What cards will accept you with terrible credit
Banks and card issuers that work with people who have very low credit scores fall into two categories: secured cards, which require a cash deposit, and unsecured cards designed for poor credit, which do not. Secured cards are easier to get approved for because the deposit protects the issuer if you don't pay. Unsecured cards for poor credit exist but come with higher interest rates and lower credit limits.
The difference matters because a secured card is usually your fastest path to rebuilding credit. You put down a deposit—typically $200 to $2,500—and that becomes your credit limit. You use the card like any other, make payments on time, and after 6 to 18 months of good behavior, the issuer converts it to a regular unsecured card and returns your deposit. An unsecured card for poor credit skips the deposit but charges you more in interest and annual fees, so it costs more to use.
Both types report to the three credit bureaus (Equifax, Experian, and TransUnion), so both help rebuild your score—but only if you pay on time and keep your balance low. Missing a payment or maxing out the card will damage your score further.
Key Takeaways
- Secured cards require a cash deposit but are the easiest to get approved for when your credit is very low, and they convert to regular cards after you prove you can pay on time.
- Unsecured cards for poor credit don't require a deposit but charge higher interest rates and annual fees, making them more expensive to use.
- Both types report to credit bureaus, so either one can help rebuild your score if you pay your full balance on time every month.
- Your credit limit on a secured card equals your deposit, so a $500 deposit gives you a $500 limit—you cannot borrow more than you've put down.
- Avoid cards that require you to pay upfront fees before you even receive the card; legitimate issuers charge fees only after approval.
How secured cards work and why they rebuild credit faster
A secured card is a real credit card backed by your own money. You deposit cash into a savings account held by the card issuer, and that deposit becomes your credit limit. If you deposit $500, you get a $500 limit. You then use the card to make purchases, receive a monthly bill, and pay it like any other card. The issuer holds your deposit the entire time you have the card—you cannot touch it or use it to pay your bill.
The deposit stays frozen even after you've paid off your balance. This protects the issuer: if you stop paying, they keep the deposit to cover what you owe. This is why secured cards approve people with very low scores, late payments, or no credit history at all. The risk to the issuer is minimal.
Secured cards rebuild your credit because the issuer reports every payment to Equifax, Experian, and TransUnion. On-time payments show up on your credit report and gradually raise your score. After 6 to 18 months of perfect or near-perfect payments, the issuer reviews your account and converts it to a standard unsecured card. At that point, your deposit is returned to you in full, and you keep the card with a higher limit.
Unsecured cards for poor credit: higher cost, faster approval
An unsecured card for poor credit works like a regular credit card—no deposit required—but the issuer charges more because they're taking on more risk. These cards typically have annual percentage rates (APRs) between 25% and 36%, compared to 15% to 25% for cards offered to people with good credit. Many also charge annual fees between $25 and $99.
The credit limits are usually low, often $300 to $500, and some issuers charge additional fees for things like late payments or going over your limit. When you add up the APR, annual fee, and potential penalty fees, an unsecured card for poor credit becomes expensive to carry a balance on. If you charge $500 and pay only the minimum each month, you could pay $100 or more in interest and fees before the balance is gone.
These cards do report to the credit bureaus, so they help rebuild your score the same way a secured card does. The trade-off is cost: you pay more in fees and interest to avoid putting down a deposit. A secured card is usually the better choice if you can save up the deposit, because once you convert to an unsecured card, you get your money back and your credit limit often increases.
What you need to know before you explore
Most card issuers will do a hard inquiry on your credit report when you explore, which temporarily lowers your score by a few points. If you explore to multiple cards in a short time, each inquiry adds up and can hurt your score more. Space out your applications by at least a few weeks if you're considering more than one card.
Read the terms carefully before you submit an process. Look for the APR, annual fee, and any other fees the issuer charges. Some cards charge fees for things you might not expect—late payments, going over your limit, or even paying by phone. Avoid any card that asks you to pay a fee upfront before you receive the card; legitimate issuers charge fees only after you've been approved and the account is open.
If you're explore for a secured card, confirm that the issuer will convert it to an unsecured card after a set period. Not all secured cards convert automatically; some require you to request the conversion. Also check whether the issuer will return your deposit as a lump sum or explore it to your account balance. Most return it as a refund, but a few explore it as a credit, which means you'll have to spend it down before you can access it.
How to use a card to rebuild credit without going backward
The goal of getting a card when your credit is very low is to prove you can pay on time and manage debt responsibly. This means using the card differently than you might use a regular card. Charge small amounts—groceries, gas, a subscription—and pay the full balance every month. Do not carry a balance to build credit; that is a myth. Carrying a balance costs you money in interest and does not help your score more than paying in full does.
Keep your balance below 30% of your credit limit, even if you pay it off every month. If your limit is $500, try not to charge more than $150 at a time. Credit bureaus look at your balance relative to your limit (called your utilization ratio), and a low ratio signals that you're not desperate for credit. A high ratio signals risk, even if you pay on time.
Set up automatic payments for at least the minimum due, and pay the full balance if you can. Missing even one payment will damage your score and may trigger penalty fees. If you're worried about forgetting, most issuers let you set up automatic full-balance payments through their website or app. This removes the risk of a late payment.
Red flags and cards to avoid
Some companies prey on people with poor credit by charging high upfront fees or making false promises. Avoid any card that asks you to pay a fee before you receive it, or that guarantees approval without checking your credit. Legitimate card issuers always check your credit and never charge fees upfront.
Be wary of cards that advertise "when ready approval" or "no credit check." A real credit card issuer will always review your credit history and income. If a company claims they won't, they're either lying or they're not actually issuing a credit card—they might be selling a prepaid card, which is not the same thing and does not help rebuild credit.
Prepaid cards look like credit cards but work differently: you load money onto them upfront, and you can only spend what you've loaded. They do not report to credit bureaus, so they do not help rebuild your credit at all. If rebuilding credit is your goal, avoid prepaid cards entirely.
Frequently Asked Questions
How long does it take to rebuild credit with a secured card?
Most people see a noticeable improvement in their score within 3 to 6 months of on-time payments. A secured card typically converts to an unsecured card after 6 to 18 months, depending on the issuer. Your score will continue to improve as long as you keep paying on time and keep your balance low.
Can I get a regular credit card if my score is below 500?
Very few issuers offer unsecured cards to people with scores below 500. A secured card is your most realistic option. Some issuers of unsecured cards for poor credit will work with scores in the 500 to 600 range, but they charge high fees and interest rates. A secured card is usually cheaper and easier to get approved for.
What happens to my deposit if I miss a payment?
The issuer will not automatically take your deposit to cover a missed payment. Instead, you'll owe the payment plus a late fee, and the missed payment will be reported to the credit bureaus. If you continue to miss payments, the issuer may eventually close the account and use your deposit to cover what you owe. After that, you'll have to pay any remaining balance out of pocket.
Do I need to use the card every month to rebuild credit?
You don't need to use it every month, but regular activity helps. If you charge nothing for several months, the issuer may close the account due to inactivity. Charge something small once a month—even a small subscription—and pay it off to keep the account active and reporting to the bureaus.
Can I increase my credit limit on a secured card?
Yes, but usually only by depositing more money. If you deposit an additional $300, your limit increases to $300 (or whatever your new total deposit is). Some issuers will increase your limit without requiring more money after you've had the card for a year or more and made all payments on time, but this is not may provide. Check with your issuer about their policy.