Credit can be a scary thing. Your financial health depends on good credit, but it’s easy to be reckless with credit cards and loans. Because of this, it’s not surprising why so many people have bad credit.

If you’re down in the dumps with a bad credit score, you’re probably wondering how you climb out of that hole.

It doesn’t seem like many options are available to fix your credit. If you’re on the road to achieving a better credit score, start with a guaranteed approval credit card.

You’re probably thinking: but wait, opening up a new credit card lowers my score even further. That may be true, but these cards have more restrictions that are easy to follow and will help improve your credit score over time.

Here are three reasons why guaranteed approval credit cards will improve your bad credit score.

1. You Only Have to Pay a Refundable Deposit

When all credit card companies turn you down, you need to pay a deposit so the credit card company can ‘trust you.’

The reason why this card a ‘secured credit card‘ is because you’re approved, regardless of your credit, as long as you pay the required deposit.

If you’re able to pay this deposit, you’ll receive approved and will be able to achieve guaranteed approval credit cards.

So how much is the deposit? It depends on the guaranteed approval credit cards and your credit score.

Typically, the deposit is the spending limit on the card. It may be less if you have a decent credit score.

You will receive a refund of the deposit. If you maintain good spending habits and pay off your credit card in full every month, you’ll receive a refund.

When do you receive a refund? Usually after a few months of having the card. If you decide to close your account, you’ll receive the deposit refund.

The credit card company reports this to the credit bureau. This is why a secured credit card is great for those with bad credit, as well as those with no credit.

Another benefit of this deposit: it will save you from debt. Let’s say in the past, you’ve had debtors contacting you. They push you to pay your debt, even when you can’t.

The deposit amount is the same as your credit limit for a reason. If you don’t pay your card off, the lender has your deposit. This way, debtors can’t contact you.

This is different if your card limit is more than your deposit. If you can’t pay off the amount each month, the debtors will contact you. Missing payments will also hurt your credit score even further, regardless of your deposit.

And here’s the best benefit of them all: that deposit can earn you money!

Depending on the credit card company, some store your deposit in an interest-earning account.

So let’s say you pay off your credit card in full every month, and you opt to not have your deposit refunded. That deposit can gain interest, earning you money.

You can let the deposit sit in the account, gaining interest. Once you close the secured credit card, you’ll receive a bigger refund than what you originally deposited.

Keep in mind, your credit score will go down when you close an account.

But you may take out a lot more than what you came in with. Make sure you have transparency with this lender, and you can see or the lender can inform you how much interest the deposit gained.

If it only gained a little interest, closing the account and decreasing your credit score won’t be worth it.

2. There is a Low Credit Line

When you first signed up for a credit card, the lender probably gave you a high credit limit. Wow, you think. This must mean they really trust me.

But then you fill up the card to the limit, and can’t pay it off each month.

This is the beginnings of bad credit — and how these credit card companies jip you.

When you receive guaranteed approval credit cards, they come with a low spending limit. You can use these cards pretty much anywhere and for any purpose, but you can’t go past the limit.

If you’re using secured guaranteed approval credit cards, this limit will be the deposit amount unless stated differently by the lender.

If you’re using an unsecured credit card, the lender will determine the limit based on your credit score and your credit card history.

Some credit cards, secured and unsecured, offer a low credit limit when you first request, regardless of your credit score and credit history. This amount is pretty small, such as $300.

This will either continue to be your limit, and it might rise if you pay your card off in full every month.

If you’re opting for an unsecured credit card, tread carefully. Only request if you’re confident you’ll receive approval. If you have a history of bad credit and not paying off your credit card, check the standards of these cards.

Unsecured credit cards may not require a deposit, but they require ongoing fees, annual fees, and request charges. Satisfying these fees may be difficult, even if you have a low credit line.

If you want to be safe, look into a secured credit card.

If you’re opting for a secured credit card, these numbers are a lot more lenient.

Since you’re putting down a deposit, you’re telling the issuer you can pay part, if not the whole amount, off. A lot of secured credit cards don’t require a credit score or credit check, so they can assign you whatever limit you want.

Just be sure to be smart about your limit; if you have a bad credit score, it’s safest to go with the minimum requirement.

If you believe you can go higher, be positive you can pay the card off in full every month — especially if you plan on carrying a month-to-month balance.

The issuer will assign an amount you’re confident you can pay. You can easily budget this amount and you’ll pay it off every month. This way, you won’t endure the stress of spending too much and worrying about increasing interest.


    • Guaranteed $500 Unsecured Credit Limit.
    • Must have Active Debit Card or Credit Card to qualify.

    *Terms Apply.Show more APPLY NOWIssuer Horizon Card ServicesRegular APRAnnual FeeCredit RecommendedOur take0%No annual feeBad, Limited or No Credit HistoryGood option for customers with damaged credit history looking for a guaranteed approval card


3. You Receive the Same Benefits Like a Traditional Credit Card

One of the benefits of guaranteed approval credit cards is they act like a traditional credit card. This is especially key if your card is a major credit card company.

Credit card competition is fierce. Banks, credit unions, and credit card companies duel it out with low-interest rates and a wide variety of benefits.

They want you to be a customer, regardless of your credit score. So they will offer the same or similar benefits as their average credit cards.

One of the major benefits is using the card anywhere. Unless you opt for a store-specific credit card (also a good idea when improving your credit) you can use guaranteed approval credit cards anywhere and for any purpose.

If you decide to only use your card for gas, great. If you use the card for gas, groceries, bill payments, and extra expenses, great. Since major credit card companies offer guaranteed approval credit cards, they’re accepted anywhere.

To make credit card payments easy, some guaranteed approval credit cards even offer a linked checking account. You can transfer a certain amount to this account every month so you always have money to pay off your credit card.

What if you want the benefits of a major credit card carrier. But you know your credit score isn’t good enough. Even these brands offer benefits with their guaranteed approval credit card.

These cards do have different standards, such as higher interest and an annual fee.

While the interest is a lot higher, the annual fee is lower — some of these cards hold close to a grand in annual fees. You also receive benefits such as cash back, travel perks, and a specific amount of credit free.

Some of these unsecured and secured cards don’t come with the fancy extras, but receiving and using the card is easier. These include no annual fee and a low APR.

With that said, not all guaranteed approved credit cards offer rewards. These are the ones that usually have low annual fees and APR.

If you don’t plan on using your guaranteed approved credit card for the long term, stick with one of the simple ones and switch over to a traditional credit card with perks when your credit improves.

Guaranteed Approval Credit Cards will Save Your Credit

If you want to improve your bad credit score but are running out of options, a guaranteed approval credit card will help get you back on your feet.

You either pay a deposit that’s equal to your limit, or you discuss credit line options with your issuer.

After about a year of using your guaranteed approval credit card, you’ll start to notice an improvement in your credit score.

If you have a low credit score, request a loan and pay off your debt.