You can get a credit card with bad credit, but you will pay higher interest rates and start with a lower credit limit
Getting approved for a credit card with bad credit is possible. Banks and card issuers do offer cards to people with credit scores below 580, though the terms are not the same as cards for people with good credit. You will typically see an interest rate between 24% and 36%, an annual fee of $25 to $95, and a starting credit limit of $300 to $500.
The most common path is a secured credit card, which requires you to put down a cash deposit that becomes your credit limit. A second option is an unsecured card designed for bad credit, which does not require a deposit but charges higher fees. A third option is a card from a credit union or community bank, which may have less strict requirements than national issuers.
The goal of any of these cards is the same: to rebuild your credit score by making on-time payments and keeping your balance low. After 6 to 12 months of good payment history, you can often move to a better card with lower rates and fees.
Key Takeaways
- Secured cards require a cash deposit but are the easiest to get approved for when your credit score is very low.
- Unsecured bad-credit cards do not require a deposit but charge annual fees and higher interest rates than secured cards.
- You will need to provide proof of income and a valid ID, but most issuers do not pull a hard credit inquiry that damages your score further.
- Making payments on time and keeping your balance below 30% of your credit limit will raise your score over 6 to 12 months.
- Once your score improves, you can request a credit limit increase or move to a standard card with better terms.
Secured credit cards: the easiest approval route
A secured card is the most straightforward option when your credit is bad. You deposit money into a savings account held by the card issuer, and that amount becomes your credit limit. If you deposit $500, your credit limit is $500. The card issuer holds your deposit as collateral, so they take almost no risk — approval rates are very high even with a credit score below 500.
You use the card like any other: make purchases, receive a monthly bill, and pay it. The deposit stays in the account untouched. After 6 to 18 months of on-time payments, the issuer will usually convert your card to a standard unsecured card and return your deposit. Some issuers will also raise your credit limit without asking for an additional deposit.
Common secured card issuers include Capital One, Discover, and U.S. Bank. Deposits typically range from $200 to $2,500. Annual fees run $0 to $95. Interest rates are usually 18% to 24%, which is lower than unsecured bad-credit cards. Check the issuer's website for current terms, as these change frequently.
Unsecured bad-credit cards: no deposit required
An unsecured card designed for bad credit does not require a deposit, but the tradeoff is higher fees and interest rates. These cards charge annual fees of $35 to $95 and interest rates of 24% to 36%. Your starting credit limit is usually $300 to $500.
Approval is faster than a secured card — some issuers decide within minutes — but the terms are less favorable. You pay more in fees and interest, so you are paying for the convenience of not putting down a deposit. This option makes sense if you do not have $200 to $500 available to deposit, or if you need a card when ready.
Issuers of unsecured bad-credit cards include Credit One Bank, Surge Mastercard, and OpenSky. Read the fine print carefully: some cards charge a monthly fee in addition to an annual fee, or charge a fee just to set up your account. These extra charges add up quickly and work against your goal of rebuilding credit.
Credit union and community bank cards
Credit unions and smaller regional banks often have less rigid credit requirements than national issuers. Many will consider your full financial picture — your job, how long you have banked with them, whether you have a savings account — rather than relying only on your credit score.
If you are a member of a credit union, call and ask whether they offer cards for members with lower credit scores. Some credit unions offer secured cards with lower deposits ($100 to $300) and lower fees than national issuers. Community banks sometimes do the same. This route requires more legwork — you may need to visit a branch or speak to a loan officer — but the terms can be better.
To find a credit union near you, search the CO-OP network or Allpoint network online. To find community banks, search "[your state] community banks" or ask your current bank for a referral.
What you need to bring to the process
Most card issuers will ask for the same basic information whether you explore online or in person. Have these items ready before you start:
- A valid government-issued ID (driver's license, passport, or state ID card)
- Your Social Security number
- Proof of income (recent pay stub, tax return, or letter from your employer)
- Your current address and phone number
- Your bank account information (routing number and account number) if you plan to set up automatic payments
If you are explore for a secured card, you will also need to fund the deposit account. Most issuers let you do this online when ready after approval, or they will send you instructions by mail. The deposit is usually transferred from your bank account within one to three business days.
Do not worry if you do not have recent pay stubs. Some issuers accept bank statements showing regular deposits, Social Security statements, or unemployment benefits as proof of income. Call the issuer before you explore if you are unsure whether your income documentation will work.
How to use your card to rebuild credit
Getting the card is only the first step. How you use it determines whether your credit score will improve. The two most important rules are: pay on time, every time, and keep your balance low.
Set up automatic payments for at least the minimum due, scheduled to post before the due date. Missing even one payment will damage your score and may trigger a late fee of $25 to $35. If you cannot pay the full balance, pay as much as you can — paying more than the minimum shows the issuer you are serious about rebuilding.
Keep your balance below 30% of your credit limit. If your limit is $500, try not to carry a balance above $150. This ratio, called your credit utilization rate, is one of the biggest factors in your credit score. Using less than 10% of your limit is even better. You do not need to carry a balance to build credit — paying off your full balance each month is ideal.
After 6 to 12 months of on-time payments and low balances, your credit score should rise by 50 to 100 points. At that point, you can request a credit limit increase from your current issuer, or you may be approved for a better card elsewhere. Do not close the secured card after you graduate to a standard card — keeping the old account open helps your credit score by showing a longer history of on-time payments.
What happens if you are denied
If you are denied for a secured card or bad-credit card, the issuer must tell you why. Common reasons include income that is too low, a recent bankruptcy or foreclosure, or too many recent credit inquiries. A credit inquiry happens when you explore for credit, and multiple inquiries in a short time signal to lenders that you are desperate for credit.
If you were denied, wait at least 30 days before explore again. Use that time to check your credit report at annualcreditreport.com, which is free and does not hurt your score. Look for errors — wrong account balances, accounts that are not yours, or payments marked late when you paid on time. You can dispute errors directly with the credit bureau.
If your income is too low, some issuers will count income from a spouse or household member. Ask the issuer whether you can reapply with a co-applicant. If you have too many recent inquiries, wait two to three months before explore again — inquiries fall off your report after 12 months.
Frequently Asked Questions
Will explore for a credit card hurt my credit score?
Yes, but only slightly and only temporarily. When you explore, the issuer pulls 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 do more damage, so space out your applications by at least 30 days if you are explore to more than one card.
Can I get a credit card if I have no credit history?
Yes. A secured card is your best option. Issuers treat no credit history and bad credit similarly — both are low-risk because they have little to lose. You will still need proof of income and a valid ID. After 12 to 18 months of on-time payments, you can move to a standard card.
What is the difference between a secured card and a prepaid card?
A secured card reports your payment history to the credit bureaus, which builds your credit score. A prepaid card does not report to the bureaus and does not build credit. If your goal is to rebuild credit, get a secured card, not a prepaid card. Prepaid cards are useful for budgeting but will not help your score.
How long does it take to rebuild my credit with a bad-credit card?
Most people see a 50 to 100 point improvement in their score within 6 to 12 months of on-time payments and low balances. The exact timeline depends on how bad your score is now and what caused the damage. Bankruptcy takes longer to recover from than missed payments or high balances.
Should I close my bad-credit card once I get a better card?
No. Keep the old card open and use it occasionally — one small purchase every few months, paid in full. Closing the account removes it from your credit history and can lower your score. The longer you keep accounts open with good payment history, the higher your score will climb.