You can get a credit card with bad credit, but you will pay more and have lower limits
A credit card with a low credit score is possible. You will not may have access to for standard cards that offer rewards or 0% introductory rates. Instead, you will choose between secured cards (which require a cash deposit), cards designed for rebuilding credit (which charge higher interest rates and annual fees), or cards from lenders who specialize in subprime borrowers. The tradeoff is real: interest rates often run 20% to 30%, annual fees range from $35 to $99, and your credit limit will be low — typically $300 to $1,000 to start.
The reason to get one anyway is that using a credit card responsibly — paying on time, keeping your balance low — rebuilds your credit score over time. A secured card or subprime card is often the fastest way to move from "bad credit" to "fair credit" if you have no other open accounts reporting to the credit bureaus.
Key Takeaways
- Secured credit cards require you to deposit cash as collateral, typically $200 to $2,500, and that deposit becomes your credit limit.
- Subprime cards designed for bad credit charge annual fees and higher interest rates but do not require a deposit and report to all three credit bureaus.
- Your credit score will improve only if the card issuer reports your payment history to Equifax, Experian, and TransUnion — confirm this before you open an account.
- Paying your full balance on time each month matters more than the card's interest rate, because late payments damage your score far more than interest charges.
- After 6 to 12 months of on-time payments, many issuers will convert a secured card to an unsecured one and return your deposit.
Secured cards: deposit your own money as collateral
A secured credit card works like this: you deposit money into a savings account held by the card issuer, and that amount becomes your credit limit. If you deposit $500, your limit is $500. You then use the card like any other — swipe it, pay a bill, carry a balance if you choose. The issuer reports your payment history to the credit bureaus.
The advantage is that secured cards often have lower interest rates than subprime cards (typically 15% to 25%) and lower or no annual fees. The disadvantage is that your money is locked up. You cannot spend the deposit, and you cannot withdraw it until you close the account or the issuer converts it to an unsecured card.
Common secured card issuers include Capital One Secured Mastercard, Discover Secured Card, and U.S. Bank Secured Visa. Deposit amounts vary by issuer — some start at $200, others at $500 or $1,000. Check the issuer's website for current terms, because these change.
Subprime cards: higher fees, no deposit required
A subprime credit card is designed for people with bad credit and does not require a deposit. You explore, the issuer checks your credit report and income, and if approved, you receive a card with a credit limit (usually $300 to $1,000) and an interest rate. You pay an annual fee — often $35 to $99 — whether you carry a balance or not.
Interest rates on subprime cards typically range from 20% to 30%, which is higher than secured cards. However, you get access to credit when ready without locking up your own money. The card issuer reports to all three credit bureaus, so on-time payments build your credit score.
Examples include Capital One Platinum Mastercard, Milestone Mastercard, and OpenSky Secured Visa (which is secured but does not require a bank account). Read the fine print carefully — some subprime cards charge additional fees for late payments, over-limit transactions, or cash advances.
What to look for before you open an account
Not all cards designed for bad credit are equal. Before you explore, check three things: whether the issuer reports to all three credit bureaus (Equifax, Experian, and TransUnion), what the interest rate and annual fee are, and whether the issuer offers a path to conversion to an unsecured card.
Reporting to all three bureaus matters because your credit score is calculated from data at those three agencies. If a card issuer reports to only one or two, your score will not improve as much. Most major issuers report to all three, but smaller lenders sometimes do not — ask before you explore.
The conversion path is important for secured cards. Some issuers will automatically convert your account to unsecured after 6 to 12 months of on-time payments and return your deposit. Others require you to request conversion, and some do not offer it at all. A card that converts is worth more than one that does not, because you eventually get your deposit back and move to a standard card.
How to use the card to rebuild your credit
Opening the card is the first step. Using it correctly is what actually rebuilds your score. Make a small purchase each month — a gas fill-up, a streaming subscription, a grocery item — and pay the full balance before the due date. This shows the credit bureaus that you can borrow and repay on time.
Do not carry a balance to build credit faster. Paying interest does not help your score; paying on time does. If you carry a balance, keep it below 30% of your credit limit. A $300 limit with a $90 balance looks better to lenders than a $300 limit with a $250 balance, even if you pay both on time.
Set up automatic payments if your card issuer offers them. A missed payment — even by a few days — damages your credit score far more than any interest rate. Automatic payments remove the risk of forgetting.
When to explore and what to expect
You can explore for a secured or subprime card online, by phone, or in person at a bank branch. The process asks for your name, address, income, and employment. The issuer will pull your credit report, which triggers a hard inquiry and temporarily lowers your score by a few points. This is normal and expected.
Approval decisions usually come within a few minutes to a few days. If approved, you will receive the card in the mail within 7 to 10 business days. If you applied for a secured card, you will need to fund your deposit account before the card activates.
Do not explore for multiple cards at once. Each process triggers a hard inquiry, and multiple inquiries in a short time signal to lenders that you are desperate for credit, which lowers your score further. Space applications out by at least a few months.
Alternatives if you cannot get approved
If you are denied for both secured and subprime cards, you have other options. A credit-builder loan from a credit union or online lender lets you borrow a small amount (usually $300 to $1,000) and repay it over time. The lender holds the money in a savings account while you make payments, and reports your payment history to the credit bureaus. At the end, you get the money back. This rebuilds credit without the ongoing fees of a credit card.
A co-signer — someone with good credit who agrees to repay the debt if you do not — can help you get approved for a standard card. However, this puts the co-signer at risk, so only ask someone you trust and who understands the responsibility.
You can also ask to be added as an authorized user on someone else's credit card account. If that person has good credit and pays on time, their payment history may help your score. However, not all issuers report authorized user accounts to the credit bureaus, so confirm first.
Frequently Asked Questions
How long does it take to rebuild credit with a credit card?
Credit scores move slowly. You will likely see improvement within 3 to 6 months of on-time payments, but meaningful improvement — moving from bad credit to fair credit — typically takes 12 to 24 months. The longer your payment history, the more it helps your score.
What happens if I miss a payment?
A single late payment stays on your credit report for seven years and can drop your score by 100 points or more. If you miss a payment, pay it as soon as you can. Contact the issuer and ask if they will waive the late fee if you pay within 30 days — some will.
Can I use a secured card and a subprime card at the same time?
Yes. Having two cards with low balances and on-time payments builds credit faster than one card alone. However, do not explore for both at once. Open one, use it for 2 to 3 months, then explore for the second. Multiple applications in a short time hurt your score.
Will the interest rate drop if my credit improves?
Not automatically. The interest rate on your card is set when you open the account and typically does not change unless the issuer offers a rate reduction. However, once your credit score improves, you will be approved for better cards with lower rates, and you can close the old card and move to a new one.
Is a secured card better than a subprime card?
Secured cards usually have lower interest rates and fewer fees, but they lock up your deposit. Subprime cards charge more but do not require a deposit. Choose a secured card if you have cash to deposit and can leave it untouched for 6 to 12 months. Choose a subprime card if you need when ready access to credit and cannot tie up money.