2017 RANKING & REVIEWS
TOP RANKING BEST CREDIT CARDS FOR REBUILDING CREDIT
Finding the Best Credit Card to Rebuild Credit
Using credit cards to help rebuild credit can be challenging. Many companies have high qualification standards, and getting back in the game after your credit score has been damaged can present some unique issues. But there is no reason to worry; there are still many credit cards to choose from that can help you repair your score.
Award Emblem: Top 6 Best Credit Cards to Rebuild Credit
The key to finding the right card for your finances is to research as many as possible and weigh the drawbacks and advantages of each. There are a few things that are important to consider, such as:
- What Annual Percentage Rate does each card offer?
- Does the bank or company offer cash back or rewards?
- Are there annual fees associated with this card?
- Will I be able to use and security features for my account?
AdvisoryHQ’s List of the Top 6 Best Credit Cards to Rebuild Credit
List is sorted alphabetically (click any of the credit card names below to go directly to the detailed review section for that credit card):
- BankAmericard® Secured Credit Card
- Citi® Secured MasterCard®
- Discover it® Secured Credit Card
- Sun Trust Secured Credit Card with Cash Rewards
- U.S. Bank Secured Visa® Card
- Wells Fargo Secured Credit Card
Top 6 Best Credit Cards to Rebuild Credit | Brief Comparison & Ranking
Credit Card Names
BankAmericard® Secured Credit Card
Citi® Secured MasterCard®
Discover it® Secured Credit Card
2%: restaurants/gas stations
1%: all other purchases
Sun Trust Secured Credit Card with Cash Rewards
1%: unlimited qualifying purchases.
U.S. Bank Secured Visa® Card
Wells Fargo Secured Credit Card
Table: Top 6 Best Credit Cards to Rebuild Credit | Above list is sorted alphabetically
How to Use Credit Cards to Rebuild Your Credit
In order to use credit cards to rebuild credit, it is important to understand how a credit card can affect a credit score. Many industries use credit scores as a way to judge or predict how reliable a customer will be in making payments toward bills and loans. A person’s credit score is usually calculated based, among other things, on their past debt, payment history, and the length of their credit activity.
Using credit cards to rebuild credit requires that cardholders make their payments on time for every single billing cycle. Missing a payment, or even making a late payment, can negatively impact a person’s credit score. Failure to make payments responsibly can make credit rebuilding credit cards ineffective.
It is also important for cardholders to repay more than just the minimum balance each month. Even while using credit cards to rebuild credit, when the balance is not paid off, it will build up interest and end up being much more expensive than necessary. Cardholders must consider their spending power, and resist charging more than they can afford to pay back, if they want to use credit cards to help rebuild credit.
What is APR?
To find the best credit cards to rebuild credit, it is important to consider how much interest will be charged to the unpaid balance. APR, or Annual Percentage Rates, represent the total amount of interest that will be charged to a customer on an annual basis. The best credit cards for rebuilding credit, will generally have lower APRs because a lower APR will result in a lower monthly payment on credit charges.
Secured Credit Cards to Help Rebuild Credit
In the event that you need to rebuild your credit, it can be difficult to know where to start. Many people may not think of using credit cards to help rebuild credit because most credit cards will not approve applicants with little or no credit. A good way to avoid these approval requirements is to use secured credit cards for rebuilding credit.
Secured credit cards can be good credit rebuilding cards because they require applicants to submit a security deposit in order to be approved. This security deposit will be equal to the approved credit limit and will be held by the bank or company for a predetermined period of time in a holding account. The security deposit can only be used in the event that a cardholder defaults on their credit card payment.
Using a secured credit card to rebuild credit is a good strategy because these cards generally have lower approval requirements. A security deposit is designed to protect both the cardholder and card provider form default. This means that banks and companies have a low risk of loss with these cards, which is why they can afford to be more lenient.
Options with No Security Deposit
Some people might prefer to use credit cards to rebuild credit with no security deposit requirements. This is definitely an available option, but it does come with some disadvantages. Using a credit card to rebuild credit with no security deposit mostly leaves two options: a prepaid credit card or a credit card with very low requirements and no required deposit.
Image Source: Pixabay
A prepaid credit card is a good option but does require that cardholders preload money onto their card. If a customer does not want to pay for a security deposit because they lack the funds, this will not be a good option because it does require up-front money. Using a regular credit card to rebuild credit with no security deposit is possible. However, cards like this often charge much larger annual fees and have higher APRs.
AdvisoryHQ’s Selection Methodology
What methodology does AdvisoryHQ use in selecting and finalizing the credit cards, financial products, firms, services, and products that are ranked on its various top-rated lists?
Please click here “AdvisoryHQ’s Ranking Methodologies” for a detailed review of AdvisoryHQ’s selection methodologies for ranking top-rated credit cards, financial accounts, firms, products, and services.
Detailed Review—Top Ranking Best Credit Cards to Rebuild Credit
There are many options to consider when choosing the best credit cards for rebuilding credit. Each option has its own advantages and drawbacks, so it is important to choose a credit card for rebuilding credit with a good balance of good and bad. Since each customer’s finances and preferences will be unique, the best credit cards for rebuilding credit might be different for each person.
BankAmericard® Secured Credit Card Review
Image from Bank of America
When looking for the best credit cards to rebuild credit, the BankAmericard secured credit card is a good option to consider. Because it is a secured card, the BankAmericard® option has security deposits and credit limits that range from $300 to $4,900. Credit limits are assigned by the bank based on an applicant’s income and ability to pay, but may have to opportunity to be increase as you use the credit card to rebuild credit.
Customers can use this as a rebuilding credit card for an initial 12 months. After this time, all secured credit card accounts are reviewed. If using this credit card to rebuild credit has been successful and credit has improved, the security deposit will be returned. To help with this process, the Bank of America offers credit education concerning budgeting and responsible credit card use.
When compared to the other cards under review, this option has a relatively high annual fee of $39. However, it has an average variable APR of 20.49%. This is a balance to consider when choosing the best credit card to help rebuild credit. There is a 3% fee for each balance transfer transaction, which is something to consider if you are looking for good balance transfer credit cards for bad credit.
Options and Security Features
This is one of the best credit cards to rebuild credit because it offers a wide range of competitive security features. These features can offer customers peace of mind and include:
- Abnormal spending detection and blocking
- Zero customer liability for fraudulent transactions
- Free online shopping security options to create a temporary card number for each online transaction
- Chipped cards
This is more than just a rebuilding credit card. Bank of America offers many useful features to give their customers added convenience. These features include: online and mobile banking options, a huge network of ATMs, available overdraft protection, and email or text message account alerts to help keep spending under control.
Citi® Secured MasterCard® Review
Citi Bank offers a secured MasterCard that may be one of the best credit cards for rebuilding credit. The security deposit and credit limit for this card can range between $200 and $2,500. These are determined based on each customer’s debt-to-income ratio, and the deposit will be held in a separate account for 18 months. Though this is a good option for credit rebuilding credit cards, applicants will not qualify if they have declared bankruptcy in the past two years.
Of the rebuilding credit cards being reviewed, this option has a high variable purchase APR clocking in at 22.24%. However, there is no annual fee with the Citi® Secured MasterCard®. The lack of an annual fee is something significant to consider when choosing the best credit cards for rebuilding credit.
Security and Insurance
Citi Bank is a competitive option for credit rebuilding credit cards. They offer a wide range of security features that can help prevent fraud and assist customers when the unthinkable does happen. Citi Bank will offer customers assistance identifying accounts that are affected by fraud or identity theft, filing related police reports, and reestablishing good credit after fraud or identity theft. The bank also does not hold customers liable for unauthorized card charges.
Citi Bank offers more than just credit rebuilding cards. They also offer special insurance to their customers for purchases made with a Citi credit card. The insurances can offer customers comfort and security to protect the things that are important to them. Insurance options include:
- Travel Accident Insurance
- Reimbursement for non-refundable trip expenses for canceled or disrupted travel
- Rental car insurance
- Refunds or repairs for damaged or stolen within 120 days of purchase
Discover it® Secured Credit Card Review
Image from Discover
Discover offers one of the best credit cards to help rebuild credit that also offers cash back rewards. The Discover it® secured credit card offers 1% cash back on every purchase and 2% cash back on purchased made at restaurants and gas stations. This is limited up to $1,000 each quarter.
Since this is a secured credit rebuilding card, it allows for a credit limit and security deposit between $200 and $2,500. The limits are determined based on each applicant’s income and ability to pay for their charges. Security deposits will be refunded under two conditions: cardholders must repay their entire balance and close their account, or after one year, those with high enough credit improvements will be refunded their deposits.
This credit rebuilding card has a high variable APR of 23.24%. However, it does compensate for this draw back by requiring no annual fee and by offering cash back rewards. In addition to the regular rewards options, for the first year Discover will match any money earned by the card, essentially doubling rewards.
One feature makes this one of the best credit cards to help rebuild credit. Each monthly statement includes the cardholder’s FICO credit score. This is a huge bonus to help repair credit because it allows customers to easily track their progress. In addition to being available on monthly statements, credit scores can also be accessed online or through the mobile app for added convenience.
Sun Trust Secured Credit Card with Cash Rewards Review
Sun Trust Banks offers another one of the best credit cards for rebuilding credit. As a secured credit card, it does require a security deposit. However, this is one of the few credit rebuilding credit cards that allows security deposits to earn interest as they are being held.
This is a rewards and rebuilding credit credit card that offers a few options as to how rewards can be earned and spent. Customers are able to earn 2% cash back on up to $6,000 of purchases made each year on gas and grocery purchases that qualify. All other qualifying purchases can earn unlimited 1% cash back bonuses. Rewards are not required to be redeemed for cash, they can also be used toward gift card or travel expenses.
Like some of the other credit cards for rebuilding credit, Sun Trust includes FICO credit scores in each monthly statement. This allows customers to better track their credit improvements. When credit scores have improved enough, the security deposit will be refunded, and customers will be offered the opportunity to upgrade to a different credit card
Not only does this credit rebuilding credit card offer an extensive rewards program, it also has a relatively low APR of 20.24% on all purchases. There is however, an annual fee of $32 to keep in mind. These three factors must all be accounted for in order to fully judge the Sun Trust secured credit card. The APR is the same for balance transfers, which might make this a good option for balance transfer credit cards for bad credit.
U.S. Bank Secured Visa® Card Review
Image from US Bank
The U.S. Bank Secured Visa® Card is a fairly straightforward option to use as a credit card to help rebuild credit. This card does not offer any rewards, but does have a very attractive variable APR of 19.24%. However, this benefit is balanced out a little by the annual fee of $29.
If using this credit card to help rebuild credit has been successful, after 12 months, customers have the option of recollecting their security deposit and upgrading to an unsecured card. However, if this time is not long enough for this credit card to rebuild your credit, customers can continue using the card as normal.
U.S. Bank also offers some good options and security features. Suspicious or unusual activity on the card will be alerted to the cardholder, and they will not be held liable for any unauthorized transactions. U.S. Bank also offers rental car insurance when charged to the card and online banking options to help customers monitor their statements, account history, balance, and make payments with their cards.
Wells Fargo Secured Credit Card Review
Image from Wells Fargo
Wells Fargo offers an option that may be one of the best credit cards for rebuilding credit. This card has a nice APR and annual fee of 19.24% and $25, respectively. The APR is the same for balance transfer transactions, but customers can be charged up to 5% for each balance transfer with a minimum of $5. This is something to keep in mind if you are looking for balance transfer credit cards for bad credit.
This options has a minimum credit limit and deposit of $300. Once this rebuilding credit credit card has been used successfully, they security deposit can be refunded and the customer will be given the option of upgrading to a different card. There is no set time frame for that this must adhere to.
Not only does Wells Fargo offer one of the best credit cards to rebuild credit, they also offer many services to help make the use of their rebuilding credit credit cards safe and convenient. These features include but are not limited to:
- Emergency card replacement
- Roadside dispatch assistance
- Mobile and online banking
- Email or text alerts
- Warnings of unusual card activity
- Customers are not liable for promptly reported unauthorized transactions
- Budgeting and finance tools
Conclusion—Top 6 Best Credit Cards to Rebuild Credit
It is important to remember that even the best credit cards for rebuilding credit are only tools. They do not offer a magic bullet that will automatically restore a credit score. They are only helpful if they are used correctly.
The best way to rebuild credit is to ensure that every payment is made on time each month. Late or missing payments can dramatically effect a credit score in a negative way. Some of the best credit cards for rebuilding credit are cards that help customers understand and manage these payments.
Using any of these credit cards to help rebuild credit could work very well. Determining which are best credit cards to rebuild credit will depend entirely on each individuals needs. Keep all of AdvioryHQ’s tips and strategies in mind as you choose the best card for your finances.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
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