If you’ve achieved a high credit score, choosing the best credit card for your lifestyle means browsing through dozens of options. But if you have bad credit, or not at all, your options pool is significantly smaller.
Financial Services Site WalletHub worked with a team of experts to calculate the numbers and determine which cards are leading the pack in various categories for 2018, including those aimed at people without good credit.
If the problem is simply that your credit history is limited, WalletHub recommends the Capital One Platinum Credit Card. This card has fraud protection and no annual fees. After five months of on-time monthly payments, users have access to a higher line of credit.
But if your credit history is irregular, the choice of WalletHub is the Discover the Secure Credit Card no annual fee. This card offers 2% cash back at restaurants and gas stations up to $ 1,000, plus 1% cash back on everything else. At the end of the first year, any Cash Back Rewards earned are also doubled.
The card requires a security deposit of at least $ 200 to help establish credit. The deposit will be refunded when you switch to an unsecured line of credit, provided you have handled the card with care.
Secured cards like this are a good option for newcomers or those with a low credit rating as the deposit usually matches the line of credit thus removing the risk for the issuer Greg McBride, financial analyst in chief at Bankrate.com, tells CNBC Make It. They should also help users learn how to manage credit responsibly.
Most of the time, the line of credit on these accounts is the amount you have deposited as a security deposit. However, that doesn’t mean the card works like a debit card: money isn’t automatically deducted from an account when you swipe. You still have to make monthly payments.
It is also possible to fall into the red using a secure card. “You can still accumulate debt if you make purchases and don’t pay your bills on time” Karma Credit Reports. “The amount you owe can quickly increase beyond the deposit you made, thanks to interest.”
But if you pay your entire bill every month, using a secured card will allow you to accumulate credit and eventually switch to a traditional, unsecured card.
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