Protecting Your Privacy: We will never call or email you asking for money. There is no fee to apply. Close

Guide to Bad Credit Credit Cards With Guaranteed Approval

Advertiser Disclosure

So your FICO credit report just came in and it's lower than expected.

Maybe you missed a payment. Used too high a percentage of your credit utilization. Were forced to max out a card or two to pay for an emergency.

Whatever the reason, bad credit can impose harsh limits on you and your family's lifestyle for years to come.

In fact, two in five Americans are unaware bad credit can hike their insurance costs, while one in two Americans are unaware it can limit their cell phone provider options.

The experts will tell you to prioritize building back your credit. And while they're absolutely right, your reality might be a bit more complicated.

Perhaps you have a mortgage you were subsidizing with a card no longer available to you. Or perhaps school is starting up soon and you need a new credit line to afford all your kids' school supplies upfront until your paycheck comes in at the end of the month.

Don't fret. While the average 2016 FICO credit score was 699 (prime!), about a third of people had credit scores below 620 (subprime). And according to a Federal Reserve financial well-being survey, over a third of people who applied for a credit card in 2015 were either outright denied or offered less credit than they requested.

This might seem disheartening, but the silver lining is that you're not alone.

To credit card companies and credit card issuers, even though you look like a riskier bet, you and the millions of Americans with bad credit are potential business. That means you have options.

The odds of winning the Publishers Clearing House Sweepstakes are 1 in 505 million

If you need a credit line fast or are having trouble gaining approval from an issuer, one such option to consider is what's called a guaranteed approval card.

Below we've put together a comprehensive guide on the topic and even suggested a few cards to consider.

How Guaranteed Approval Credit Cards Work

How guaranteed approval credit cards work

Let's get this out of the way up front: the guaranteed approval credit card is a marketing misnomer. No credit card is guaranteed.

All cards demand some type of application that requires you disclose certain information, ranging from income, credit score, social security number, address, etc.

The difference is that guaranteed approval cards have minimal requirements from credit card companies and don't require a "hard pull" credit check, which will ding your credit score. Typically, you'll apply online, the card company will do a "soft pull", which doesn't hurt your score, and you'll find out whether you're approved in minutes.

You might be thinking this all sounds too good to be true. You would partially be right.

To mitigate its risk or (depending on how you look at it) take advantage of desperate or unsuspecting consumers, credit card companies often build in hidden fees, high-interest rates, low credit limits, or other stringent limitations that make these cards riskier to you, the consumer (more on this later).

That being said, there are cards out there that might still be worth your while. The trick is understanding what to look for and expect.

The Ins and Outs

The ins and outs of guaranteed approval credit cards

There is no official type of credit card called a "guaranteed approval card." Instead, there are three broad card categories — unsecured, secured, and debit — from which specific cards are considered and marketed based on their features as guaranteed approvals.

Unsecured and secured cards are pretty much credit line loans while the debit cards are a plastic avenue to your own bank account.

Unsecured credit cards

Unsecured credit cards

If you have bad credit, these cards are off the bat not guaranteed.

While you may, in the end, be approved, because an unsecured card is basically an unprotected line of credit, card issuers require a more rigorous application process, likely including a "hard pull" from the credit bureaus. Therefore these unsecured credit cards are no shoe-in for people trying to rebuild their credit.

The odds on Powerball or Mega Millions jackpot remain about 1 in 175 million.

Still, if you're set on an unsecured card, your best bet is with a dedicated store card. These cards have low requirements and will help you rebuild your credit. The big drawback is that you can only swipe them at the specific store they're connected to.

Secured cards

Secured cards

On the other hand, secured cards are backed by collateral like a cash deposit and can be used everywhere pretty much.

For the card issuer, the security functions to reduce risk so if you end up not paying your bill it has a "safety deposit" it can draw to recompense itself.

For you, the consumer, whatever security you're able to put down typically will equal the credit line you're given; so if you put down $400, your monthly credit line will be $400. Minimum deposits can be as low as $100, but $200 is more standard.

Customer Review 1

For this reason, secured credit cards are geared toward people with bad or no credit more so than unsecured credit cards. As long as you can put down the minimum security deposit, most of these cards will be guaranteed approvals, according to Liz Roberts at newhorizon.org.

The trick is to "Look for cards that don't do a credit check. And make sure they report to at least one credit bureau," Roberts says.

Customer Review 2

"You also want a card…that will let you add additional funds at a later time to your security deposit."

Debit cards

Debit cards

Prepaid cards must be attached to an established checking account. So by default, these are technically guaranteed because there's very little risk to the issuer. Whatever you spend is directly deducted from your bank account. There's no loan per say nor credit limit

While such a card is helpful as an easy entry point into our digital economy, the problem is that it's not a credit card and therefore doesn't impact your credit score.

If your goal is to rebuild your credit (as it should be), a debit card won't be of much help.

Five Cards to Consider

Five guaranteed approval credit cards for bad credit to consider

While debit cards are technically guaranteed approval, because building back your credit score is so important, the cards recommended below are all secured cards catering people with bad credit.

We want to emphasize that these cards are not "guaranteed approvals" literally, but rather carry minimum application risk and a high likelihood of approval.

Discover IT (Secured Card)

Discover it (secured card)

Annual fee. None

Deposit range (min-max). $200-500

APR. 23.99% (variable)

  • Card Perks Icon

    Perks

  • Earn 2% cash back on food and gas up to $1,000 in combined purchases each quarter.
  • Earn 1% cash back on all your other purchases.
  • Earn $1 cash back for every dollar you spend in your first year, automatically.

Some contests have a special guarantee

  • Card Drawbacks icon

    Drawbacks

  • Pay a max late fee of $37.
  • The credit range is potentially limited if you're making more money than your credit lets on.

What experts say

Most syndicated review sites highly recommend the Discover it secured card.

Customer Review 3

J.R. Duren writing for highya.com says there are few if any cards as good for people with bad credit:

"First, Discover's cash rewards and first-year matching can help you earn anywhere from $80 to $160 in your first year. Second, the card's absence of an annual fee is an anomaly in the world of secured credit cards."

What consumers say

The card receives respectable marks by consumers. denised_10 raved on Wallethub.com about how easy it was to increase his credit line.

Customer Review 4

"I laid down the minimum deposit of $200 and understood that after 12 months of on time payments, my account would be considered for an upgrade to unsecured. After two months, I called Discover customer service and added $100 bucks to increase my deposit/credit line to $300…"

How to apply. Head over to the Discover it website to apply and learn more.

Open Sky Visa (secured card)

Open Sky Visa (secured card)

Annual fee. $35

Deposit range (min-max). $200-3,000

APR. 18.39% (variable)

  • Card Perks Icon

    Perks

  • Build credit fast with monthly reporting to all three major bureaus.
  • Apply increase your credit line up to $5,000.
  • Card Drawbacks icon

    Drawbacks

  • Pay a max late fee of $27.
  • Pay an annual fee, despite it being small.

What experts say

Matthew Frankel at The Motley Fool says that if you're thinking about eventually applying for an unsecured card, the Open Sky Visa's issuing bank, Capital One, currently doesn't offer one. That means you would have to either stick with the secured card or change banks down the road.

Customer Review 5

"If you have a secured card from one of the larger banks mentioned above, it may be possible to eventually move to an unsecured card without having to reapply at another institution.

What consumers say

Consumer reviews were a mixed bag. Susan K. over at sitejabber.com offered an ode to how the card gave her a financial future.

Customer Review 6

"I can't believe all the negative reviews so i had to jump on and put my piece in as someone who has only benefited from getting this card. This card is not meant for big spending, a ton of usage, partial payments bla bla bla this is meant for ppl who are trying to build or rebuild a credit history and /or repair past mistakes."

How to apply. Head over to the OpenSky website to apply (in 10 minutes they claim) and learn more.

A museum in Times Square showcases 128,900 oddly shaped cheese puffs.

Wells Fargo Visa (Secured Card)

Wells Fargo Visa (secured card)

Annual fee. $25

Deposit range (min-max). $300-10,000

APR. 19.24% (variable)

  • Card Perks Icon

    Perks

  • Access a large credit line if you have the funds for a big deposit.
  • Card Drawbacks icon

    Drawbacks

  • Pay a max late fee of $37.
  • You must pay at least the minimum monthly payment.

What experts say

Beverly Harzog on her personal finance blog says that for an easy ask, the card offers comforting cell phone protection.

Customer Review 7

"You get a unique benefit if you pay your cell phone bill with your Wells Fargo Secured Card. You get protection for up to $600 on a cell phone against covered damage or theft."

What consumers say

Customer Review 8

A number of consumers, including James Everette on beverlyharzog.com, warned that even with a healthy deposit, you might be denied this card if you have bad credit:

"I have tried to get a secure credit card for 2 years from wells. I have very bad credit. I am currently in bankruptcy. They said I did not qualify for a secure credit card. I have been a customer with them since 1977. So a secure credit card is supposed to be available to help people improve their credit. I guess Wells Fargo just wants me to keep having bad credit!"

How to apply. Head over to the Wells Fargo website to apply and learn more.

People chase wheels of cheese down a 200-yard hill in England.

Primor Visa Gold Card (Secured Card)

primor Visa Gold Card (secured card)

Annual fee. $49

Deposit range (min-max). $200-5,000

APR. 9.99%

  • Card Perks Icon

    Perks

  • The lower than average APR is also fixed.
  • No minimum credit score requirements.
  • Card Drawbacks icon

    Drawbacks

  • Pay a max late fee of $29.
  • There are no rewards with this card.

What experts say

Customer Review 9

Shannon Insler, writing for Student Loan Hero, recommends the primor Gold for its low purchase APR, lack of application fee, and easy of approval. "The Primor Secured Visa Gold Card is a secured card that can be used to help you establish credit for the first time – or improve spotty credit."

What consumers say

Elle and many other consumers, writing on Beverly Harzogs finance blog, complained about inconsistencies and poor communication when they applied.

Customer Review 10

"Can you provide the contact number? I applied for the standard card on August 7, provided debit info for a $500 line and received the unable to make a decision at this time message. I didn't receive an email or any additional info and assumed it was denied. Today on the 10th the $500 was debited from my checking account. I would like to find out the status and when they will send the card or release my funds."

How to apply. Head over to primor website to apply for free for the Gold card or learn about other offers.

Weird prizes for some contests

Capital One Secured Mastercard

Capital One Secured Mastercard

Annual fee. $0

Deposit range (min-max). $49-200

APR. 24.99%

  • Card Perks Icon

    Perks

  • You are guaranteed an initial $200 credit line after making a security deposit of $49, $99, or $200, depending on your credit.
  • If you can't afford to put down the whole deposit upfront, you can pay it in multiple installments before activating your card.
  • Grow your credit limit if you make your first five payments on time.
  • Card Drawbacks icon

    Drawbacks

  • Pay a max late fee of $35.
  • Even if you can make the deposit, without a checking or savings account you likely won't be approved.

What experts say

Beverly Harzog, writing for her personal finance blog, highlights the higher than normal APR of this secured Mastercard as a potential pitfall depending on how you use it.

Customer Review 11

"The Capital One Secured MasterCard isn't the best card out there when it comes to the APR, but it's an excellent secured credit card if you don't carry a balance. And Capital One doesn't charge foreign transaction fees on any of its cards, so if you're in a situation where you have bad (or very limited) credit and you need to travel overseas, this card can save you money."

What consumers say

Customer Review 12

Sandy11, from Seattle, WA, wrote about a good customer service experience she had:

"Every time I call, I am wonderfully served and helped. My only problem is that when I go online, my password never works and I have to find a new one, and that is annoying!

How to apply. Head over to the Capital One website to apply.

Nothing in life is guaranteed but death and taxes.

Application Process

The application and approval timeline

The application process for these three cards varies. For the Discover it and Open Sky cards, there's no required "hard pull" credit check, while the Wells Fargo requires such a credit-dinging check.

For the Discover it, it's worth noting that your security deposit is required when you submit the application, but that you'll get it back right away if you're not approved.

More likely though, when you're approved, it will take 3-5 business days in the mail for the card to arrive.

For the Open Sky Visa, a number of people complained that process from application submission to card reception took several weeks. Plus, there's a lengthy hold on your deposit before the funds are back available.

If you want to learn more about the various types of credit cards and how best to (re)build your credit, then you'll love these articles:

Have you had an experience with a guaranteed approval credit card - good or bad? Let us know in the comments below.


Leave a Comment

Advertiser Disclosure:
The credit card offers that appear on this site are from credit card issuers from which CreditLoan.com receives compensation. This compensation may impact how and where products appear on this site, including the order in which they may appear within listing categories. CreditLoan.com does not include all credit card offers that might be available to consumers in the marketplace.