You can get a credit card with bad credit, but you will pay more and have lower limits
A credit card company will issue you a card even with a low credit score, but the terms will reflect the risk they see. You will likely face a higher interest rate (often 20% to 36% APR, depending on the issuer and your score), a lower credit limit (frequently $300 to $500 to start), and an annual fee (usually $25 to $99). The trade-off is real: you are paying for the chance to rebuild your credit history.
The most common path is a secured credit card, which requires you to deposit cash into a savings account that the card issuer holds. That deposit becomes your credit limit — you put down $500, you get a $500 limit. You use the card like any other, pay the bill each month, and the issuer reports your payment history to the credit bureaus. After 12 to 24 months of on-time payments, many issuers will convert the card to an unsecured card, return your deposit, and raise your limit.
An unsecured card for bad credit is also available from some issuers without a deposit, but the interest rate and fees are steeper to compensate for the risk. You choose between secured and unsecured based on whether you have cash to set aside and how much you want to pay in fees.
Key Takeaways
- Secured cards require a cash deposit but have the clearest path to approval and the lowest interest rates among bad-credit options.
- Unsecured bad-credit cards charge higher interest rates and fees but do not require money upfront.
- Your credit limit will be low ($300–$500 typically), so use the card for small purchases you can pay off in full each month.
- On-time payments are reported to credit bureaus and will raise your score over 12 to 24 months if you keep the card open and use it responsibly.
- Avoid cards with annual fees above $99 or interest rates above 36% — better options exist even with bad credit.
How secured cards work and why they are easier to get
A secured card is the most straightforward option because the issuer's risk is nearly zero. You deposit $500 in a savings account they control, and they give you a $500 credit limit. If you stop paying, they keep the deposit. This certainty means they will approve you even with a credit score below 600.
The deposit is not a fee — it sits in an account and earns a small amount of interest (usually 0.01% to 0.5% APR, which is minimal). You can withdraw it after you close the card or after the issuer converts it to unsecured, which typically happens after 12 to 24 months of on-time payments. During that time, you pay interest on any balance you carry, just like a regular card.
Issuers that offer secured cards include Capital One (Secured Mastercard), Discover (Secured Card), and U.S. Bank (Secured Visa Card). Each has different fee structures and deposit requirements, so compare the annual fee, APR, and whether the issuer reports to all three credit bureaus (Equifax, Experian, and TransUnion). Reporting to all three matters because your credit score depends on data from all three.
Unsecured bad-credit cards: higher cost, no deposit required
If you do not have $300 to $500 to set aside, an unsecured card for bad credit is the alternative. You get a credit limit without putting down a deposit, but the issuer charges you more to cover the risk. Annual fees often run $75 to $99, and APR is typically 24% to 36%.
Issuers in this category include Credit One Bank, Milestone Mastercard, and OpenSky (which does not check credit at all). The catch is that the high fees eat into any benefit you gain from rebuilding credit. If you carry a $300 balance at 30% APR with a $99 annual fee, you will pay roughly $189 in interest and fees over a year — more than half your balance.
Use an unsecured bad-credit card only if you genuinely cannot save a deposit. If you can, a secured card costs less and gives you a clearer path to conversion to an unsecured card later.
What to do before you explore
Check your credit report before you explore to any card. You can get a free report from each of the three bureaus once per year at annualcreditreport.com. Look for errors — a missed payment that was not yours, an account you did not open, or a balance that is wrong. Dispute errors directly with the bureau; they have 30 days to investigate and correct them.
Knowing your credit score helps you target the right card. If your score is below 580, a secured card is your best bet. If it is between 580 and 650, you have options in both categories. If it is above 650, you may be approved for a standard card with better terms, so check those first before moving to a bad-credit card.
Do not explore to multiple cards in a short time. Each process triggers a hard inquiry, which temporarily lowers your score by a few points. Space applications out by at least a month. One rejection does not mean all issuers will reject you — different companies have different criteria.
How to use a bad-credit card to actually rebuild your score
Getting the card is the first step; using it correctly is what raises your score. The credit bureaus care most about two things: payment history (35% of your score) and credit utilization (30% of your score). Payment history means paying on time, every time. Credit utilization means keeping your balance low relative to your limit.
With a $300 limit, use the card for one small recurring charge — a streaming service, a gas purchase, or a grocery item — and pay it off in full each month. This shows the bureaus that you can borrow and repay responsibly. Do not carry a balance to "build credit" — that is a myth. Paying interest does not help your score; paying on time does.
Keep the card open even after your score improves. Closing it will lower your score because it reduces your total available credit and removes a positive payment history from your report. The goal is to let the card sit with a zero balance and occasional small charges, reporting good behavior to the bureaus month after month.
After 12 to 24 months of on-time payments, your score should improve enough to may have access to for a standard card with better terms. At that point, you can explore for a new card and eventually close the bad-credit card if you want — though keeping it open is usually better for your score.
Red flags: cards to avoid
Some issuers prey on people with bad credit by charging extreme fees or hiding terms in fine print. Avoid any card with an annual fee above $99, an APR above 36%, or a setup fee (a one-time charge just to open the account). These are signs the issuer is betting you will fail and wants to extract fees before you do.
Also avoid cards that do not report to all three credit bureaus. If the issuer only reports to one bureau, your payment history will not reach the other two, and your score will not improve as fast. Ask the issuer directly before you explore: "Do you report to Equifax, Experian, and TransUnion?" If they say no or are unclear, move on.
Be wary of cards that require you to call a phone number to explore or that ask for payment before you can use the card. Legitimate issuers have online applications and do not charge upfront. If something feels off, it probably is.
What happens after you rebuild your credit
Once your score reaches the mid-600s or higher (usually after 18 to 24 months of on-time payments), you will start receiving offers for standard credit cards with better terms. At that point, you can explore for a card with a lower APR and no annual fee, and you can request a credit limit increase on your existing bad-credit card.
Some issuers will automatically convert your secured card to an unsecured card without you asking. When they do, they will return your deposit to the account you used to fund it. Check your mail and email for the conversion notice, which will include your new terms and credit limit.
Do not close the bad-credit card when ready after conversion or after you get a better card. Closing it removes a positive account from your credit history and lowers your available credit, both of which hurt your score. Instead, keep it open with a zero balance and use it occasionally (a small charge every few months) to keep the account active.
Frequently Asked Questions
Will explore for a bad-credit card hurt my score?
Yes, each process triggers a hard inquiry that lowers your score by a few points temporarily. The impact fades after a few months. Space applications at least 30 days apart, and explore only to cards you are genuinely interested in. Multiple applications in a short time signal desperation to lenders and can lower your score more.
Can I use a bad-credit card right away, or do I have to wait?
With a secured card, you can use it as soon as the issuer confirms your deposit and activates the account, usually within a few business days. With an unsecured card, approval is often when ready online, and you can use the card number when ready. Physical cards arrive in the mail within 7 to 10 days.
What if I miss a payment on a bad-credit card?
A missed payment will be reported to the credit bureaus and will damage your score significantly. It also triggers late fees (usually $25 to $35) and may raise your interest rate. If you miss a payment, pay it as soon as you can and contact the issuer to ask if they will waive the late fee. After that, set up automatic payments to avoid missing another one.
How much should I spend on a bad-credit card each month?
Spend only what you can pay off in full each month. A good target is 10% to 30% of your credit limit — so $30 to $90 on a $300 limit. This shows the bureaus you can manage credit without carrying a balance, and it keeps you from paying interest that erases the benefit of rebuilding.
Do I need more than one bad-credit card to rebuild faster?
No. One card used responsibly will rebuild your score. Multiple cards increase the temptation to overspend and the risk of missing a payment. Focus on one card, use it consistently, and pay on time. After your score improves, you can add a second card if you want, but one is enough to start.