The Best Credit Cards for Bad Credit

A credit card can cure bad credit from the past but you need to make sure you utilize the card properly in order to repair your credit and not end up with more debt. There are a few simple rules that you can follow while rebuilding your credit that will help you out tremendously.

  • Find out your credit score and know it regularly.
  • Determine whether a credit card or short term loan is what you need.
  • Utilize a credit monitoring service to better understand the changes in your credit score.
  • Don’t use rewards programs as a judge of a credit card.

Before you can attempt to repair your credit though you need to know what is causing you to have a bad credit score. The federal government allows you to pull one free credit report every 12 months. You can use this credit report to analyze what is wrong with your credit score and where you can improve. Once you understand your credit score you may choose to use a credit monitoring service so that you can be updated on your credit score regularly. These credit monitoring services use “soft pings” to test your credit score and these pings do not negatively impact your credit score. In fact, they won’t even show up on your credit report.

 

Two Types Of Bad Credit Credit Cards

There are two types of credit cards for those who have bad credit. Unsecured cards offer you the ability to have a more traditional credit card without having to put money down but they tend to have bad terms when you don’t have good credit. Secured credit cards require a security deposit that guarantee that you will use your credit card responsibly. These cards can have good or bad terms but are typically better if you can afford the deposit.

Capital One Secured Master Card

If you are short on credit but still looking to raise your credit the Capital One Secured Master Card is a good choice for you. This card relies on making a collateral deposit that goes towards guaranteeing responsible use of the card. You don’t even need to offer up any more cash than your original deposit to start seeing results with this card. The best part about it is that it is offered by a major bank, which means that you can connect it with your existing Capital One accounts or even move to an unsecured card once you have started to get your credit under control.

Pros:

  • You only need to make your collateral deposit within 80 days of opening your card.
  • Unlike with many secured credit cards your limit may be raised when you show good spending habits without the need to increase your deposit.
  • Included with this card is the Capital One Credit Tracker tool to help you track your credit and see how responsible you are being with your credit.
  • An annual fee of $0 is almost unheard of in secured credit cards.

Cons:

  • At 24.9% interest this is one of the highest interest credit cards out there.
  • Like many secured credit cards, there isn’t a reward program associated with this card.

Wells Fargo Secured Visa Card

The Wells Fargo Secured Visa Card is another card from one of the major banks in the United States. This card has one major difference though. It allows you to get a much higher credit limit than most secured credit cards, making it the perfect card for those who have money to put down to cover opening a card. With a larger credit limit you have the ability to keep your debt utilization ratio down low, which means you aren’t using a majority of the credit limit you have available to you.

Pros:

  • Possible credit limit of up to $10,000 depending on the collateral you have to put down.
  • Low annual fee of $25.

Cons:

  • No free credit report/score provided by Wells Fargo with the bill.
  • No rewards program.
  • High APR of 18.99% (lower than the Capitol One Secured Master Card Though)

US Bank Secured Card

For those that don’t want to have to worry about having a security deposit held for a long period of time you should look into the US Bank Secured Card. Most secured credit cards or only evaluated after more than 18 months. US Bank evaluates their cards after 12 months to identify whether you can move to an unsecured card or not.

Pros:

  • $5,000 possible credit limit if you have the collateral to put up.
  • Fast evaluation of secured status.
  • With an annual fee of $29, this is yet another low fee credit card.

Cons:

  • No free FICO score access with U.S. Bank.
  • A 0% balance transfer APR for 9 months, then a raise to somewhere between 12.99-23.99% depending on your credit history.

Navy Federal nRewards Secured Card

The Navy Federal nRewards Secured Credit Card is probably the best secured credit card that you can find on the market. The major reason this card does not score higher on the list is that you must have an “in” at the Navy Federal Credit Union or be a U.S. Department of Defense employee. This means that the list of people who can actually get this card is relatively short.

Pros:

  • Potentially low APR between 8.99-18%.
  • No annual fee.
  • Unlike many secured credit cards, the nRewards card earns points.

Cons:

  • Limited membership into the Navy Federal Credit Union.
  • A minimum of $500 of collateral is needed for the card. Higher than most other cards.

Digital Federal Credit Union Visa Platinum Secured

This card makes this list for two reasons, it has a low interest rate and no annual fees. It is also a credit union that is relatively easy to join, especially compared to the Navy Federal Credit Union. All you need to do to join this credit union is to make a donation to a charity, this donation is even one time.

Pros:

  • 0$ annual fee.
  • Low APR of 11.5% variable.
  • Reports to all three credit bureaus.

Cons:

  • Secured card.
  • No rewards program.

Citi Secured MasterCard

The Citi Secured MasterCard is another prime example of a great secured credit card with one major flaw. This card offers the ability to hold your security deposit in CDs instead of interest-free savings so you get a little bit of money back when it comes time to get your security deposit back. However, the card does have a high APR rate.

Pros:

  • Money stored in a CD instead of interest free.
  • Ability to move up to an unsecured card in 18 months.
  • Low annual fee of $29.

Cons:

  • A high APR rate of 18.24%.

USAA Secured Platinum MasterCard

USAA is a financial services group that offers a lot of different credit and spending options. The USAA Secured Platinum MasterCard is a great option or those who want to make money on their deposits. This card too has the money stored in a CD where it will earn interest.

Pros:

  • Low APR of 9.90% to 19.90% depending on your credit score.
  • Secured deposit is stored in a CD.
  • You can increase your CD deposits at any time which you can request as a credit limit boost.

Cons:

  • Annual fee of $35.

USAA Secured Card American Express

People like options and this credit card is very similar to the USAA Secured Platinum MasterCard with the exception that it is signed by American Express instead of MasterCard. It comes with the same great benefits including using a CD to store your secured deposit so you can earn money while rebuilding your credit.

Pros:

  • Similar low APR rate of 9.90-19.90% based off your credit score.
  • Your secured deposit is stored in a CD.
  • Increasing the amount of deposit in your CD has the potential to request a credit limit boost.

Cons:

  • American Express cards aren’t accepted everywhere due to the high transaction fee for sellers.
  • Another annual fee of $35.

Open Sky Secured Visa Card

The Open Sky Secured Visa Card is a low APR card that offers the option to put down less collateral than your approved credit limit. This card has only two fees and just about anyone can get the Open Sky Secured Visa Card. Public Savings doesn’t even require a credit check in order to get this card which is fairly unique. Despite the fact there is no credit check required this card reports to all three credit bureaus.

Pros:

  • Low APR of 9.75%.
  • $200 of collateral can get you up to $3,000 of credit line.
  • Only two fees, only one of which is recurring.

Cons:

  • An annual fee of $50.
  • After the first year if you want to increase or decrease the credit limit there is a $25 charger per action. You can change the credit limit within the first year without any penalties so try to plan ahead to avoid the $25 fee.

Credit One Bank Credit Card with Gas Rewards

The Credit One Bank Credit Card is an unsecured credit card that has the potential to turn around your credit score fairly rapidly. It is often considered one of the best sub-subprime unsecured credit cards for people with bad credit. They are not for people with good credit. There are some problems with it. For example Credit One Bank will try to find as many fees as possible if you don’t stay on top of it.

Pros:

  • You can prequalify for this credit card which uses a soft credit check that doesn’t affect your credit score.
  • Regular, automatic reviews for increases of your credit line.
  • 1% unlimited cash back program for gas.

Cons:

  • High annual fee (between $39 and $99).
  • You have to qualify for the card.

Total VISA Credit Card

The total visa credit card is issued by Mid America Bank & Trust. This card is a good option for someone who wants to open a card quick and doesn’t care about having a rewards program. It is especially targeted at those with bad credit. It has a high annual fee with an even higher fee on the first year.

Pros:

  • Instant or near instant approval.
  • Reports monthly to all credit bureaus.

Cons:

  • High APR of 29.99%.
  • First year annual fee of $75 with a recurring annual fee of $48.
  • Processing fee for opening an account.

Capital One Cash Rewards for Newcomers

Targeting a different type of customer the Capital One Cash Rewards for Newcomers isn’t targeted at those people who are looking to increase their credit score. It is instead targeted for those who are moving to the United States and want to build up a credit score. The thing about this is though that Capital One doesn’t prevent people with bad credit from applying for the card and using it to boost their credit score.

Pros:

  • Rewards program with 2% on travel and 1% on everything else.
  • You don’t have to wait for cash back and can get it at any time as an account credit or a check.
  • No annual fee and no foreign transaction fee.

Cons:

  • High APR of 24.9%.

Remember, before signing up for any credit card, do your research. There are a lot of less than ideal credit cards that exist on the market that will look great at first than catch you with high APRs or annual fees or the like. These cards tend to target people with bad debt because they know that those with bad debt are most interested in getting credit cards.

It is also important to ensure that you are making regular payments on your credit cards. Regular payments by themselves will help you to build up your credit score. Late payments will hurt your credit score.

In some cases you might want to consider getting a short term loan instead of a credit card. Short term loans allow you to lump your whole sum together and potentially get a lower APR. This is especially beneficial for those that have a lot of debt and a high APR.

Having a good credit score is important. It will help you to get car loans or even rent an apartment. Good luck building up your credit score and hopefully one or more of these cards will help you out.

 

Charles Schwab Review

When it comes to looking for an online broker it can take a lot of work. There are many online brokers available, and each one offers competitive commission prices; free research and trading tools, multiple trading products; useful trading platforms, good customer service, and additional banking options.

With so many similarities, it can be time-consuming to thoroughly review each online broker that interests you. The exhaustion of the process may also leave you to make a snap decision and choose a broker with low commission fees without looking at the bigger picture (such as what extra costs there are and how helpful customer support is). For example, there are online brokers out there that provide low commission fees, but then hit you with a required minimum of trades to use the trading platform or an extra cost for it. If you’ve experienced this or other issues with your broker, you’re probably looking for a new broker that will provide you with good service, low commission fees, and minimum extra costs. Charles Schwab offers reasonable commission fees, great service, and extremely low extra costs.

Charles Schwab

Known as a client-focused online broker for its exceptional customer service, Charles Schwab is described by many of its customers as an honest and trustworthy company. In this article, we will cover how Charles Schwab stands out and/or compares to its competitors in the following categories:

  • Costs and Fees
  • Special Offers and Special Services
  • Customer Service
  • Available Trading Products
  • Trading Platforms and Trading Tools
  • Research and Education
  • Banking

Costs and Fees

Minimum Deposit

One area where Charles Schwab beats many of its competitors is in the minimum requirement for customers to start an account. At this company, you have a choice between an Individual Brokerage account or a Joint Brokerage account. In either case, you need to deposit a minimum of $1,000 in your account. This is less than Fidelity, Scottrade, Interactive Brokers, and TradeStation. (As seen in Table 1.)

 

 

 

Table 1. Minimum Account Deposit Comparison Between Online Stock Brokers
Charles Schwab Fidelity Scottrade Interactive Brokers TradeStation
1,000 2,500 2,500 10,000 5,000

 

With a lower minimum account deposit, it is not only easier for customers to open an account sooner, but it also saves them more money right off the bat.

Commission Costs

Stocks

Commission Costs for Stocks are $8.95. This is less than E-Trade and TradeStation, but more than Scottrade. Commissions also come with no Per-share fee, unlike TradeStation. (See Table 2.)

Table 2. Online Broker Stock Commission Fees Comparison
Fees Charles Schwab E-Trade TradeStation Scottrade
Fees

Flat-fee trade:

 

8.95

 

9.99

 

9.99

 

7.00

Per-share:

 

N/A N/A 0.01 N/A

Options

There are 3 fees for options:

  • the Options Trade Fee plus Contract fee
  • the Options Exercise Fee (fee paid to use the call or put option)
  • the Options Assignment Fee (fee paid for option writer to fulfill option contract)

Option Trades are priced the same as stock trades at 8.95 with a small charge for contracts at .75 cents. Option Exercise Fee and Options Assignment Fee are also 8.95 each. These prices demonstrate how Charles Schwab tries not to surprise customers with unexpected extra costs. In comparison, E*Trade, TradeStation, and Scottrade charge more than what’s expected. (See Table 3.)

Table 3. Online Brokers Options Fee Comparisons
Fees Charles Schwab E*TRADE TradeStation Scottrade
Options Trade plus contract:

 

8.95 + .75 9.99 + .75 0 + 1.00 7.00 + 1.25
Options Exercise Fee:

 

8.95

 

19.99

 

14.95

 

17.00

 

Options Assignment Fee:

 

8.95 19.99 5.95

 

17.00

 

 

Broker Assisted Trades

Broker assisted trades are an extra cost because they compensate the broker’s time and effort. Charles Schwab broker assisted trades are $25.00 in addition to the $8.95 commission fee. This is less than Fidelity and Scottrade, but a little more than TradeStation and Interactive Brokers. (See Table 4.)

Table 4. Online Brokers Broker Assisted Trades Fee Comparison
Fees Charles Schwab Fidelity Interactive Brokers Scottrade TradeStation
Broker assisted trades:

 

8. 95 + 25.00= 33.95

 

7.95 +32.95= 48.85

 

0 +30.00=

30.00

 

7.00 + 32.00= 39.00

 

9.99 + 20.00= 29.99

 

ETFs

ETFs are a high point for Charles Schwab. If you’re looking to cut risks and diversify your portfolio with ETFs, Charles Schwab offers over 200 commission-free ETFs when traded through your Schwab account through Schwab ETF Onesource. This is the highest amount of commission-free ETFs offered than any other broker in the industry!

Mutual Funds

Unfortunately, Charles Schwab is not without a low point. The mutual fund trading fee is $76.00, one of the highest mutual fund trading fees among online brokers. However, while it costs $76 to buy mutual funds, it costs $0 to sell them.

 

No Fee Requirements

Another high point Charles Schwab has is $0 costs for things other competitors charge for. No fee requirements include:

  • No inactivity fees (you are not penalized for being an infrequent investor and can trade at your own pace)
  • No account maintenance (no worrying about that little extra cost of maintaining your account)
  • No annual fee (you don’t have to worry about paying a fee for your account)
  • No platform fees (both platforms have no requirement or fees to use)
  • No bond of CD trading fees

These no-fee requirements save you money and let your focus on investing.

Miscellaneous Fees

However, it is important to note that Charles Schwab has a few extra fees. Miscellaneous fees for Charles Schwab include:

  • $0 for treasury
  • $5 IVR trade
  • $0 IRA annual fee
  • $50 IRA closure fee
  • $0 Forced margin sellout fee
  • $25 dollar returned ACH fee
  • $25 returned wire fee
  • $500 stock certificate process fee
  • $0 stock certificate delivery fee
  • $0 paper statement fee
  • $0 paper confirmation fee
  • $25 domestic wire fee
  • $25 international wire fee

Yet, even these fees include $0 fees or lower fees than competitors.

Special Offers and Special Services

Special Offers

While browsing through brokers, you’ll notice that different firms offer different special offers and Charles Schwab is no different. However, this company’s special offer has a high value. For a deposit of $50,000 into your account, you can be enrolled into a special offer of up to 500 commission-free trades and get access to Charles Schwab trading coaches for one year.

500 Commission-Free Trades and Free Trading Coach

While other online brokers, like OptionsHouse (with an offer of 300 commission-free trades), have a special offer for commission-free trades as well, Charles Schwab offers more commission-free trades than anyone in the industry.

They are also the only online brokers to offer a free trading coach. Trading coach services include: “evaluating trade opportunities, reviewing and assessing trade performance, recognizing when to buy and sell stocks,” and more. This is a high-value offer because you’re able to get more specific help and more time with experts than normal, and you don’t have to worry about fees.

Charles Schwab notify their investors of this special offer on their website, but don’t force them to make a decision right away, leaving it up to them to decide when to take the offer, or notifying them when they’ve qualified.

Charles Schwab Global Account

You can also save money with Charles Schwab’s Global Account. The Charles Schwab Global Account is a unique account that only Charles Schwab offers, which lets you make trades internationally (like the brokerage account) using the specific countries currency instead of having to use U.S. dollars. Like the brokerage account, the Global Account has no annual or maintenance fees. In addition, you don’t need an account minimum to get started, so you don’t have to worry about depositing any extra money. To get your brokerage account, you download an application and fill it out. However, to get a Global Account, you must already have an account with a deposited minimum of 1,000 dollars.

Wealth Management Program

Charles Schwab also dedicate themselves to helping their investors with their wealth management program. Charles Schwab link you to available financial consultants in your area to help you get financial advice and guidance about your investments. “You’ll understand where your money is invested and why, how your investments are performing, and how much it’s costing you. Plus, you’ll have access to expertise, specialists, and insights to help you reach your specific goals” (“Wealth Management”).

Specifics

There are no fees for the initial visit with the consultant. You can meet with a consultant before getting an account to decide if you want to continue using the wealth management program. The fees begin when you start having your account or accounts managed in the program. The fees are generally 1% per year, but verify based on how in-depth you situation is.

Intelligent Portfolios

Described as a “robo-advisor platform,” by Alice Holbrook, a staff writer covering insurance and investing for NerdWallet, Charles Schwab Intelligent Porfolios build, monitor, and rebalance your investing accounts so you don’t have to (Holbrook, “Intelligent Portfolios Review: Schwab Robo-Advisor Has No Fees, But It Does Have Costs”). To get started, you must deposit a 5,000 dollar minimum and answer a risk assessment questionnaire.

Pros

  • Portfolios include more handpicked ETFs than other robo-advisor platforms
  • There are no advisory, commission, account or maintenance fees (the only costs you have to worry about are how your ETFs are performing)
  • Live help is available anytime
  • Daily profile monitoring and rebalancing of up to 20 assets is available for accounts that maintain at least a 5,000 dollar balance

Cons:

  • You must have at least 50,000 dollars in the account to get automatic tax-loss harvesting

Customer Service

Rated as #1 in Customer Service and Trade Reliability in 2015, critics and customers alike comment positively on Charles Schwab’s customer service. With over 500 positive reviews, customers comment that Charles Schwab staff are patient, knowledgeable, readily available, and considerate when answering questions or helping them solve issues. Blain Reinkensmeyer, the head of StockBrokers.com equity broker research and reviews, states that Charles Schwab’s customer service is “a consistent and often memorable experience” with “courteous and knowledgeable representatives” and takes the “#1 ranking in both phone and live chat support” (Reinkensmeyer, “Charles Schwab Review”).

Customer service is available 24/7, 7 days a week, and can be accessed through live chat (on the website), email, phone, Facebook, or Twitter.

Available Trading Products

Charles Schwab offers a wide range of trading products including Bonds, Stocks, ETFs, Mutual Funds, CDs, Options, and Futures. This gives the company a few pros and cons in comparison to its competitors.

Pros

  • Charles Schwab offers more lower risk products (CDS, Bonds, ETFs, and Mutual Funds) than OptionsHouse, Fidelity, Interactive Brokers, E*TRADE, and Trade Station
  • Charles Schwab offers Futures (while some of its competitors do not)
  • Most trading products have low ($0) or fair fees ($8.95)
  • Charles Schwab has over 16,000 mutual fund and over 4,800 stocks—higher than 6 of its competitors

Cons

  • Charles Schwab does not offer FOREX trading

Trading Platforms and Trading Tools

Trading Platforms

As mentioned before, trading platform are free to use for account holders and don’t have any requirements to access. Both trading platforms also have extremely fast execution speeds for buying and selling.

Charles Schwab has two trading platforms: StreetSmart.com and StreetSmart Edge. Both trading platforms include:

  • Alerts (you can set up specific alerts)
  • Automated trading (you can automate your trading)
  • Conditioned orders (you can place orders to immediately trigger or cancel a trade)
  • Customization (you can customize the look of your trading platform)
  • Level II quotes (you can get access to the buyers and sellers for individual stocks)
  • Options tools (you can learn what options are and how to use them)
  • Platform Advanced (you can access a more advanced trading platform)
  • Daily Reports (you can see updates of your profits and losses each day)

StreetSmart.com

StreetSmart.com is web-based, easy to use, and also includes “real-time streaming watch lists” (Reinkensmeyer, “Charles Schwab Review”).

StreetSmart Edge

StreetSmart Edge is desktop-based and requires a “slight learning curve” (Reinkensmeyer, “Charles Schwab Review”). It is a platform more suited for active traders and includes “customizable watch lists,” “markers” that appear to show you when and at what price you purchased a stock, and “notifications on order triggers fulfilled” Reinkensmeyer, “Charles Schwab Review”).

Research and Education

Research

Reinkensmeyer reviews that Charles Schwab “provides the highest quality research” compared to any of the 17 online brokers he’s tested at StockBrokers.com (Reinkensmeyer, “Charles Schwab Review”). While other online brokers provide research on their websites, Charles Schwab’s research is extensive and more in-depth, providing investors with better market research and company analytics to help them make more guided decisions.

Equity Ratings

Charles Schwab also goes one step further than other online brokers by providing investors with high-quality insights on which stocks will be the most high performing and which stocks will be the most low performing, so that investors know which stocks they should buy and sell to cut risks and make the most profit.

Specifics

Equity Ratings “are assigned to approximately 3,000” of the largest stocks . . . Stocks are rated using a scale of “A,” “B,” “C,” “D,” and “F.” Schwab’s outlook is that “A” rated stocks, on average, will strongly outperform and “F” rated stocks, on average, will strongly underperform . . . over the next 12 months” (“About Schwab Equity Ratings”). (For more specific information view http://www.schwab.com/public/file/P-4603911/for_schwab.com_SLS30364-05.pdf.)

Education

The Charles Schwab website is a goldmine of information for account holders that want to become better investors. The “Insights” section of their website provides guides, articles, feedback, and videos. You can also get access to classes, webinars, and live seminars. Customers give these classes high ratings for having different levels available (there are classes specifically designed for beginners and advanced investors), being led by knowledgeable staff, and providing useful and applicable information.

Banking

Like other online brokers, Charles Schwab offers banking services through their bank; however, they are rated more highly for their bank features and services. Bank features include:

  • Checking accounts
  • Savings accounts
  • Debit cards and credit cards
  • Mortgage loans

Charles Schwab Bank also includes a one-of-a-kind High Yield Investor Checking Account not offered by any other broker.

High Yield Investor Checking Account

With a High Yield Investor Checking Account you get:

  • No minimum deposit
  • No maintenance fees
  • No ATM withdrawal fees worldwide
  • No Schwab Bank Bill Pay fees to pay your bills online or using a mobile device
  • Automatic linking to your brokerage account

Anyone who has banked before and dealt with minimum deposits, monthly maintenance fees, and annoying ATM withdrawal fees will see this as a huge benefit and a great way to save money than by linking their own separate bank account to their brokerage account.

Bottom line for Charles Schwab

When it comes down to it, Charles Schwab may not have the lowest trading costs, but it does excel in quality service, multiple options, low extra costs, and reliable customer service. You can put your trust in this company and its staff and gain a lot of benefits by choosing them as your online broker.