credit card is that it reports monthly to all three major credit bureaus, which enables you to re-establish your credit history without any hindrance.
Further, the card’s application process is super fast and easy, showing you the results within a matter of seconds. You can also check whether or not you’re qualified for the Surge Mastercard without impacting your credit score.
If you’re looking for a guaranteed approval credit card that enables you to pre-qualify without impacting your credit score negatively, you can’t go wrong with the Indigo Mastercard. With this card, you can pre-quality with a soft inquiry, which will fill you in on whether or not you should apply.
The Indigo Mastercard has a $75 annual fee, which is about average compared to most unsecured guaranteed credit cards. Keep in mind, however, that the fee increases up to $99 after the first year of use. As far as the APR, it’s 23.95%, which is also quite average.
One of the benefits the Indigo Mastercard offers is the ability to get fee-free advances during the first year. After the first year, the fee is either 5% or $5, whichever is greater. Another benefit is free roadside assistance, which isn’t so common among unsecured credit cards.
The Milestone Mastercard has a lot to offer in terms of perks. For starters, it comes with a $0 setup fee, in most cases, at least. You may be required to pay an opening fee of $50 if your credit score is really low.
The card’s annual fee is $75 the first year, which is typical for a lot of unsecured credit cards. The fee goes up to $99 after the first year, though. As far as the APR, the card has a 23.9% APR.
With the Milestone Mastercard, you get to enjoy fee-free cash advances throughout the first year of use. After that, the fee is either 5% or $5, whichever is higher.
Best Secured Credit Cards
Secured credit cards are the ones that are backed by an initial deposit that serves as collateral in the event of failure to repay your bills.
If you plan on applying for a secured credit card, you must keep in mind that most issuers require a minimum deposit amount that’s around $200. The deposit amount is usually equal to your credit limit.
Unlike unsecured credit cards, secured cards don’t require setup fees, which is one of their many benefits. They do, however, require annual fees.
Discover It is arguably the best secured credit card you can apply for today if you’re seeking guaranteed approval. It has plenty of perks that most other secured cards won’t offer you. Once you’re approved for a Discover It card, you’ll have to make an opening deposit from $200 to $2,500. That deposit will govern your credit limit.
The Discover It card comes with no annual fee whatsoever. Further, you get to enjoy periodic credit line increases. Basically, every 8 months, your account is reviewed for credit line increases. If it passes the review, your credit limit will increase automatically.
The card has a 25.25% interest rate, which is fairly high but still within the typical range where most secured credit cards dwell.
There are two perks that help the Discover It card stand out from the rest of its competitors. Firstly, users get to enjoy free FICO scores from TransUnion. Secondly, users get to enjoy cashback rewards, which basically means you can earn 2% at restaurants and gas stations and 1% at all other outlets.
Your earnings are also matched at the end of your first year of use. How cool is that?
The OpenSky Secured Visa is another excellent option for those who are willing to make an initial opening deposit. You get to enjoy a credit limit that ranges from $200 to $3,000 with this card. Your credit limit, of course, is equal to the opening deposit amount.
No credit checks are required to qualify for the OpenSky Secured Visa, which makes it an optimal choice for people with a not-so-ideal credit history. What’s more, the card comes with a 17.39% APR, which is one of the lowest interest rates on the list. Note, however, that the APR is variable.
Another thing that sets this card apart from its competitors is its comparatively low annual fee, only $35. If you have a notably low credit score, you can’t go wrong with the OpenSky Secured Visa.
Next up, we have the Secured Mastercard from Capital One, which happens to be one of the most popular secured options on the market. It’s perfect for people with bad or limited credit. Further, it comes with no annual fees whatsoever.
Users of the Capital One Secured Mastercard can expect regular reporting to the three major credit bureaus. They should also expect their card to be accepted at literally millions of locations worldwide.
The card comes with a regular APR of 26.99%, which is quite average. Note, however, that the APR is variable, meaning it may become lower or higher at some point in the future.
Once you make your minimum security deposit, you’ll gain access to a $200 initial credit line. The more money you deposit before you open your account, the higher your credit line will be.
Please bear in mind that in order to make your refundable security deposit, which typically is $49, $99, or $200, Capital One will need access to an authorized bank account.
The last guaranteed approval credit card on our list, and by no means should its placement on our list indicate that it’s inferior as far as value, is the First Progress Platinum Select Mastercard.
Boasting one of the lowest APRs on the market, at only 13.99%, the Platinum Select Mastercard is undoubtedly one the best secured credit cards you can get today.
Anyone can qualify for a Platinum Select Mastercard, regardless of credit score, as it has no minimum credit score requirements. This makes it one of the best options for people with low or poor credit scores.
What’s more, the card doesn’t require any credit history, which makes it an ideal starter card, especially for high school graduates.
As far as fees, the card has an annual fee of $39, which is pretty low compared to other options in the subprime cards market. We’d recommend this card for people with really low credit scores and for high school graduates.
Interest Rates Associated with Guaranteed Approval Cards
Guaranteed approval credit cards, like most options intended for people with bad credit, come with comparatively high interest rates to offset the lending risk. Interest rates for such cards tend to vary based on their issuer and type, but the average rate is about 25.33%.
If you plan on applying for a guaranteed approval credit card that comes with a high interest rate, we highly recommend paying most (or all, if possible) of your balance during the grace period, which spans 21 days. This will help you avoid high fees and debt.
What Is the Credit Limit for Guaranteed Approval Cards?
Credit limit tends to vary depending on the credit card’s type. Most unsecured credit cards that fall under the guaranteed approval category start out with a $300 credit limit, whereas most secured cards start out with a $200 minimum limit.
With regard to unsecured cards, note that your credit limit is influenced by your credit score. In other words, the higher your credit score, the higher your credit limit can be.
With regard to secured cards, your credit limit can be as high as you want (up to the issuer’s credit line ceiling). However, to attain the credit limit you need, you must make sure you’re able to make the deposit.
How to Rebuild Credit With a Guaranteed Approval Credit Card?
We mentioned earlier that one of the benefits of applying for a guaranteed approval credit card is that it can help you reform your credit history, but how? Simply by increasing your credit limit and improving your payment history.
It’s important for you to be aware that there’s a host of factors that influence your credit score, including your payment history, length of credit history, credit utilization, credit mix, and new credit. There are other secondary factors, but those five are the most influential.
Even though each of these factors governs a percentage of your credit score, we’re compelled to say that your credit utilization and payment history have the biggest influence on your score. If you can improve upon those two factors, your chances of improving your credit score will become greater, and a guaranteed approval credit card does exactly that.
Credit utilization is basically an indication of your available credit. Therefore, if you opt for a secured guaranteed card and are able to maximize your credit limit, your credit utilization will be lowered. If you manage to get your score utilization below the 30% mark, your credit score will increase.
With regard to improving your payment history, a guaranteed credit card can help you do so, but it’ll take quite a bit of time, especially if you have several late payments to make.
Managing to improve your payment history will show your creditors that you’re financially responsible, which will then compel them to improve your credit score.
Just because you have a low credit score doesn’t mean you can’t enjoy the perks of carrying a credit card. While most prime credit card issuers are pretty strict when it comes to their eligibility requirements, the market of subprime cards is full of issuers who are more than willing to deal with clients that have not-so-ideal credit scores.
There are quite a few excellent guaranteed approval credit cards available, but we assure you that the ones reviewed in this article are the absolute best. Just make sure that you pick the one that suits your financial situation the most.