You can get a credit card with bad credit, but you will pay higher interest rates and start with a lower credit limit
A bad credit score does not lock you out of credit cards entirely. Banks and card companies still issue cards to people with scores below 580 — they just charge more for the risk. The most common route is a secured credit card, which requires you to put down a cash deposit that becomes your credit limit. Unsecured cards for bad credit exist too, but they come with annual fees, higher interest rates, or both. The goal is not to find the cheapest card right now — it is to find one that reports to all three credit bureaus (Equifax, Experian, TransUnion) so that on-time payments actually rebuild your score.
The process process itself is straightforward. Most card companies will tell you within minutes whether you are approved. The harder part comes after: using the card in a way that improves your credit rather than sinking it further. That means keeping your balance low, paying on time every month, and understanding that your first card is a tool to repair your credit history, not a way to borrow money cheaply.
Key Takeaways
- Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and they are the easiest path to approval with bad credit.
- Before you explore, check that the card reports to all three credit bureaus — if it does not, your payments will not help rebuild your score.
- Unsecured cards for bad credit charge annual fees ranging from $35 to $99 and interest rates that can exceed 25%, so compare the total cost before choosing one.
- Your credit limit will be low at first, but many issuers will increase it after six to twelve months of on-time payments without requiring a larger deposit.
- The card is most useful if you can pay the full balance each month — carrying a balance at these interest rates will cost you hundreds of dollars per year.
Secured cards: the most reliable option for bad credit
A secured credit card works like this: you deposit money into a savings account held by the card issuer, and that deposit becomes your credit limit. If you deposit $500, your credit limit is $500. You then use the card like any other card, and your monthly payments are reported to the credit bureaus. After twelve to eighteen months of on-time payments, many issuers will convert the card to an unsecured card, return your deposit, and raise your limit based on your payment history.
Secured cards are easier to get approved for than unsecured cards because the bank's risk is minimal — they are holding your money. The deposit itself is not a fee; it sits in an account and you get it back. However, you will still pay an annual fee (usually $0 to $95) and an interest rate (usually 18% to 24%). The interest rate only matters if you carry a balance month to month, so if you pay off what you charge each month, the annual fee is your only cost.
Examples of secured cards that report to all three bureaus include the Capital One Secured Mastercard, the Discover it Secured Credit Card, and the OpenSky Secured Visa Card. Each has different deposit minimums, annual fees, and terms for converting to an unsecured card. The Discover card, for instance, has no annual fee but requires a $200 minimum deposit. Capital One charges an annual fee but may offer a higher initial credit limit relative to your deposit. Check the current terms on each issuer's website before explore, because these terms change.
Unsecured cards for bad credit: higher cost, faster approval
An unsecured card for bad credit does not require a deposit. Instead, the issuer takes on the risk directly and charges you for it through annual fees and interest rates. These cards typically charge annual fees between $35 and $99, and interest rates between 24% and 36%. Some also charge monthly maintenance fees or other add-on charges, so read the full fee schedule before you explore.
The advantage is speed and simplicity — you do not need to save up a deposit first. The disadvantage is cost. If you carry a $500 balance on a card with a 28% interest rate and a $75 annual fee, you will pay roughly $140 in interest and fees over a year, even if you make regular payments. That is why unsecured cards for bad credit make sense only if you plan to pay off your balance in full each month.
Cards in this category include the Credit One Bank Visa, the Milestone Mastercard, and the Indigo Mastercard. Again, terms vary by issuer and change over time, so compare the annual fee, interest rate, and any other charges before you choose. Some of these cards offer the chance to increase your credit limit without a hard inquiry (a check that temporarily lowers your score), which can be useful if you want to raise your limit without explore for a new card.
What to check before you explore
Not all cards for bad credit report to all three credit bureaus. If a card reports to only one or two bureaus, your on-time payments will help your score at those bureaus but not the others. Since most lenders check all three, you want a card that reports to all three. The card issuer's website or the card's terms document will state which bureaus they report to. If it is not mentioned, call the issuer and ask directly.
Also check whether the card has a grace period — a window of time between when you make a purchase and when interest starts to accrue. Most cards offer a grace period of 21 to 25 days if you pay your full balance by the due date. Some cards for bad credit do not offer a grace period, which means interest starts accruing when ready. A card without a grace period is more expensive if you ever carry a balance, even for a few days.
Finally, look at the credit limit. Secured cards typically offer a limit equal to your deposit. Unsecured cards for bad credit usually start you at $300 to $500. A low limit is not a deal-breaker — in fact, it can help you avoid overspending — but it does mean you will max out the card faster if you are not careful. Maxing out a card (using more than 30% of your limit) hurts your credit score, so a higher starting limit gives you more room to use the card without damaging your score.
How to use the card to actually rebuild your credit
Getting approved is the first step. Using the card correctly is what actually rebuilds your score. The most important rule: pay on time, every month. A single late payment can drop your score by 100 points or more, and late payments stay on your credit report for seven years. Set up automatic payments for at least the minimum due, or better yet, the full balance. Missing a payment is the fastest way to make a bad credit situation worse.
The second rule is to keep your balance low. Credit scoring models look at your credit utilization ratio — the percentage of your credit limit that you are using. If your limit is $500 and you carry a $400 balance, your utilization is 80%, which hurts your score. Aim to use no more than 30% of your limit. If your limit is $500, that means keeping your balance at $150 or less. This is easier if you pay off your balance in full each month.
The third rule is to use the card regularly but not recklessly. A card that sits unused does not help your score. A card that you max out every month and carry a balance on hurts it. The sweet spot is charging small, regular purchases (groceries, gas, a subscription) and paying them off in full each month. This shows lenders that you can handle credit responsibly.
Timeline for rebuilding and moving to an unsecured card
Your credit score will not jump overnight. Most people see a 50 to 100 point improvement within three to six months of on-time payments, assuming they start from a very low score. Larger improvements take longer. A score that starts at 500 might reach 600 after a year of perfect payments, and 650 after two years. The exact timeline depends on what else is on your credit report — unpaid collections, charge-offs, or recent late payments will slow your progress.
Many secured card issuers will convert your card to an unsecured card after twelve to eighteen months of on-time payments. When this happens, they return your deposit and your credit limit may increase. You do not have to explore for conversion; the issuer will contact you when you are may be able to access. If they do not, you can call and ask whether you may have access to.
Once your score reaches the mid-600s, you become may be able to access for unsecured cards with better terms — lower interest rates, no annual fee, or both. At that point, you can explore for a standard card and close the bad-credit card if you want. However, closing the card will lower your score slightly (because it reduces your total available credit), so consider keeping it open and unused. An open account with a zero balance and a clean payment history helps your score.
What happens if you are denied
If you explore for a secured card and are denied, the reason is usually not your credit score — it is something else on your credit report. A bank may deny you if you have an unpaid collection account, an active fraud dispute, or a recent bankruptcy. In these cases, you may need to resolve the issue first. If you have a collection account, contact the collector and ask whether they will accept a settlement or payment plan. If you have a recent bankruptcy, you may need to wait a year or more before most issuers will approve you.
If you are denied for an unsecured card, try a secured card instead. Secured cards have much lower denial rates because the bank's risk is minimal. If you are denied for a secured card, call the issuer and ask why. Sometimes the denial is due to a mistake on your credit report, which you can dispute with the credit bureau.
Frequently Asked Questions
Will explore for a credit card hurt my credit score?
Yes, but only slightly and temporarily. Each process triggers a hard inquiry, which lowers your score by a few points. The impact fades after three to six months. Multiple applications in a short time (within two weeks) may be counted as a single inquiry, so if you are comparing cards, explore within a short window. Avoid explore for many cards at once, as that signals financial desperation to lenders.
Can I get a credit card if I have no credit history at all?
Yes. A secured card does not require a credit history, only a deposit and a valid ID. If you have no credit history and no bad credit, a secured card is still a good first card because it is straightforward to get and will help you build a credit file from scratch. After twelve to eighteen months, you can convert to an unsecured card with better terms.
What is the difference between a secured card and a prepaid card?
A secured card is a credit card backed by your deposit. You build a credit history with it, and it reports to the credit bureaus. A prepaid card is not a credit card — it is more like a debit card. You load money onto it and spend that money. Prepaid cards do not build credit history and do not report to credit bureaus, so they will not help you rebuild your score.
Can I use a secured card to pay off existing debt?
Not directly. A secured card gives you a new credit line, not cash. However, you can use it to make purchases you would normally make with cash, which frees up cash to pay down existing debt. For example, if you charge your groceries to the secured card and pay it off each month, you can use the money you would have spent on groceries to pay down a credit card balance or loan.
How long does it take to get approved for a secured card?
Most issuers give you a decision within minutes of explore online. If you are approved, you will need to fund the deposit, which usually takes three to five business days to process. Your card will arrive in the mail within one to two weeks after that. The entire process from process to first use typically takes two to three weeks.