Key takeaways
- Unsecured credit cards do not require a cash deposit, but are harder to qualify for. Second-chance cards and credit-building cards are your best options when you have bad credit.
- Cards with no deposit for low scores tend to have lower credit limits, higher fees, and steep interest rates.
- Use prequalification tools and compare the interest rates, fees, and benefits. Apply for the card with the most favorable terms for you.
Credit cards with no deposit can help you access credit and improve your score when you don’t have the cash for a security deposit. Not everyone has hundreds of dollars lying around that can be locked away for months.
If you have a low score and don’t want a secured card, your best bet is to get a second-chance card. These cards are designed for people with poor or no credit history. Or you can look for a credit-builder card that specifically aims to improve your score with responsible use.
Let’s explore the best credit card options with no security deposit for poor scores and tips on how to apply.
What are no deposit credit cards?
No-deposit cards are unsecured credit cards that don’t require a deposit to open an account. Traditional credit cards fall into this category. Credit cards with no security deposit give you access to a line of credit based on your creditworthiness alone. Issuers take into account your income, credit score, and existing debt to determine if you’re eligible.
Many unsecured cards require good to excellent credit, but not all. Specific credit card issuers provide credit cards for bad credit with no deposit. These cards can be a good choice if you don’t want to tie up money in a deposit or don’t have the funds available. The catch is that they come with high interest rates and additional fees to compensate for the creditor’s risk.
Secured credit cards require an upfront cash deposit as collateral. They are more readily available for people with bad credit since the refundable security deposit lessens the creditor’s risk. The deposit is the main difference between secured and unsecured credit cards.
Certain cards, like the Chime Credit Builder card, are hybrid with flexible deposit requirements and no credit check. A credit card with no credit check and no deposit required is rare.
What types of credit cards don’t require a deposit?
If you’re looking for credit cards without deposit requirements and have bad credit, there are several types to consider.
Unsecured credit cards with no deposit
The majority of credit cards are unsecured. Many offer benefits like cash back rewards, travel points, and 0% introductory APRs for purchases or balance transfers. People with good to excellent credit typically get rewards credit cards.
If your credit score falls in the poor or fair category, you should look for a basic unsecured card. Use your card responsibly – establish a positive payment history and low usage. Over time, you can improve your score and get a card with rewards.
Second chance credit cards
Lenders designed second chance credit cards with no security deposit for consumers with poor or limited credit histories. The idea is to give people who have had issues with credit in the past another opportunity.
While lenders are willing to provide credit cards for no credit with no deposit, they still want to be protected. As a result, many charge high annual percentage rates (APRs), additional fees, and set low credit limits. The extra fees mean they will still receive money even if you don’t pay your bill. The low limits ensure they won’t be out much if you default.
Credit cards for rebuilding credit with no deposit
When looking for credit cards for a 500 credit score, credit building should be a priority. Look for cards that report to all three major credit bureaus. Reporting your activity to the credit bureaus, Equifax, Experian, and TransUnion, is essential for improving your score.
The best credit cards to build credit will also offer perks like autopay and reminders, so you never miss a bill. Paying on time is the best thing you can do to get good credit.
Many providers also alert you if you spend over a certain amount. This can help you keep your utilization low and spot fraud early on. You may also find one that sends you your credit score for free once a month so you can monitor it.
Choose the card you need and apply today!
How to get credit cards for bad credit with no deposit
Check your credit profile
First, check your credit score and report. Knowing your current standing can help you identify cards you may qualify for and avoid unnecessary denials.
You can get your credit report for free once a year via annualcreditreport.com. Read it over carefully for errors that could be hurting your rating. If you see any mistakes, dispute them with the issuing bureau.
What credit score do you need for a credit card? Most providers require a score over 690. That said, there are cards for a 500 credit score or lower.
Determine your budget for fees and interest
Next, examine the fees associated with the card. Many unsecured credit cards for bad credit come with extra costs. They often have annual fees, processing fees, monthly maintenance fees, and steep APRs. Compare these fees across different cards to find the most cost-effective option.
Note that the card will likely have a late payment fee, a returned payment fee, and a foreign transaction fee. These fees are standard, no matter your score, but it’s good to be aware of them so that you can avoid them.
You can also avoid paying interest. Only buy on credit what you can afford to pay for in cash, and then you’ll be able to pay your bill in full at the end of the month. When you pay in full, you won’t pay a dime in interest, and a steep APR won’t be a problem at all.
Making the full monthly payment isn’t always possible. If that’s the case, prioritize cards with low APRs. You can also learn how to lower your interest rate on a credit card to reduce your monthly bills significantly.
New to credit and want to learn more?
Look for bad credit cards with no deposit
If you don’t want to put down a deposit, you should focus your search on unsecured credit cards for bad credit.
Some issuers advertise guaranteed credit card approval with no deposit. Be cautious of cards that sound too good to be true. Guaranteed approval credit cards with no deposit often have unfavorable terms hidden in the fine print.
Consider alternative cards. No credit check credit cards with instant approval and no deposit are often secured by money in your bank account. You can spend money in the account as you like. It is not tied up like a traditional security deposit.
Prequalify for a credit card with no deposit
Many issuers let you prequalify with only a soft credit pull to gauge your chances of approval. Prequalifying is a smart first step when looking for a credit card with bad credit. You can then compare credit card offers and formally apply for the best one.
Prequalifying does not guarantee your approval. It shows you what cards you are more likely to get, saving you from unnecessary hard inquiries.
Evaluate the different card options
Once you are prequalified for multiple offers, compare them. Select the card with the fewest fees and lowest APR available. Ensure the issuer reports to all three credit bureaus and has a decent grace period.
Your credit limit is another factor to consider. Most credit card companies will start you off with a limit between $200 and $500, up to $700 in select cases. Credit cards with a $2,000 limit guaranteed approval will be difficult to find when you have bad credit.
A higher limit will make it easier for you to spend and keep your credit utilization ratio low. A low utilization rate is essential for building credit. Opt for cards with higher limits.
When comparing cards, prioritize those offering a $500 credit card limit with no deposit and no mandatory fees. These cards can help you build up your score without putting a dent in your wallet.
Looking for a high-limit card?
Avoid applying for too many credit cards at once
Each time you apply, a hard inquiry hits your credit report. Too many inquiries in a short period can damage your score and make qualifying harder. To avoid this, apply strategically.
Only formally apply for one card at a time. Try to prequalify for that card before you submit your application.
If they deny your application, wait six months before applying again. The waiting period gives your score time to recover from the hard inquiry and show lenders that you’re not desperate for credit.
Receive your card
Credit card companies may approve your application in 60 seconds or a few weeks. They generally approve online applications faster when applicants fill them out accurately and completely. Federal guidelines require them to notify you within 30 days whether they approve or deny you.
Once approved, you should receive your card within 7 to 10 business days. If you are in a hurry, ask the issuer how long it takes to get approved for a credit card. Many issuers offer instant decisions and give you immediate access to a virtual card, but not all.
Frequently asked questions
1. What is the easiest card to get approved for?
Secured credit cards, which require a security deposit, are the easiest to be approved for. You can find unsecured cards for bad credit that have lenient criteria.
2. What credit score do I need for approval?
Some companies offer unsecured cards to individuals with scores of 500 or less. These cards often come with lower limits, higher annual fees, and higher APRs. Your chances of approval increase when your score is 600 or higher.
3. Can I get a credit card without depositing money?
You can get a card without depositing money by opting for an unsecured credit card.
4. Can you get a credit card with bad credit and no money down?
You can get a card with a bad rating and no money down by choosing an unsecured card for bad credit. Second-chance credit cards and credit builder cards often have higher interest rates and extra fees.
5. Do all credit cards require a deposit?
The majority of credit cards are unsecured and do not require a deposit. Card issuers consider your credit score, report, income, and debt obligations to determine whether or not to approve you.
Bottom line
If you need an unsecured card and have a bad score, you are not out of luck. There are plenty of card issuers who have designed cards just for you.
When applying for a credit card for bad credit, concentrate on feasible choices. Prequalify before you apply, and always read the terms before you sign. Do not accept a card whose fees you cannot afford.
Once you have your card, use it responsibly. Pay on time every time and keep your utilization rate low. Follow those two rules to improve your score and move onto a card offering higher rewards and lower fees.