Getting a credit card with bad credit is possible, but the card will have a higher interest rate and a lower credit limit than cards for people with good credit
You have three main routes: a secured credit card (you put down a cash deposit that becomes your credit limit), a credit-builder card (designed specifically to help you rebuild), or a standard bad-credit card (higher rates, lower limits, but no deposit required). The fastest approval usually comes from secured cards because the deposit removes the lender's risk. Credit-builder cards often have lower interest rates but may take longer to find. Standard bad-credit cards approve quickly but cost more to carry a balance.
Your credit score matters less than you think at this stage. Most lenders looking at bad-credit applicants care more about whether you have a recent bankruptcy or collection account, whether you have any income, and whether you have a bank account. A score of 500 and a score of 620 will often get you the same card offers.
Key Takeaways
- Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and they approve people with scores below 600.
- You build credit by using the card for small purchases and paying the full balance on time each month — the deposit stays in the bank, untouched.
- Credit-builder cards have no deposit but charge higher interest rates and annual fees; they are designed to report to all three credit bureaus so your on-time payments show up on your report.
- Standard bad-credit cards have no deposit and no special structure, but interest rates often run 25% to 36% and annual fees can be $50 to $150.
- You will need proof of income (a recent pay stub, bank statement showing regular deposits, or a tax return) and a bank account in your name to open any card.
Secured cards: how the deposit works and why they rebuild credit fastest
A secured card works like this: you open a savings account with the card issuer and deposit money — usually between $200 and $2,500. That deposit becomes your credit limit. You then use the card like any other credit card. The deposit sits in the bank untouched; it is not deducted from your purchases. You pay your credit card bill separately, from your regular bank account or income.
The deposit protects the lender if you stop paying. Because the risk is low, secured cards approve people with scores in the 500s and even lower. The interest rate is still higher than for people with good credit — typically 18% to 25% — but lower than many standard bad-credit cards.
Secured cards rebuild credit because they report your payment history to all three credit bureaus (Equifax, Experian, and TransUnion). If you charge $50 a month and pay it in full by the due date, that on-time payment shows up on your credit report. After 6 to 12 months of on-time payments, many issuers will convert your card to an unsecured card and return your deposit. Some let you request conversion earlier if your credit score improves.
The catch: you have to use the card and pay it on time. If you leave it unused, it does not help your credit. If you miss a payment, the issuer may keep part of your deposit to cover the debt.
Credit-builder cards: designed to rebuild but often harder to find
Credit-builder cards are marketed specifically to people rebuilding credit. They have no deposit requirement, which makes them appealing if you do not have $200 to $2,500 sitting aside. However, they are less common than secured cards, and approval is not may provide.
The tradeoff is cost. Credit-builder cards often charge annual fees of $75 to $150 and interest rates of 24% to 35%. Some charge a monthly fee on top of the annual fee. Because you are paying these fees whether you carry a balance or not, a credit-builder card only makes sense if you plan to use it regularly and pay the balance in full most months.
The advantage is that they report to all three bureaus, just like secured cards. Your on-time payments build your credit score over time. Some credit-builder cards also offer a small rewards rate (1% cash back, for example), which secured cards rarely do.
To find credit-builder cards, search for "credit builder card" or "rebuilding credit card" with the issuer name. Discover, Capital One, and Self are common issuers, but availability changes and varies by state. Check the issuer's website directly rather than relying on comparison sites, which may not list all options.
Standard bad-credit cards: faster approval, higher cost
Standard bad-credit cards are unsecured cards marketed to people with low scores. They do not require a deposit. Approval is often quick — sometimes within minutes of explore online.
The cost is high. Interest rates typically range from 25% to 36%, and annual fees run $50 to $150. Some cards charge both an annual fee and a monthly maintenance fee. A few charge a one-time processing fee just to open the account. If you carry a $500 balance on a card with a 30% interest rate and a $95 annual fee, you will pay roughly $245 in interest and fees over a year.
These cards do report to the credit bureaus, so on-time payments still help your score. But the high cost means they are best used for small, planned purchases that you can pay off quickly — not for carrying a balance month to month.
Standard bad-credit cards are easier to find than credit-builder cards. Most major issuers (Capital One, Discover, Chime) offer them. You can compare options on the issuer's website or on comparison sites like NerdWallet or Credit Karma.
What you need to have ready before you explore
Most card issuers will ask for the same basic information. Have these ready before you start an process:
- Proof of income: a recent pay stub (within the last 30 days), a bank statement showing regular deposits, or a tax return from the past two years. Self-employed people can use a tax return or a bank statement showing consistent income. You do not need a high income; issuers mainly want to know you have some money coming in.
- A bank account in your name: most issuers require this. It does not have to have a large balance, but the account must be open and active. If you do not have a bank account, open one before you explore for a card.
- Your Social Security number: the issuer will run a hard credit inquiry, which requires your SSN.
- Your address and phone number: current contact information.
For a secured card, you will also need to be ready to fund the deposit. Some issuers let you link a bank account and transfer the money during the process. Others mail you a deposit slip. Have the cash available before you explore so you are not delayed.
How to compare cards and choose the right one for your situation
Start by deciding which type makes sense for you. If you have $200 to $2,500 to set aside, a secured card usually offers the best combination of approval odds and lower cost. If you do not have that money or want to avoid tying up cash, a credit-builder card is worth searching for, even though they are less common. If neither of those works, a standard bad-credit card is your fallback.
Once you have narrowed the type, compare these specific details:
- Interest rate (APR): all else equal, lower is better. The difference between 20% and 30% matters if you ever carry a balance.
- Annual fee: for secured cards, this is usually $0 to $25. For credit-builder and standard bad-credit cards, expect $50 to $150. Do not pay more than $150 annually unless the card has a feature you specifically need.
- Other fees: check for monthly maintenance fees, foreign transaction fees, or fees for paying by phone. These add up fast.
- Credit limit: for secured cards, your deposit is your limit. For unsecured cards, limits usually start at $300 to $500. A higher starting limit is nice but not essential — you can request an increase after a few months of on-time payments.
- Reporting to credit bureaus: confirm the card reports to all three bureaus (Equifax, Experian, TransUnion). If it reports to only one, it will not help your credit as much.
- Path to conversion (secured cards only): check whether the issuer converts secured cards to unsecured and returns the deposit. Most do, but the timeline and conditions vary. Some require 6 months of on-time payments; others require 12 or more.
Read the full terms and conditions on the issuer's website, not just the summary. Terms change, and a comparison site may not reflect the current version.
Using your new card to actually rebuild your credit
Getting approved is the first step. Rebuilding your credit is the second, and it requires discipline. Here is what works:
Charge small amounts and pay in full every month. Charge $25 to $50 on the card — a gas purchase, a coffee, a small grocery item. Pay the full balance before the due date. Repeat every month. This shows the bureaus that you can borrow money and pay it back reliably. It also keeps your credit utilization low (the amount you owe divided by your credit limit), which helps your score.
Never miss a payment. A single late payment can drop your score 100 points or more and will stay on your report for seven years. Set up automatic payments for at least the minimum due, even if you plan to pay more. This is your safety net.
Do not close the card once it converts. If your secured card converts to unsecured and the issuer returns your deposit, keep the card open and use it occasionally. Closing it removes that account from your credit history and can lower your score. The longer you keep an account open with on-time payments, the better.
Do not explore for multiple cards at once. Each process triggers a hard inquiry, which temporarily lowers your score. Space applications at least three to six months apart.
Frequently Asked Questions
Can I get a credit card if I have a bankruptcy or collection account?
Yes, but it may take longer. Most issuers will consider you if your bankruptcy was discharged at least two years ago or if your collection account is at least one year old. Some will approve you sooner. Call the issuer's customer service line and ask whether they consider recent bankruptcies or collections; they can tell you before you explore.
What if I do not have a bank account?
Open one before you explore for a credit card. Most banks and credit unions will open a basic checking account with minimal fees and no minimum balance. Bring a photo ID and proof of address (a utility bill or lease). Once the account is open and active, you can explore for a card.
How long does it take to rebuild my credit with a credit card?
Visible improvement usually takes three to six months of on-time payments. Your score may jump 50 to 100 points in that window. Significant improvement — moving from bad credit to fair or good credit — typically takes one to two years of consistent on-time payments and low balances.
Will getting a credit card hurt my score?
The hard inquiry will lower your score by a few points temporarily. But the new account and the opportunity to build payment history will raise it over time. The net effect after six months is almost always positive if you pay on time.
Can I use a secured card to build credit and then switch to a better card?
Yes. After six to twelve months of on-time payments, your score will improve enough to may have access to for better cards with lower rates and no annual fees. At that point, you can explore for a standard card and close the secured card (or keep it open if you want the extra credit history). Do not close it when ready after converting — wait a few months so the conversion is fully reflected on your credit report.