Your credit score is a crucial factor that banks and other lenders consider before they lend you any money. Banks want to know you’re financially responsible and capable of repaying your debts before they hand you any funds. Thus, looming debt can be destructive to your credit score, affecting your ability to get approval on a mortgage, student loan, or financing for a car.
So, if you’ve found yourself in a financial predicament, your best bet would be to pay off as much debt as possible, apply for new credit, and use it responsibly. But if you’re not able to qualify for a credit card because of the current state of your credit score, consider getting a secured credit card or a card specifically designed for rebuilding credit.
With these types of card, you may be required to put down a deposit before you get approved. For example, if you want a $500 credit limit, you would need to provide a $500 deposit. After you’ve rebuilt your credit score with a secured card, you should be able to get your deposit back and qualify for a regular credit card. You may also get access to no annual fees or a low-interest rate.
But ultimately, the idea is to have a low limit so you’re not tempted to spend outside of your means, and with continued responsible use, your credit score will rise.
There are many credit cards on the market made for improving your credit, but there are a few options that will save you the most on interest and fees. To make the decision-making process easier, RATESDOTCA has a handy-dandy card comparison tool.
We also used our Best of Finance methodology here to rank the cards that give you the most flexibility in your journey to repairing your credit score. So, without further ado, here are the top three credit cards for rebuilding your credit.
2019 Best of Finance Best Credit Cards for Building Credit Category Winner
Home Trust Secured Visa Card
Why it’s an awesome card
As its name implies, the Home Trust Secured Visa Card is a secured card, so it does require a minimum deposit of $500 before you can use it, forcing you to spend within your means. This card provides an excellent opportunity to establish your credit rating, though there is a cost to rebuilding your score. The annual fee is $59, but you can choose to pay it in monthly instalments of $5. No credit check is required upon application, so virtually everyone is approved. And like a regular credit card, you can use this card wherever Visa is accepted, online or in-store.
Minimum deposit
- $500
Maximum deposit
- $10,000
Annual fee
- $59
Interest rate
- 90%
2019 Best of Finance Best Credit Cards for Building Credit Runners Up
Capital One® Guaranteed (& Guaranteed Secured) MasterCard®
Why it’s an awesome card
This card comes in both secured and unsecured options and offers guaranteed approval – no prior credit history or good credit required. If you do choose to go with the secured variation, there is a minimum deposit requirement of $300. There is also an annual fee if $59, but once that is paid, you can focus on building your credit wisely. You’re also able to use the card wherever Mastercard is excepted, even though it is a specialized card.
Minimum deposit
- $300
Maximum deposit
- $7,000
Annual fee
- $59
Interest rate
- 80%
National Bank MC1™ Mastercard®
Why it’s an awesome card
This is not a secured card, however, with the National Bank MC1™ Mastercard®, you can still set a reasonable credit limit, starting at $500. This means you don’t need to put down a deposit in order to use the card, and there’s also no annual fee. Flexibility is key with this card. There’s nothing standing in the way of rebuilding your credit with this card, which is why it won the Best Card for Building Credit award at our Best of Finance Awards this year.
Minimum deposit
- N/A
Maximum deposit
- N/A
Annual fee
- $0
Interest rate
- 80%
