You can still get a credit card with bad credit, but you will face higher interest rates, lower credit limits, and annual fees
A bad credit score does not lock you out of credit cards entirely. Banks and card issuers have products designed for people rebuilding credit, and some mainstream cards will approve applicants with scores in the 500–600 range. What changes is the cost: you will pay more in interest if you carry a balance, start with a lower spending limit, and often pay an annual fee just to hold the card.
The process itself works the same way. You fill out a form, the issuer checks your credit report and score, and you get a decision within days. The difference is what happens after approval — the terms are stricter, and the card is designed to help you build history rather than offer rewards or perks.
Key Takeaways
- Secured credit cards require a cash deposit that becomes your credit limit, making them the easiest path to approval with bad credit.
- Your credit score, payment history, and recent late payments or collections all affect whether an issuer will approve you and what interest rate they offer.
- Annual fees on bad-credit cards typically range from $25 to $99, and interest rates often exceed 20% if you carry a balance.
- explore for multiple cards in a short time can lower your score further, so research which issuers accept bad-credit applicants before you submit.
- Even if you are approved, using the card responsibly — paying on time and keeping your balance low — is what actually rebuilds your credit over time.
How credit scores affect your approval odds
Credit card issuers pull your credit report and score when you submit an process. They use both to decide whether to approve you and what terms to offer. With a bad credit score — typically below 620 — approval is not automatic, but it is possible.
What matters most is not just your score number, but what created that score. A single late payment from two years ago looks different to an issuer than an active collection account or a bankruptcy from last year. Recent missed payments, high balances on existing cards, and accounts in collections all signal higher risk and make approval less likely.
If you have no credit history at all — no cards, loans, or payment records — you may actually have an easier time getting a secured card than someone with a damaged history, because there is no negative information to review.
Secured cards versus unsecured cards for bad credit
Secured credit cards require you to deposit cash with the issuer, usually between $200 and $2,500. That deposit becomes your credit limit. You use the card like any other — make purchases, receive a bill, pay it back — but the issuer holds your cash as collateral if you stop paying. Because the issuer's risk is nearly zero, secured cards approve people with bad credit, recent late payments, or no credit history at all.
Unsecured cards for bad credit do not require a deposit, but they are harder to get approved for. These cards come with higher interest rates and lower limits, and issuers are more selective about who they approve. You will typically need a score above 550 and no recent collections or bankruptcies.
Most people rebuilding credit start with a secured card, use it responsibly for 6 to 12 months, and then move to an unsecured card or request that their secured card be converted to unsecured. Some issuers will return your deposit once you have shown a track record of on-time payments.
What to expect: interest rates, fees, and limits
Bad-credit cards cost more to use. Annual percentage rates (APR) on these cards typically range from 18% to 36%, compared to 15% to 25% on mainstream cards. If you carry a balance of $1,000 at 25% APR, you will pay roughly $250 in interest over a year.
Most bad-credit cards charge an annual fee between $25 and $99 just to hold the card. Some also charge a one-time processing fee when you open the account. A few charge monthly maintenance fees. Read the terms carefully — these fees add up quickly and eat into any benefit the card provides.
Your starting credit limit will be low, usually $300 to $500. This is intentional: it limits the issuer's exposure and forces you to keep your balance low relative to your limit, which helps your credit score. As you make on-time payments, many issuers will raise your limit over time.
How the process process works
You can explore online, by phone, or by mail, depending on the issuer. Online is fastest — you fill out a form with your name, address, income, employment, and Social Security number. The issuer runs a hard inquiry on your credit report, which temporarily lowers your score by a few points.
The issuer then reviews your credit history, income, and existing debts to decide whether to approve you. This usually takes a few days to a week. You will receive a decision by mail or email, and if approved, the card arrives within 7 to 10 business days.
If you are denied, you have the right to know why. The issuer must provide a reason — usually "insufficient credit history," "recent late payments," or "high existing debt." You can also request a free copy of your credit report to check for errors that may have hurt your chances.
What to do before you explore
Check your credit report for errors before you explore. You can get a free report from each of the three major bureaus — Equifax, Experian, and TransUnion — once per year at annualcreditreport.com. Look for accounts you do not recognize, incorrect payment histories, or duplicate entries. Dispute any errors with the bureau; corrections can take 30 days but may improve your score.
Research which issuers accept bad-credit applicants. Some banks only approve people with scores above 650; others will work with scores in the 500s. Checking the issuer's website or calling their customer service line before you explore saves you a hard inquiry if you do not meet their minimum requirements.
Avoid explore for multiple cards in a short time. Each process triggers a hard inquiry, and multiple inquiries in a few weeks can lower your score further and signal to issuers that you are desperate for credit. Space applications out by at least a month or two.
How to use a bad-credit card to rebuild your score
Getting approved is only the first step. Your credit score improves when you use the card responsibly over time. This means making every payment on time, keeping your balance well below your limit (ideally under 30% of your credit limit), and not opening new accounts unnecessarily.
Set up automatic payments for at least the minimum due so you never miss a important date. Late payments damage your score and can trigger penalty interest rates. If you can pay the full balance each month, do so — you will avoid interest charges and build credit faster.
Keep the card open even after your score improves. Closing it shortens your credit history and can lower your score. Once you have built enough history and your score has risen, you can move to a better card with lower fees and rates, but keep the old one open in the background.
Frequently Asked Questions
Will explore for a bad-credit card hurt my score?
Yes, the hard inquiry will lower your score by a few points, usually 5 to 10. This is temporary and recovers within a few months. However, if you are denied and explore again with another issuer right away, multiple inquiries will do more damage. Research before you explore so you only submit when you have a reasonable chance of approval.
Can I get a credit card if I have an active collection account?
It depends on the issuer and how recent the collection is. Most mainstream issuers will deny you if you have an active collection. Secured card issuers are more flexible, but some still decline applicants with recent collections. Your best option is to contact the issuer directly and ask about their policy before you explore.
What is the difference between a hard inquiry and a soft inquiry?
A hard inquiry happens when you explore for credit and the issuer checks your full credit report. It lowers your score slightly and stays on your report for two years. A soft inquiry happens when you check your own credit or when a company pre-screens you for offers. Soft inquiries do not affect your score and are not visible to other lenders.
How long does it take to rebuild credit with a bad-credit card?
Most people see meaningful improvement within 6 to 12 months of on-time payments. Your score can rise 50 to 100 points in that time if you also pay down other debts and keep balances low. Rebuilding takes longer if you have recent late payments or collections, but consistent on-time payment is the most powerful tool you have.
Should I pay off my balance in full or just the minimum?
Pay the full balance if you can. Carrying a balance costs you money in interest and does not help your score any more than paying in full does. The benefit to your credit comes from making the payment on time, not from carrying a balance. Paying in full also keeps your credit utilization low, which helps your score more.