If your credit rating is in the low 600’s or worse, then you’ll be stuck looking for a bad credit card, and most of them are secured. This means you’ll likely have to put up collateral towards your credit limit. While this deposit is usually refunded at some point, it’s obviously preferred to avoid this cost altogether.
So if you do have a low FICO score, there are some cards you can apply for that might qualify you without a deposit. There’s a possibility they will ask for a deposit still, but each of these cards has been approved for borrowers with weak credit ratings before.
Best No Deposit Cards for Bad Credit of February 2024
While the options are limited, the team at ElitePersonalFinance has brought together a shortlist of quality business credit cards that don’t require deposits. We recommend you consider Prepaid Business Cards as an alternative, though; if you have bad credit, a prepaid card has no interest typically, so you don’t have to worry about facing a potential APR rate of 20% or higher.
First PREMIER Bank Card
There’s a $95 processing fee you have to pay once you get approved. There’s also a 36% APR rate. This is super high, but even those with destroyed credit stand a chance to qualify.
Your annual fee can run from $75 to $125 in the introductory year and $45 to $49 in the following years.
Unfortunately, both First PREMIER Bank and FIRST PREMIER Bank Gold do not currently allow New York or Wisconsin applicants.
After some time, you can get a credit limit increase on your First PREMIER Bank credit card. This will help you grow your total available credit and lower your utilization rate.
Milestone Gold MasterCard
This card also offers pre-qualification so that you can avoid the hard inquiry defect on your credit report.
It has a fixed rate APR of 23.9%, and there’s only a $35 annual fee. You could potentially get approved for this card with as low as a 630 FICO score.
Aside from the high APR, there’s also a 1% foreign transaction fee, making it a non-ideal to use while traveling abroad.
There are no major perks with this card. You don’t get rewards back, but your annual fee will be cheap. Milestone Gold MasterCard’s best thing is that even those with poor credit can get accepted for it.
Another cool feature is the ability to custom select the physical card’s design.
Indigo Platinum MasterCard
Pre-qualifications are also available for Indigo Platinum MasterCard. Almost everyone, regardless of creditworthiness, can get accepted.
It covers your warranty for longer and offers a price protection policy. It even gives you identity restoration services for free if they’re ever needed.
You’re fixed to a $300 credit limit, and the card features a 23.9% APR rate. When you apply, you can get pre-qualified; there’s no need to make a hard inquiry and drag your credit score down.
The interesting thing is how annual fees are charged. It goes based on your creditworthiness, with $0, $59, and $75 being the possible annual fees. If you get a $75 fee, it will become $99 after your introductory year. This annual rate is excessive, so you will want to close it after it helps you get your FICO score strong enough to qualify for a much better unsecured card.
Another great feature with Indigo Platinum MasterCard is people can choose their cards’ design.
About No Deposit Credit Cards
Why apply for a high-interest rate card?
You can get a better APR rate on a secured, but they won’t hold as much strength on your credit report. They are marked as ‘secured’ cards specifically, while an unsecured card that doesn’t require a deposit will be marked as ‘unsecured’ instead.
So taking on a higher interest rate might be worth it for you.
How do they affect your credit score?
Your FICO score will vary depending on your debt compared to the amount you can borrow. Your credit accounts’ average age can also influence your credit rating in either direction. They will report your payments so that you will notice a considerable credit rating boost after a while.
Will a secured credit card work instead?
The last answer gives you insight into why you don’t want to bother signing up for a secured credit card. However, if you aren’t happy with any of the no-deposit unsecured cards, you should consider Discover it Secured Card. This can be upgraded into an unsecured card, and it gives up to 2% in cashback rewards, making it the best cashback secured card around.
Are prepaid business credit cards a good alternative?
We mentioned earlier that you might want to consider prepaid business cards instead of no-deposit unsecured. The biggest benefit of prepaid cards is that you avoid paying interest altogether. If you carry a balance monthly instead of paying it off quickly, both secured and unsecured will cost you a lot. While prepaid cards have no reward incentives, they are set up better than most credit cards for business purposes.
Look at Bento MasterCard and the PEX VISA prepaid cards. They both let you specifically control how much money is loaded, how often the card funds itself, where each cardholder can spend funds (ex. gas stations ‘YES,’ restaurants ‘NO’), and much more. The employee cards administrator can even suspend it(ex. if an employee quits) whenever necessary. All this can be done remotely, and you can even use an app to control all your employee cards from your cell phone if you go with the PEX VISA card specifically.
Many like the idea of a prepaid card because they work the same as a credit card, yet they have no APR rate to stress over. It’s only an unappealing alternative if you need extra financing and you don’t have collateral funds to put up. But for those who are just against the idea of a secured card, it’s worth weighing out the benefits and downfalls of a prepaid business credit card.