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4 good cards for people with bad credit

If you have lousy credit or no credit history, a secured credit card can help you boost your credit scores.

By MSN Money Partner Jan 26, 2012 1:40PM

This post comes from Jeanine Skowronski at partner site MainStreet.


MainStreet on MSN MoneyPrepaid debit cards may be all the rage these days, but those looking to build credit are probably better off opting for a different kind of plastic.


Unlike prepaid alternatives, secured credit cards, which require customers to put down a sum of money upfront to cover the line of credit and thereby minimize the risk of default, can actually help your credit score as long as the issuer reports the information to Experian, Equifax or TransUnion.


"Unless the disclosure statements specify that they report to the major credit bureaus, I advise consumers to call the issuer and ask if they report to the big three," says Beverly Harzog, credit card expert with "It's possible that a secured card issuer will say they report, but if it's not to the big three, it doesn't help the consumer." Post continues below.

Harzog says that most secured cards backed by major banks or issuers are in the habit of furnishing the data, but smaller lenders may not, so it never hurts to double-check. To save you some time, here are a few good secured cards that can give your credit score a boost:

  • Orchard Bank Classic MasterCard. Orchard Bank remains a popular choice among credit seekers because its application process helps them figure out which of its three offerings they are likely to be approved for before they formally apply. The secured option requires a $200 minimum security deposit to ensure the credit line. It carries a low annual percentage rate of 7.99% and a $35 annual fee, which is waived for the first year.
  • Capital One Secured MasterCard. This card requires a $49, $99 or $200 refundable deposit based on your credit history. The credit line ranges between $200 and $3,000, depending on how much you put down. The annual percentage rate is 22.9%, and there is a $29 annual fee associated with the card.
  • Citi Secured MasterCard. Citi actually invests the money you use to back your credit in an 18-month certificate of deposit with a high interest rate (about 4%). The minimum deposit required is $200, but you can put up to $5,000 into the CD. The card itself has an annual percentage rate of 18.24% and a $29 annual fee. Citi also advertises that you may become eligible for an unsecured Citi Platinum Select MasterCard after 18 months of responsible usage.
  • Navy Federal Secured Card. Highly recommended by Harzog, the credit union's secured card actually has rewards attached to it. Cardholders earn one point with every $1 of net purchases, which can be redeemed for a variety of gift cards. It also has a low annual percentage rate of 8.99% and no annual fee, and the minimum deposit required to obtain the card is $500. The credit union is open to serving military members and their families.

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