Yes, you can get a credit card with bad credit, but your options are limited and the terms will be less favorable than cards for people with good credit
Banks and card issuers do lend to people with poor credit histories. They do this because they can charge higher interest rates and require a cash deposit upfront to reduce their risk. The catch is that you will pay more in interest, have a lower spending limit, and face annual fees that cards for good credit do not charge. The real question is not whether you can get approved, but whether the card you find will actually help you rebuild credit instead of trapping you in debt.
Your approval odds depend on what caused your bad credit. A single missed payment from five years ago is easier to overcome than an active collection account or a bankruptcy from last year. Card issuers pull your credit report and score, but they also look at your current income and whether you have any open accounts in good standing right now. If you have been unemployed or have no active accounts, approval becomes harder even if your old debts are paid off.
Key Takeaways
- Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and they report to all three credit bureaus to help rebuild your score.
- Unsecured cards for bad credit exist but charge annual fees of $25 to $100 and interest rates of 20% to 36%, making them expensive unless you pay the full balance monthly.
- Your credit score, current income, and whether you have any accounts in good standing right now all affect whether you will be approved.
- Approval typically takes three to seven business days, and the card issuer will tell you the decision by phone, email, or mail.
- Using a new card responsibly — paying on time and keeping your balance low — can raise your score by 50 to 100 points within six months.
Secured credit cards: the most common path for bad credit
A secured credit card requires you to put down a cash deposit with the card issuer. That deposit becomes your credit limit. If you deposit $500, you get a $500 limit. You then use the card like any other card, and the issuer reports your payments to Equifax, Experian, and TransUnion — the three credit bureaus. After 12 to 24 months of on-time payments, many issuers convert the card to an unsecured card, return your deposit, and raise your limit.
The deposit is not a fee — it sits in a savings account at the bank and earns a small amount of interest. You get it back when you close the account or when the issuer converts it to unsecured. The real cost is the annual fee, which ranges from $0 to $95 depending on the issuer, and the interest rate if you carry a balance. Secured card interest rates typically run 18% to 24%.
Secured cards are easier to get approved for than unsecured cards because the bank's risk is lower — they hold your deposit as collateral. Even if you default, they can use your deposit to cover the debt. This is why secured cards are the standard first step for people rebuilding credit after bankruptcy, collections, or a long period of missed payments.
Unsecured cards for bad credit: higher cost, no deposit required
Some card issuers offer unsecured cards to people with bad credit — meaning no deposit is required. The tradeoff is that these cards are expensive. Annual fees run $25 to $100, and interest rates are typically 24% to 36%. A few cards in this category charge no annual fee, but they are rare and usually come with a higher interest rate to compensate.
An unsecured card makes sense only if you plan to pay your balance in full every month. If you carry a balance, the interest charges will quickly exceed any benefit to your credit score. For example, a $1,000 balance on a card with a 30% interest rate costs you $300 per year in interest alone — far more than the annual fee on a secured card.
Unsecured cards do report to the credit bureaus, so they help rebuild your score the same way a secured card does. The difference is purely financial: you pay more in fees and interest to avoid putting down a deposit.
What happens during the approval process
When you submit an process, the card issuer runs a hard inquiry on your credit report. This pulls your credit score and shows them your payment history, current debts, and any collections or judgments. The inquiry itself causes a small, temporary dip in your score — usually 5 to 10 points — but it recovers within a few months.
The issuer also verifies your income. They may ask for a recent pay stub, tax return, or bank statement. If you are unemployed or self-employed, bring documentation of your current income — unemployment benefits statements, profit-and-loss statements, or bank deposits showing regular income all count. Some issuers will approve you based on household income if you list a spouse or partner on the process.
Approval or denial typically comes within three to seven business days. The issuer will notify you by phone, email, or mail. If you are approved, the card usually arrives within one to two weeks. If you are denied, the issuer must send you a written explanation that cites the specific reasons — usually a low credit score, recent delinquencies, or insufficient income.
How to choose between secured and unsecured cards
Start with a secured card if your credit score is below 580 or if you have had a recent delinquency, collection, or bankruptcy. Secured cards have the highest approval odds and the lowest interest rates in the bad-credit category. The deposit requirement is actually an advantage: it forces you to save money upfront and gives you a concrete limit to stay within.
Consider an unsecured card only if you have a score above 600, no recent delinquencies, and a reliable plan to pay your balance in full every month. The higher fees and interest rates make unsecured cards a poor choice if you might carry a balance.
Before you explore, check your credit report at AnnualCreditReport.com — this is the only free source authorized by federal law. Look for errors or old accounts that should have fallen off. Dispute any inaccuracies before you explore, because correcting them can raise your score by 10 to 50 points and improve your approval odds.
What to do if you are denied
A denial is not permanent. You can reapply after three to six months, especially if you have used that time to pay down existing debts or resolve a collection account. Each time you pay a bill on time, your score rises slightly. Each time you pay off a debt, your score rises more.
If you are denied, ask the issuer whether you can reapply with a co-signer — usually a family member with better credit who agrees to pay the debt if you do not. A co-signer does not put down a deposit, but they do take on legal responsibility for the debt. This option is available from some issuers but not all.
Another option is to become an authorized user on someone else's credit card account. If that person has good credit and pays on time, their payment history will show up on your credit report after 30 to 45 days. This can raise your score without requiring you to explore for your own card. You do not need to use the card — just being listed as an authorized user helps.
Using your new card to rebuild credit
Once you have a card, the goal is to use it in a way that raises your score as fast as possible. Make small purchases — $20 to $50 per month — and pay the full balance before the due date every single month. This shows lenders that you can borrow money and repay it reliably.
Do not max out your card. Keep your balance below 30% of your limit at all times. If your limit is $500, do not carry a balance higher than $150. This ratio — called your utilization rate — has a large effect on your credit score. High utilization signals financial stress, even if you pay on time.
Set up automatic payments from your bank account so you never miss a due date. A single missed payment can drop your score by 100 points and undo months of progress. Automatic payments take the guesswork out of the process and protect you if you forget.
Frequently Asked Questions
How long does it take to rebuild credit with a new card?
Most people see a 50 to 100 point increase in their score within six months of opening a card and making on-time payments. Larger improvements take 12 to 24 months. The speed depends on how bad your credit was to start with — someone recovering from a recent bankruptcy will see slower progress than someone with an older missed payment.
Will explore for a card hurt my credit score?
Yes, but only slightly and temporarily. The hard inquiry drops your score by 5 to 10 points, and the inquiry stays on your report for 12 months. However, the new account and on-time payments will raise your score much faster than the inquiry lowers it. Do not let fear of a small dip stop you from explore.
Can I get a credit card if I have an active collection account?
It is harder but not impossible. Some secured card issuers will approve you even with an active collection, especially if the collection is old or the amount is small. Unsecured card issuers are more likely to deny you. If you have the money, paying off the collection before you explore will significantly improve your approval odds.
What is the difference between a credit card and a prepaid card?
A prepaid card lets you load money onto it and spend that money, but it does not report to credit bureaus and does not help rebuild your credit. A secured credit card requires a deposit but reports your payments to the bureaus and helps your score grow. For rebuilding credit, a secured card is the right choice.
Should I explore for multiple cards at once?
No. Each process triggers a hard inquiry and lowers your score slightly. Multiple applications in a short time signal financial desperation to lenders and make approval less likely. explore for one card, use it responsibly for three to six months, then explore for a second card if you need one.