What credit card options exist for people with low credit scores
If your credit score is below 620, most standard credit cards will reject your process. But you have real options: secured cards, store cards, and cards designed for rebuilding credit. These cards work differently from traditional ones — they require a cash deposit, charge higher interest rates, or come with stricter limits — but they report to the three major credit bureaus, which means they can improve your score over time if you use them responsibly.
The path forward depends on your score range, your income, and whether you have a bank account. A secured card is the most common starting point because it works with almost any credit history and gives you the most control over your credit-building timeline.
Key Takeaways
- Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and they report to all three credit bureaus to help rebuild your score.
- Store cards and gas cards often have lower approval standards than bank cards and can be easier to get with low credit, though they charge higher interest rates.
- Your credit score will improve only if you pay on time and keep your balance well below your limit — typically under 30 percent of available credit.
- After 6 to 18 months of on-time payments, you can request a credit limit increase or move to an unsecured card with better terms.
How secured credit cards work and why they rebuild credit
A secured card requires you to deposit cash with the card issuer. That deposit becomes your credit limit. If you deposit $500, your limit is $500. You then use the card like any other card — make purchases, receive a monthly bill, and pay it back. The deposit stays in a separate account and is not touched unless you default on payments.
The card issuer reports your payment history to Equifax, Experian, and TransUnion. This is the mechanism that rebuilds your score. Each on-time payment adds positive history to your credit file. After 6 to 18 months of consistent payments, many issuers convert your secured card to an unsecured card, return your deposit, and raise your limit based on your payment record.
The catch is the cost. Secured cards typically charge annual fees ($25 to $95) and higher interest rates (18 to 24 percent APR) than standard cards. If you carry a balance, interest accrues quickly. The strategy is to use the card for small, regular purchases and pay the full balance each month — this builds credit without costing you interest.
Comparing secured cards, store cards, and gas cards
| Card Type | Deposit Required | Typical APR | Annual Fee | Best For |
|---|---|---|---|---|
| Secured card | $200–$2,500 | 18–24% | $25–$95 | Building credit from scratch; works with any credit history |
| Store card | None | 20–29% | Usually $0 | People with low credit who shop at specific retailers; approval often faster |
| Gas card | None | 20–27% | Usually $0 | Regular gas purchases; easier approval than bank cards |
Store cards (issued by retailers like Target, Walmart, or Amazon) and gas cards (from Shell, Chevron, or independent networks) often approve people with lower scores because they limit where you can spend. A Target card works only at Target; a Shell card works only at Shell stations. This reduces the issuer's risk. Approval can happen in minutes, and there is no deposit required.
The downside is the interest rate. Store and gas cards typically charge 20 to 29 percent APR, higher than secured cards. They also report to the credit bureaus, so they build credit the same way a secured card does. Many people use a store card or gas card as a first step, then move to a secured card for more flexibility.
What happens to your credit score when you open a new card
Opening any new card triggers a hard inquiry on your credit report. This temporarily lowers your score by a few points — usually 5 to 10 points — and the inquiry stays on your report for 12 months. The impact is small and temporary if you have only one or two inquiries, but multiple applications in a short time can compound the damage.
After the initial dip, your score begins to recover if you use the card responsibly. Payment history (35 percent of your score) is the largest factor. A single missed payment can drop your score 100 points or more. Credit utilization (30 percent of your score) is the second factor — keeping your balance under 30 percent of your limit helps more than keeping it at zero.
Over 6 to 12 months of on-time payments and low utilization, most people see their score rise 50 to 100 points. The exact improvement depends on your starting score, how many negative marks are on your report, and how old those marks are. Recent late payments hurt more than old ones.
Steps to use a credit card to rebuild your score
Step 1: Choose your card type. If you have $200 to $500 available, a secured card gives you the most control and the clearest path to an unsecured card later. If you prefer to avoid a deposit, start with a store card or gas card at a place you shop regularly.
Step 2: Make a small purchase each month. Use the card for one recurring expense — gas, groceries, a subscription — something you would buy anyway. Keep the purchase small relative to your limit. If your limit is $500, spend $50 to $100 per month.
Step 3: Pay the full balance before the due date. Set a calendar reminder for the due date. Paying in full avoids interest charges and demonstrates to the issuer that you can manage credit. If you cannot pay the full balance, pay as much as you can — but on-time payments matter more than the amount.
Step 4: Do not close the card after your score improves. Closing a card removes available credit from your report and can lower your score. Keep the card open and use it occasionally, even after you move to a better card.
Step 5: After 6 to 18 months, request a credit limit increase or convert to an unsecured card. Contact your issuer and ask. Many secured card issuers automatically convert accounts after a set period of on-time payments. If they do not, you can request it. An unsecured card means your deposit is returned and your interest rate may drop.
Common mistakes that slow down credit recovery
The most common mistake is carrying a balance month to month. Interest accrues at 18 to 29 percent APR, which means a $100 balance costs you $1.50 to $2.40 per month in interest alone. Over a year, that $100 purchase costs $118 to $129. More importantly, carrying a balance signals to lenders that you are struggling to manage credit, which slows your score recovery.
The second mistake is opening multiple cards at once. Each process triggers a hard inquiry, and multiple inquiries in a short time can drop your score significantly. Space applications out by at least three months. One card is enough to rebuild credit; you do not need three.
The third mistake is missing a payment. A single 30-day late payment can drop your score 100 points and stays on your report for seven years. Set up automatic payments for at least the minimum if you are worried about forgetting. Missing a payment erases months of progress.
When to move from a low-credit card to a standard card
After 6 to 18 months of on-time payments, your score should be high enough to may have access to for a standard card with better terms. Most people can move to an unsecured card once their score reaches 650 to 700. At that point, you will find cards with lower interest rates (12 to 18 percent), no annual fee, and better rewards.
Before you explore for a new card, check your credit report at annualcreditreport.com (the only free, official source). Look for errors or old negative marks that may be dragging your score down. If you find errors, dispute them with the credit bureau — this can raise your score without waiting.
When you do move to a new card, keep your old card open. Closing it removes available credit and can lower your score. Use the old card occasionally to keep it active, then focus your spending on the new card.
Frequently Asked Questions
Will a secured card hurt my credit score?
The hard inquiry will lower your score by a few points temporarily, but the card itself helps your score over time. After six months of on-time payments, the positive impact outweighs the initial inquiry. The key is using it responsibly — small purchases, full monthly payments.
What if I cannot afford a deposit for a secured card?
Start with a store card or gas card instead. These require no deposit and have easier approval standards. They report to the credit bureaus the same way a secured card does. After six months of on-time payments, you may may have access to for a secured card or move directly to a standard card.
How long does it take to rebuild credit with a credit card?
Most people see a 50 to 100 point improvement within 6 to 12 months of on-time payments and low utilization. Older negative marks fade faster than recent ones. If you have recent late payments or collections, recovery takes longer — 18 to 24 months is more realistic.
Can I use multiple cards to rebuild credit faster?
Multiple cards do not speed up rebuilding; they slow it down. Each new process triggers a hard inquiry, which lowers your score. One card used responsibly builds credit faster than three cards with multiple inquiries. Focus on one card for 12 months, then add a second if needed.
What if I miss a payment on my low-credit card?
Contact the issuer when ready and pay as soon as you can. A payment 30 days late will be reported to the credit bureaus and can drop your score 100 points. Payments 60 or 90 days late cause more damage. If you are struggling, ask the issuer about hardship programs or payment plans before you miss a due date.