You can get a credit card with poor credit, but the terms will be worse than what someone with good credit pays
A low credit score does not lock you out of credit cards entirely. Banks and card companies still issue cards to people with poor credit — they just charge higher interest rates, require a cash deposit, or add annual fees to offset the risk. The real question is whether taking on a card right now helps you rebuild or traps you in a cycle of debt.
Your options break into three categories: secured cards (you deposit cash as collateral), unsecured cards for poor credit (higher rates, often with annual fees), and cards from credit unions or retailers (sometimes easier to get, but with their own trade-offs). Each one works differently and costs you different amounts of money.
Key Takeaways
- Secured credit cards require you to deposit $200 to $2,500 in a savings account, and that deposit becomes your credit limit — the card issuer holds it as collateral.
- Unsecured cards for poor credit typically charge 25% to 36% annual interest rates and may include annual fees of $39 to $99, making them expensive to carry a balance on.
- Your payment history on any card — secured or unsecured — reports to the three credit bureaus (Equifax, Experian, TransUnion) and is the single biggest factor in rebuilding your score.
- Carrying a balance to build credit is a myth; paying in full each month costs you nothing in interest and rebuilds your score just as fast.
- A card with a $300 limit that you pay in full monthly is more useful for rebuilding than a $5,000 limit you carry a balance on.
How secured cards work and when they make sense
A secured credit card requires you to put money into a savings account that the card issuer controls. That deposit becomes your credit limit. If you deposit $500, your limit is $500. You then use the card like any other card — swipe it, pay the bill — and the issuer reports your payment history to the credit bureaus.
The deposit sits untouched unless you stop paying your bills. If you do, the issuer can take money from the deposit to cover what you owe. After 6 to 18 months of on-time payments, many issuers convert your card to a regular unsecured card and return your deposit. Some let you request conversion earlier if your credit score improves.
Secured cards make sense if you have almost no credit history, a very recent bankruptcy, or a credit score below 580. They also make sense if you want to avoid the high interest rates that unsecured poor-credit cards charge. The trade-off is that your money is locked up the whole time you hold the card. You cannot spend that deposit or move it to a different bank.
Watch out for secured cards that charge annual fees on top of tying up your deposit. A $300 deposit plus a $95 annual fee means you are paying nearly 32% per year just to use your own money. Compare the annual fee, the interest rate (which you only pay if you carry a balance), and the conversion timeline before you choose one.
Unsecured cards for poor credit: higher rates and annual fees
An unsecured card for poor credit does not require a deposit. The issuer takes the risk that you will not pay, and charges you for that risk through a higher interest rate. Most cards in this category charge between 25% and 36% annual percentage rate (APR), compared to 15% to 21% for someone with good credit.
Many also charge annual fees. A card might cost $49, $75, or $99 per year just to hold it, whether you use it or not. Some charge both an annual fee and a high APR. A few charge a one-time processing fee when you first open the account.
The math matters here: if you carry a $1,000 balance on a card with 30% APR and a $75 annual fee, you pay roughly $375 in interest and fees over a year — 37.5% of what you borrowed. That is why unsecured poor-credit cards are most useful if you plan to pay off your balance every month. If you cannot do that, a secured card with a lower interest rate is usually cheaper.
Some unsecured cards offer a path to lower rates after you prove yourself. They may drop your APR by 2% to 5% after 6 to 12 months of on-time payments, or let you move to a better card within the same company. Read the fine print to see what the issuer promises.
Credit union and retail cards: sometimes easier, but with limits
Credit unions often issue cards to members with poor credit on terms better than big banks offer. If you belong to a credit union, ask whether they have a card program for members rebuilding credit. Credit union cards typically have lower APRs than bank cards for the same credit score, though they may still charge annual fees.
Retail cards — issued by stores like Target, Walmart, or Amazon — are sometimes easier to get approved for than bank cards, and they may have lower starting APRs. The catch is that retail cards usually have a lower credit limit (often $300 to $500) and can only be used at that store or its partners. They are useful for rebuilding credit at one merchant, but they do not give you the flexibility of a general-purpose card.
Retail cards also report to the credit bureaus the same way bank cards do, so they help your credit score just as much. The downside is that if you only have a retail card, you have no card to use elsewhere, which limits how useful the card is in your daily life.
What actually rebuilds your credit score
Your credit score is built from five factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). A credit card touches all five, but payment history is by far the biggest lever you control right now.
Making every payment on time — even if it is just the minimum — reports to Equifax, Experian, and TransUnion and slowly raises your score. Missing a payment or paying late damages your score for seven years. This is why the card you choose matters less than how you use it.
The second factor, amounts owed, is about how much of your credit limit you use. If your limit is $500 and you carry a $450 balance, you are using 90% of your available credit, which hurts your score. If you use $50 and pay it off monthly, you are using 10%, which helps your score. This is why a card with a low limit that you pay in full is better for rebuilding than a high-limit card you carry a balance on.
Carrying a balance does not rebuild your credit faster. Paying interest does not rebuild your credit faster. Paying in full each month rebuilds your score just as quickly and costs you nothing. If you cannot pay in full, use the card only for small purchases you know you can pay off within a month or two.
How to avoid debt traps with a poor-credit card
The biggest trap is treating a new card as extra money. You are not borrowing money to spend — you are borrowing money to rebuild your credit. That means using the card for purchases you would make anyway, with cash you already have to pay it off.
Set a specific budget before you use the card. If you decide to put $50 per month on it, stick to $50. Do not let the available credit tempt you to spend more. Many people with poor credit got there by using available credit as if it were income.
Set up automatic payments if your card issuer offers them. Paying on time is non-negotiable for rebuilding credit. An automatic payment removes the risk of forgetting and missing a due date. Even if you cannot pay the full balance, set up an automatic payment for at least the minimum, due a few days before the due date.
Do not close the card once your credit improves. Closing it removes available credit from your score calculation and shortens your average account age, both of which can lower your score. Keep it open and use it occasionally, or keep it in a drawer and use it once or twice a year to show activity.
Comparing your options: secured vs. unsecured vs. retail
| Card Type | Deposit Required | Typical APR | Annual Fee | Best For |
|---|---|---|---|---|
| Secured | $200–$2,500 | 18%–24% | $0–$95 | Very low credit or no credit history; planning to pay in full |
| Unsecured (poor credit) | None | 25%–36% | $39–$99 | Need a card when ready; can pay in full monthly |
| Credit union | None (membership required) | 18%–28% | $0–$50 | Credit union member; want lower rates than banks |
| Retail | None | 20%–29% | $0 | Shop at one store regularly; building credit from scratch |
Next steps: choosing and using your first card
Start by checking your credit score. You can get a free score from AnnualCreditReport.com (the official site for your free credit report) or from many card issuers' websites. Knowing your score helps you understand which cards you are likely to be approved for.
If your score is below 580, a secured card is usually your best option. If it is between 580 and 650, you have access to both secured and unsecured poor-credit cards — compare the total cost (deposit plus annual fee plus APR) and pick the cheaper option. If it is above 650, you may may have access to for cards with better terms, though you will still pay more than someone with good credit.
Once you choose a card, use it for one small purchase per month and pay it in full before the due date. Do this for 6 to 12 months. Your score will rise, and you will have proven to yourself that you can use credit responsibly. After that, you can explore for a better card and move on.
Frequently Asked Questions
Will getting a credit card hurt my credit score?
A hard inquiry (the check the issuer does when you explore) temporarily lowers your score by a few points. But the benefit of on-time payments over the next months outweighs that small dip. The score drop from an inquiry fades after three to six months.
What is the difference between APR and interest rate?
APR is the annual percentage rate — the yearly cost of borrowing. Interest rate is the same thing. They are used interchangeably on credit cards. A 25% APR means if you carry a $1,000 balance for a full year without paying it down, you owe $250 in interest.
Can I use a secured card at any store?
Yes. A secured card works like any other credit card — Visa, Mastercard, or Discover — and is accepted anywhere that card brand is accepted. The deposit is just collateral; it does not limit where you can use the card.
How long does it take to rebuild my credit with a card?
Most people see a 50 to 100 point increase within 6 to 12 months of on-time payments. The exact timeline depends on how damaged your credit is and what else is on your report. A recent missed payment hurts more than an old one.
Should I get multiple cards to rebuild faster?
No. One card with on-time payments is enough. Multiple applications in a short time lower your score through multiple hard inquiries and make you look desperate for credit. Stick with one card for at least a year before explore for another.