What credit cards are actually available at a 500 credit score
At a 500 credit score, you will not be approved for standard credit cards from major banks. Instead, you have two real paths: secured credit cards that require a cash deposit, and cards designed for people rebuilding credit that come with higher fees and interest rates. A few cards exist in the second category, but secured cards are more common and usually cheaper to use over time.
The deposit on a secured card becomes your credit limit — you put down $200 to $2,500, and that money sits in a bank account while you use the card. You are not borrowing the deposit; it is collateral. The card issuer reports your payments to the three credit bureaus (Equifax, Experian, TransUnion), and after 6 to 18 months of on-time payments, many issuers will convert the card to a standard card and return your deposit.
Unsecured cards for poor credit exist but are rare. They typically charge annual fees between $75 and $150, interest rates above 20%, and sometimes require a deposit anyway. The math usually favors a secured card unless you have a specific reason to avoid putting down a deposit.
Key Takeaways
- Secured credit cards require a cash deposit that becomes your credit limit, and most return the deposit after 6 to 18 months of on-time payments.
- Interest rates on both secured and unsecured cards for a 500 score typically range from 18% to 25%, so carrying a balance is expensive.
- Annual fees on unsecured cards for poor credit often exceed $100, while many secured cards have no annual fee or charge $25 to $50.
- Your payment history is what rebuilds your score, so a card you actually use and pay on time matters more than the card's features.
How secured cards work and what they cost
When you open a secured card, you deposit money into a savings account held by the card issuer. That deposit is frozen — you cannot withdraw it while the account is open. Your credit limit equals your deposit amount. If you deposit $500, your limit is $500. You then use the card like any other card: make purchases, receive a statement, and pay a bill each month.
The card issuer reports your account activity to all three credit bureaus. On-time payments build your score. Late payments damage it, just as they would with any card. After a period of consistent on-time payments — usually 6 to 18 months — the issuer reviews your account. If your payment history is clean, they convert the card to a standard card, return your deposit, and you keep the account open with a new unsecured credit limit.
Costs vary by issuer. Some secured cards charge no annual fee. Others charge $25 to $50 per year. Interest rates typically fall between 18% and 25%. If you pay your full balance each month, the interest rate does not matter. If you carry a balance, you will pay interest on top of your principal.
Unsecured cards for poor credit: when they make sense
A handful of card issuers offer unsecured cards to people with scores around 500. These cards do not require a deposit. However, they charge annual fees of $75 to $150 and interest rates of 20% to 29%. Some also charge monthly fees or require a deposit anyway, which defeats the purpose of calling them "unsecured."
An unsecured card makes sense only if you cannot afford to put down a deposit and you need a card when ready. Even then, the high fees mean you should plan to convert to a secured card or a better option within a year. If you can save $300 to $500 for a deposit, a secured card is almost always the better choice.
Before explore for an unsecured card, check whether the issuer reports to all three credit bureaus. Some smaller issuers report to only one or two, which slows your score recovery. Ask the issuer directly or read the terms and conditions.
Building credit with a card at a 500 score
Your goal with any card at this score is not to use credit — it is to prove you can handle it. This means using the card for small, regular purchases and paying the full balance every month. Charge $20 to $50 per month on groceries or gas, then pay it off in full when the statement arrives. This creates a payment history without interest charges.
Do not max out your card. Credit utilization — the percentage of your limit you are using — affects your score. Using more than 30% of your limit hurts your score, even if you pay on time. With a $500 limit, keep your balance below $150 at any point in the month.
Set up automatic payments if the issuer offers them. Missing even one payment will set back your score recovery by months. An automatic payment for the full balance removes the risk of forgetting.
Comparing secured cards available to a 500 score
| Card Feature | Typical Range | What This Means for You |
|---|---|---|
| Minimum deposit | $200 to $2,500 | Start with what you can afford; your deposit becomes your limit. |
| Annual fee | $0 to $50 | Some cards charge nothing; others charge a small fee. Factor this into your choice. |
| Interest rate (APR) | 18% to 25% | Only matters if you carry a balance. Paying in full each month avoids interest entirely. |
| Conversion timeline | 6 to 18 months | After consistent on-time payments, the issuer converts to unsecured and returns your deposit. |
| Credit bureau reporting | All three bureaus | Confirm the issuer reports to Equifax, Experian, and TransUnion before opening the account. |
What happens after you rebuild your score
Once your score climbs above 620 to 650, you become may be able to access for standard credit cards from major banks. These cards have lower interest rates, no annual fees, and sometimes offer rewards like cash back or travel points. Your goal is to reach that threshold within 18 to 24 months.
When you are ready to move on from your secured card, do not close it when ready after converting to unsecured. Closing an old account lowers your average account age and reduces your total available credit, both of which hurt your score. Keep the account open and use it occasionally — a small purchase every few months is enough.
If you have multiple secured cards, convert them one at a time as your score improves. This spreads out the benefit of having older accounts and keeps your credit mix stable.
Common mistakes to avoid with a 500 credit score
The biggest mistake is 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. One secured card is enough to rebuild; you do not need two or three.
Another mistake is using the card to carry a balance you cannot pay off. At 20% interest, a $500 balance costs you $100 per year in interest alone. Use the card only for purchases you can pay off in full each month.
Do not confuse a secured card with a prepaid card. A prepaid card is not a credit card — it does not report to credit bureaus and does not build your score. Make sure any card you open is marketed as a credit card that reports to all three bureaus.
Frequently Asked Questions
Will getting a secured card hurt my credit score?
The process itself will cause a small, temporary drop due to a hard inquiry. However, opening the account and using it responsibly will raise your score over time. The long-term benefit outweighs the short-term dip.
Can I get my deposit back before the card converts to unsecured?
No. The deposit must remain frozen for the duration of the account. If you need the money, you will have to close the card, which ends the account and stops the credit-building process. Keep your deposit as money you do not need for at least 12 months.
What if I miss a payment on a secured card?
A missed payment will be reported to all three credit bureaus and will damage your score significantly. It may also trigger late fees and a higher interest rate. If you miss a payment, contact the issuer when ready to bring the account current and ask about hardship options.
Do I need a secured card if I have a 500 score, or are there other options?
A secured card is the most reliable path, but you could also become an authorized user on someone else's account with good payment history, or look into a credit-builder loan from a credit union. Both can help, but a secured card gives you direct control over the account.
How long does it take to go from a 500 score to 650?
This varies based on what caused your low score and how you use the card. If you have recent late payments or high debt, recovery takes longer. With on-time payments and low utilization, many people see a 50 to 100 point increase within 12 to 18 months.