Unsecured credit card with $5000 limit with bad credit

Bad credit can make life difficult. You may struggle to qualify for an unsecured credit card or end up paying sky-high interest rates on loans. Unsecured credit cards for bad credit can help you rebuild your credit score while enjoying the convenience of a credit card. And unlike secured credit cards, they don’t require a security deposit. 

Unsecured credit cards for people with subpar credit typically come with high fees, high interest rates, and little spending power. They are not always an attractive option, but sometimes they may be your only option.

To help you make the best choice, we’ve narrowed down the best unsecured credit cards for bad credit. We’ll explore their features and whether or not they’re the best option for rebuilding your credit. 

What Is an Unsecured Credit Card for Bad Credit? 

An unsecured credit card for bad credit is a regular credit card, meaning it has the same features and works the same way as any other traditional, unsecured credit card. The difference is that it’s specifically designed for people with bad credit. 

👉 Typically, a “bad” or poor credit score is anything under the 600 range. For example, Vantage considers a credit score between 500 and 600 poor, while FICO considers a score between 300 and 570 very poor.  

Most credit card issuers are reluctant to approve applicants that fall within those ranges. In this case, an unsecured credit card for bad credit may be your only option if you don’t want to pay a security deposit.

These credit cards have more lenient approval criteria, making it easier for people with damaged credit to qualify. They also tend to have high fees and high interest rates. Many have both annual and monthly fees, adding up to a hefty cost.

⚠️ If you use one of these cards, you will probably want to treat it as a temporary credit building tool. Use it only when you need to, pay your bills in full and on time every month (so you don’t have to pay interest), and move to a card with lower fees as soon as your credit allows it.

Let’s take a closer look at our top five picks and two other possibilities.

#1

Petal® 1 “No Annual Fee” Visa® Credit Card

The Petal® 1 “No Annual Fee” Visa® Credit Card is the best bad credit option if you qualify. That may not be as easy as it would be with other cards on this list. Petal evaluates your creditworthiness based on your banking history, not your credit score. If you are new to credit or rebuilding credit you’ll have a chance.  

Fees
$0 annual fee

APR
22.99% – 32.49% (variable)

Initial credit limit
$300 to $5,000

Monthly fee
$0

Apply Now

Learn more about Petal® 1 “No Annual Fee” Visa® Credit Card

#2

Indigo® Mastercard® Credit Card

The Indigo® Mastercard® Credit Card offers fast, easy prequalification and no monthly fee. The annual fee is still on the steep side and the initial credit limit is low. 

Fees
$0-$99

APR
24.9%

Initial credit limit
$300

Monthly fee
$0

Apply Now

Learn more about Indigo® Mastercard® Credit Card

#3

Surge Mastercard

The Surge Mastercard offers a higher initial credit limit than most unsecured cards for bad credit, but watch out for those fees! 

Fees
$96-$125

APR
29.99%

Initial credit limit
$300 to $1000

Monthly fee
$10/month after the first year

Apply Now

Learn more about Surge Mastercard

#4

Credit One Platinum Visa

The Credit One Bank Platinum Visa is one of the few unsecured credit cards for bad credit that offer borrowers cashback rewards. 

Fees
$75 first year, then $99

APR
26.99%

Initial credit limit
$300

Monthly fee
Annual fee is billed monthly

Apply Now

Learn more about CreditOne Platinum Visa

#5

Milestone Mastercard®

The Milestone Mastercard® is specifically designed for borrowers with a challenging credit history and is one of the more affordable cards of its kind.

Fees
$35 – $99

APR
24.90%

Initial credit limit
$300

Monthly fee
$0

Apply Now

Learn more about Milestone Mastercard

#6

Destiny Mastercard

The Destiny Mastercard’s fees are on the high side, but the card is accessible to people with bad credit and the foreign transaction fee is reasonable, making it one of the better travel options in this category.

Fees
$59 – $99

APR
24.9%

Initial credit limit
$300

Monthly fee
$0

Apply Now

Learn more about Destiny Mastercard

Petal® 1 “No Annual Fee” Visa® Credit Card

👉 Summary: The Petal® 1 “No Annual Fee” Visa® Credit Card is a clear winner in this category for those who qualify. Qualification is based on banking history, not credit score, making this a great choice for people who manage their finances well but have no credit score or a thin credit file. It is mainly for people with no credit rather than for those with severely damaged credit.

✔️ Pros:

• No annual or monthly fee
• No foreign transaction fee
• 2% to 10% cash back rewards at select merchants
• Approval based on banking history, not credit score

❌ Cons:

• Approval is not certain
• Late payment fee up to $40
• Returned payment fee of $29

Description

Unlike most credit card issuers, Petal assesses your creditworthiness primarily by analyzing your banking history, not your credit score. That makes it much easier to get approved if you have no credit history or if your credit has been damaged by a few missteps but your financial life is otherwise in good order.

This card is primarily intended for people with no credit score or people whose low credit score is caused mainly by a lack of data. If your credit record has numerous negative entries you will need to look at other options on this list.

If your banking history is filled with overdrafts and returned payments, of course, you may not qualify.

For those who do qualify, this card is clearly superior to other unsecured cards for bad credit. Fees are low: there’s no annual fee, monthly fee, or international transaction fee, so as long as you don’t make late payments or have payments returned, you won’t pay any fees at all.

You can get a credit limit increase in as little as 6 months by making qualifying on-time payments and keeping your credit score within a personalized range. There’s even 2% – 10% cash back at select merchants in your area.

If you’re looking for an unsecured card for bad credit, we’d suggest checking this one first. You can prequalify with no impact on your credit score, and if you’re accepted you’ll have the best available option. If not, there are several other options!

Indigo® Mastercard® Credit Card

👉 Summary: With no monthly maintenance fees and easy pre-qualification,the Indigo® Mastercard® Credit Card is one of the better unsecured credit cards for borrowers with bad credit. 

✔️ Pros: 

• No monthly maintenance fee
• Easy pre-qualification 

❌ Cons:  

• Unpredictable annual fee (based on creditworthiness)
• High APR 
• No rewards 

Description

Indigo® Mastercard® Credit Card can help people with challenging credit histories rebuild their credit. You can check if you pre-qualify within minutes for an initial credit limit of $300, with no impact on your credit score.

Unlike other unsecured cards for bad credit, Indigo doesn’t bury you in high monthly maintenance fees or program fees. It does have an unpredictable annual fee that can range from $0 to $75 during your first year and $99 every year after. The fee is based on your creditworthiness. If Indigo considers you a risky client, the fee will be on the higher end of the spectrum. 

Overall, it’s a fair price to pay to improve your credit, as most cards of its type have even higher fees. If you want to improve your credit without paying a fee and you don’t need an emergency loan, a secured credit card is a much better option. 

Indigo reports your activity to all three major credit bureaus. Using the card responsibly can improve your credit score and help you qualify for a better unsecured credit card in the future. As long you pay your balance in full every month to avoid paying the high APR of 24.9%, Indigo is one of the better options in this category. 

Surge Mastercard

👉 Summary: If you have less than perfect credit and need access to a higher credit limit, theSurge Mastercard may be able to help you, but it will cost. 

✔️ Pros: 

• Potential for a high initial credit limit
• Potential credit limit increase after 6 months 
• Free monthly credit score 

❌ Cons:

• Very high APR 
• High fees 
• No rewards 

Description 

Celtic Bank’s Surge Mastercard differentiates itself by offering borrowers potential access to an initial credit limit between $300 and $1000. The amount you’re approved for will depend on your creditworthiness at the time of application. 

Once you’re approved, you may be able to qualify for a limit increase in as little as 6 months. This can help you improve your credit score faster because it can lower your credit utilization ratio. Free monthly access to monitor your credit score is another perk. 

If you’re looking for an affordable way to rebuild your credit score, Surge is not the best choice. You’ll pay $125 annually during your first year ($96 after that), and $120 in monthly fees every year after. The monthly fees are waived if your credit limit is $750 or $1000. Surge also has one of the highest APRs on the market and no rewards. 

Overall, Surge is a decent short-term solution if you need access to funds. The high fees and APR mean you should focus on rebuilding your credit quickly and move on to a less expensive product.  

Credit One Bank Platinum Visa for Rebuilding Credit 

✔️ Pros: 

• Cashback rewards 
• Free Experian credit score access 

❌ Cons: 

• High yearly fee 
• High APR 
• Limited buying power 

Description

Credit One lets you rebuild your credit while earning 1% cashback rewards on eligible purchases like gas, groceries, and more. 

While cashback rewards may seem like a bonus worth the $75 to $99 annual fee, you’d need a higher limit than the initial $300 it offers if you want to make the most of your points. If earning points is important to you, this type of credit card is not the best option. There are better secured credit cards with no annual fee that offer better cashback rewards. 

Credit One regularly reviews your account to determine if you’re eligible for a limit increase and gives you free access to your Experian credit score. This will help you to rebuild your credit and eventually graduate to a better credit card. 

Milestone Mastercard®

👉 Summary: The Milestone Mastercard® is specifically designed for borrowers with a challenging credit history and is one of the more affordable cards of its kind. 

✔️ Pros:

• No monthly maintenance fees
• Bad credit is okay
• You may qualify for reasonable annual fees 

❌ Cons:

• High APR 
• High yearly fee for some applicants
• Limited buying power 

Description

This card comes in three levels, each with its different fees:

• Gold 300: $35 annual fee
• Gold 301: $75 for the first year; $99 after that
• Gold 322: $59 annual fee

The level you are offered will depend on your creditworthiness. If you qualify for the Gold 300 or Gold 322 levels, this is one of the more affordable unsecured cards for bad credit.

The card’s initial credit limit is a standard $300, which is further reduced once you subtract the annual fee. This limits your buying power, especially if your goal is improving your credit score and keeping your credit utilization low. If you’d like more spending room, you may wish to look for a different card.  

After the first year of using the card, the yearly fee can be as high as $99, so it’s best to focus on building up your credit score and switching to a card with lower fees. Despite its annual fee and high APR of 24.9% (which you won’t have to pay if you make every payment on time and in full), it can still be one of the more affordable unsecured credit cards for bad credit on the market. 

*Dependent on credit worthiness

Destiny Mastercard 

👉 Summary: TheDestiny Mastercard is available to people with bad credit. Fees are on the high side, but the card is accessible and the foreign transaction fee is reasonable, making it one of the better travel options in this category.

✔️ Pros:

• Borrowers with bad credit can get approved
• Low foreign transaction fee

❌ Cons: 

• High APR
• Unpredictable annual fee 
• No rewards 

Description

Destiny Mastercard is one of the more affordable ways to repair your credit score. The annual fee you prequalify for is between $59 and $99, and it’s determined by your credit profile. Like most credit cards of its kind, it has a very high APR (24.9%), so carrying a balance from one month to the next can end up costing you. 

The best way to take advantage of this card or any other unsecured credit card for bad credit is to pay off your balance each month and keep your credit utilization low.  

While it doesn’t have any rewards, it gives borrowers with bad credit a chance to improve their credit history. Like most cards on this list, the initial credit limit starts at $300, which doesn’t give you much buying power. 

Unsecured Credit Cards for Bad Credit vs Secured Credit Cards

Unsecured credit cards for bad credit and secured cards can both help you build a positive credit history. If you pay your bills on time and keep your credit utilization low you will improve your credit.

But which is better for rebuilding credit? 

Secured credit cards are usually a better alternative. The best secured credit cards have no annual fee, offer good cash back rewards, and have a lower APR than most unsecured credit cards for bad credit. 

The only difference between secured and unsecured credit cards is the security deposit. Secured credit cards require you to use your own money to put down a refundable security deposit which will act as your new credit limit. 

Your security deposit is fully refundable, so you’ll get your money back when you close your account. Many secured cards will convert your card to an unsecured card if you establish a good payment history. 

If you can’t or don’t want to put down your own money as a deposit, unsecured credit cards for bad credit are your next best alternative. They don’t require a security deposit and give you emergency access to credit. 

Because lenders take on more risk by extending credit to someone with a spotty credit history, unsecured credit cards for bad credit have many disadvantages. They have high APRs, high fees, and little spending power. Many of them also have setup fees and other monthly maintenance costs. 

⚠️ If you keep an unsecured card for bad credit for more than a year or two you will spend more on fees than you would for a deposit on a secured card, and you won’t get that money back.

The unsecured credit cards we’ve selected are better than most unsecured credit cards for bad credit. That being said, secured credit cards are a better way to improve your credit score. 

☝️ If you do use an unsecured card for bad credit you will usually want to replace it with a card that has lower fees as soon as your credit score allows it.

How We Chose the Best Secured Credit Cards for Bad Credit 

We selected the unsecured credit cards on our list based on their cost, features, and overall reputation. Here are the most important factors that set these cards apart from the rest: 

Cost

The biggest disadvantage of unsecured credit cards for bad credit is that they can be very expensive. Many of them come with high annual or monthly fees, costly setup fees, and high-interest rates. 

We’ve handpicked the few unsecured credit cards that have relatively low fees compared to the rest. These cards also have no hidden setup fees or maintenance fees. 

Credit Bureau Reporting 

The main purpose of unsecured credit cards for bad credit is to improve your credit score. That’s why we’ve made sure every credit card on this list reports to all three major credit bureaus. 

Some of them also give you free access to your credit report or credit score, which makes it easy to keep track of your progress. With responsible use, you can work your way up to a better credit card and give your credit score a boost.

Eligibility 

Qualifying for an unsecured credit card is difficult when you’ve got a less than fair credit score. Each card we’ve selected is designed specifically for borrowers with bad credit or challenging credit history. 

Bottom Line 

Unsecured credit cards for bad credit can help you repair a history of bad credit while you enjoy the perks of a credit card.  

While they don’t require a security deposit, that doesn’t mean they’re better than secured credit cards. They’re expensive, have limited spending power, and most have no rewards. It’s often better to use a secured credit card with no annual fee to repair your credit and gain access to the advantages of a credit card.