In the recent past, there has been an increase in financial literacy and people are becoming more aware of different offers in the market. The banks and other financial institutions are at the forefront of ensuring they offer their customers the best deals so as to retain and attract new members. It is now possible, to get second chance credit card without any security deposit. Banks are also offering online services. As a matter of fact, there are banks that operate exclusively online. However, financial institutions are still strict on credit payments. If you are constantly late to make credit payments, your credit score will negatively be affected.
A poor or fair credit score makes it difficult for you to get some important facilities like a loaner a credit card.
But, there is hope even if you do not have a stellar credit history. It is possible to get a second chance credit card with no security deposit.
Read on to know more about this.
Types of Second Chance Credit Cards
It is a financial fact that having a poor credit score makes it very difficult to get financial services like credit. A bad credit score also makes it very difficult for you to qualify for a credit card. Luckily for you, there is a chance of redeeming yourself by applying for a second chance credit card.
There are two main types of second chance credit cards:
With a secured card, it is a requirement for you to deposit a certain amount of cash with the credit card company before they can process your card. On average, most companies that issue a secured credit card charge a deposit of $250. However, if your credit history is too bad or you have a very low credit score, some companies might require collateral in addition to the deposit.
The second option and which has better conditions is the unsecured credit card. The reason it is known as unsecured is that you do not need to deposit any money with the issuing company. It is important though to note that although the companies which issue the unsecured credit cards, some charges do apply.
When going for an unsecured credit card it is important to look for companies that will not damage your credit score when you perform a prequalification check.
Understanding The Second Chance Credit Card
A second chance credit card with no security deposit is a credit card that you can apply for even if you have bad credit. The no deposit credit card is also known as an unsecured credit card since you do not deposit any cash as collateral for the card. Nobody would want to have a bad credit score, unfortunately, life does not always go as planned and you might find yourself in a situation where your credit score is less than impressive.
At times, the poor credit score might be caused by unpaid overdrafts, missed loan payments, or overdue credit repayments. It does not matter the cause of the negative credit score- the good news is that it is possible to rebuild the score again using a second chance credit card.
Using The Second Chance Card To Rebuild Your Credit History
When you get the second chance credit card, it is possible to rebuild your credit history. In order to achieve this, it is important to make consistent and timely payments. There are mainly two types of second chance credit cards. The first type is whereby you need a deposit to secure the card. The second type as earlier stated is whereby you do not need any deposit to secure the card.
Second chance credit card lenders understand that the person applying for the card is in a tight financial situation. Therefore, their requirements are not as strict as those of the normal credit card lenders. Therefore, if you want to rebuild your credit history, you should apply for a second chance credit card with no security deposit.
Factor To Consider While Choosing a No Security Deposit Second Chance Credit Card
Just like with any other item that you buy, it is important to put into consideration a number of factors before you choose a second chance credit card. It is important to note that the cards are aimed at people who do not have a stellar credit history. Therefore, second chance credit cards can end up becoming an expensive affair especially due to the fees charged. Below are the factors that you should consider while getting a second chance credit card.
- Annual fees : Second chance credit cards do charge an annual fee. The fee is non-refundable and you are simply charged for having the card. Some credit card companies do charge a higher fee than others. It is therefore important to find out the annual fee that the company which you intend to get your second chance credit card from charges.
- High APR : The annual interest rates for the second chance credit cards are usually higher than that of the normal credit cards. The higher a credit’s card APR, the higher you will be charged as a late payment fee. You should, therefore, make sure that you pay your monthly balance on time to avoid the late payment fees, which can significantly increase the total cost of the credit card.
- Extra Fees : Second chance credit cards might have extra fees. It is therefore important to read the fine print to make sure that you understand all extra fees that are applicable. Some second chance credit card with no security deposit companies charge extra fees while others are not as much. It is therefore prudent to make a comparison among different companies to find out which one charges reasonable fees.
- Credit Reporting : Another very important factor that you should consider while choosing a second chance credit company is credit reporting. Since you are rebuilding your credit history, it is important to choose a company that does credit reporting at least one of the major credit bureaus. When you get a second chance credit card and you make timely and consistent payments, then your credit score continuously improves.
Top 7 Second Chance Credit Card With No Security Deposit
1. Capital One Quicksilver One Cash Rewards Credit Card
One of the best second chance credit card with no security deposit is The Capital One Credit Card Company. It is possible to qualify for the card even if you missed a loan payment in the past five years. However, with the card, it gets a bit tricky to qualify if your credit score is very bad and you have more financial mishaps.
One of the best features of the card though is that it has a reward system. The reward system works like this- for every $1 worth of purchase you make, you receive 1.5% of your cashback. With the reward system, you can get rewards as you rebuild your credit which is a double win situation.
Another good thing with the card is that after paying the first five installments well, the company reviews your credit history upwards. You should note, however, that the card charges an annual fee of $29. But should you spend a minimum of $2,600 per year, the company waives the fee.
The company does not charge you any foreign transaction fees. The lack of the fee means that the card is super if you intend to travel abroad. It is possible to create a virtual credit card number to protect the actual card number. The ability to create a virtual credit card number protects you from risks such as having your card number hacked.
It is however important to note that you incur a late payment fee of up to $39 if you make a late payment. To avoid this hefty penalty, it is prudent to make prompt payments.
2. IndigoPlatinum MasterCard
The second card on our in-depth review is the Indigo Platinum MasterCard. The best feature of this card is that it possible for you to qualify even if you have major cases of bad credit. It is possible to qualify for the card even if you have filed for bankruptcy before.
To test the waters if you will qualify for the card, it is advisable to first try a prequalification. The purpose of the prequalification application is to give you an idea of whether you can qualify for an Indigo MasterCard.
The annual interest rate of the card is 24.9% which makes it a less expensive option than other cards. To rebuild your credit history, it is paramount to make timely monthly payments. If you fail to make timely payments, you risk damaging your credit score further. Additionally, you might end up paying $40 which the company charges as a late payment fee.
3. Fingerhut Credit Account
The third option when it comes to getting a second chance credit card with no security deposit is the Fingerhut Credit Account. One of the best characteristics of the company is it’s a very easy and straight forward application process. It is possible to get your application status in a matter of seconds upon submitting your application. Another benefit of the company is that it reports all credit payments to the major credit bureaus. This means that when you make your monthly payments on time, your credit score improves and you continue to rebuild your credit history.
With the card, it is possible to make purchases both online and offline from major stores since the card is widely accepted.
The company charges an Annual Percentage Rate for Purchases of 34.99%. The rate is similar to cash advances. The initial credit limit of the card is $300 but this limit increases when you make timely payments over some time. You get to pay a one-time program fee of $95 and an annual fee of $75 for the first year and $48 for the subsequent years. If you are late at making a payment, you will be charged a late payment fee of $40.
4. Total Visa Card
One of the greatest characteristics of the Total Visa Card is that it has a very simple and easy application process. Additionally, it is a legitimate card that is accepted by many online and offline stores. The wide acceptance of the card makes it very convenient as far as shopping is concerned. Another advantage of the card is that it has very affordable monthly payments. When you apply for the card, you get an initial credit limit of $300. However, the company raises the credit limit if you make constant monthly payments and on time. Note though that in order to qualify for the credit card, you need to have a checking account.
Fees : The company charges an Annual Percentage Rate of 34.99%. Additionally, there is an account activation fee of $89 which you pay once. You will get to pay an annual fee of $75 the first year but the fee drops significantly to $48 per year for the subsequent years. The company does not charge any monthly servicing fee for the first year. However, you get to pay $75per year, which translates to $6.25 per month, as a servicing fee after the first introductory year. The company charges a late payment fee of up to $40.
5. Surge MasterCard
One of the greatest advantages of Surge MasterCard is that it is possible to qualify for a credit card even if you do not have a perfect credit score. The terms of the company are lenient as compared to other companies that offer a credit card for bad credit with no security deposit. With Surge MasterCard, it is advisable to sign up for e-statements. When you sign up for the e-statements, it is possible to gain access to your Vantage 3.0 score which is available at TransUnion. The main purpose of a second chance credit card is to help you repair your credit score. With Surge MasterCard, it is quite possible to do so since the company reports all its credit payments to the three major credit bureaus.
Therefore your credit score improves tremendously when you make your payments on time. It is also possible to find out if you are prequalified to relieve the credit card. The best part is that the prequalification does not affect your credit score.
The company has a very fast and easy application process and it only takes a few seconds to know the status of your application. You are able to access your account online at any time of the night or day. However, to qualify for the credit card, you need to have a checking account.
With the card, you can get a credit limit of $300 to $1000. The annual fee ranges from $75 to $99. When it comes to the APR, the card charges from 24.99% to 29.9%. It is possible for the company to increase your credit limit significantly provide you make the first six months payment in a timely manner.
6. Milestone MasterCard
One of the distinguishing factors with this card possible to get a card with a design that you specifically choose. This means that you can have the card designed in any way in which you fancy. Another great feature is that you can also check if you qualify for a card. The best part is that the prequalification will not affect your credit score.
The company is also quite lenient on the qualifications and so you should take advantage if you have a less than perfect credit score. Another great feature with Milestone MasterCard is that it is possible to access your account every minute regardless of the time. The company has optimized the online app such that it is quite easy to access your account even on your mobile phone. The application works well with both android and iOS operating systems.
To qualify for the card, you must be at least18 years old. You should also have a varied Social Security Number, provide a physical address and lastly, you should have a US IP address. It is also extremely easy to prequalify for a Milestone card by filling the prequalification form. Once you fill the form. It only takes a few minutes for the results to come back. To enhance security, the credit card has a chip whereby it makes it very difficult to forge your card.
FAQ – Frequently Asked Questions
Is it possible to carry on a credit card balance to the other month?
Yes, it is possible to carry out a credit card balance to the following month but it is not advisable. The purpose of a second chance credit card is to give you a second chance. To avoid damaging your credit score further, it is necessary to pay your monthly installments on time every month.
There are many advantages to making prompt payments. When you make your payments on time, you avoid the late payment fees that credit card companies charge. Another advantage of making prompt payments is that there is a possibility that the company will increase your credit limit. Most second chance credit companies start with a credit limit of $300. However, once you make timely payments every month, then the companies can raise your credit limit to $1000. Thirdly, credit companies report their customers’ credit payments to major credit bureaus. As you make prompt payments, you are continuously fixing your credit history and improving your credit score.
How do you make sure that you do not miss a second chance credit card payment?
Once you receive the second chance credit payment, it’s important to avoid the mistakes that you did the first time around. To make sure that you do not miss a payment date, mark the date on your calendar or save it as a reminder on your phone or computer.
Another great way of making sure that you do not miss a payment is by setting the credit card payment as an auto-pay from your checking account.
Is it possible to rebuild your credit history using a second chance credit card?
It is quite possible to rebuild your credit history using a credit card. It is very difficult to get other forms of credit especially if you have a checkered credit history. Using a second chance credit card is one of the best and easiest ways of rebuilding your credit history. Make sure that you make payments on time to avoid damaging your credit score even further.
Is it possible to get second chance credit card without a security deposit?
Although the task might seem to be daunting, it is possible to find second chance credit card without a security deposit. Although most companies offer secured credit cards, there are quite a few that will give an unsecured credit card. However, it is important to find out the terms of each company.
Second chance credit card with no security deposit is a life saver. It is possible for a person who has checkered credit history to get a credit card. A second chance credit card is rightly named as it gives you the opportunity to rebuild your credit history. Therefore, it is important to make sure that you make your payments in a timely manner. If you are constantly late at making payments, or you fail to make the payments altogether, your credit score will be so bad that it could be impossible to access credit from any financial institution.