You can get a credit card with poor credit, but you will pay higher interest rates and start with a lower credit limit
A credit card with poor credit exists, but it is not the same product as one you would get with good credit. Banks and card issuers see you as higher risk, so they offset that risk by charging you more. The most common route is a secured credit card, which requires a cash deposit that becomes your credit limit. Unsecured cards for poor credit also exist — they charge higher annual percentage rates (APRs) and often include annual fees — but secured cards are easier to obtain and usually cost less over time if you use them correctly.
The real decision is not whether you can get approved, but which type makes sense for your situation and how you will use it to rebuild your credit history. A card you never use does not help you. A card you max out every month makes your credit worse. The goal is to show lenders over time that you can borrow money and pay it back on schedule.
Key Takeaways
- Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and most issuers report to all three credit bureaus.
- Unsecured cards for poor credit charge higher APRs (often 24% to 36%) and may include annual fees, but do not require a deposit.
- Your credit score improves when you keep your balance below 30% of your limit and pay your bill on time every month.
- After 6 to 18 months of on-time payments, many secured card issuers will convert your account to an unsecured card and return your deposit.
Secured credit cards: how the deposit works
A secured credit card works like this: you give the bank a cash deposit, and that deposit becomes your credit limit. If you deposit $500, your credit limit is $500. You then use the card like any other credit card — make purchases, receive a monthly bill, and pay it. The bank holds your deposit in a separate account and does not touch it unless you stop paying your bill.
The deposit is not a fee. It is your own money sitting in the bank's account. When you close the card or graduate to an unsecured card, you get the deposit back. What you pay for is the interest on any balance you carry and sometimes an annual fee (though many secured cards have no annual fee).
Secured cards report to the three major credit bureaus — Equifax, Experian, and TransUnion — the same way unsecured cards do. Your payment history, credit utilization (how much of your limit you use), and account age all feed into your credit score. This is why secured cards work: they give you a way to build a credit history when no one will lend to you unsecured.
Unsecured cards for poor credit: higher cost, no deposit
An unsecured card for poor credit requires no deposit, but the cost is higher. These cards typically charge APRs between 24% and 36%, compared to 15% to 21% for someone with good credit. Many also charge an annual fee of $25 to $99. Some charge both an annual fee and a processing fee just to open the account.
The advantage is speed and simplicity: you do not need to save up a deposit, and your credit limit may be higher than a secured card would offer. The disadvantage is that every dollar you carry as a balance costs you more in interest. If you charge $500 and pay it off over three months, you will pay roughly $30 to $45 in interest alone, plus the annual fee.
Unsecured cards make sense if you need a card when ready and can pay your balance in full each month. If you carry a balance, the interest and fees will work against your goal of rebuilding credit, because you will be paying money that could go toward paying down debt.
Where to look: banks, credit unions, and online issuers
Secured cards are offered by most major banks (Capital One, Discover, Bank of America) and by many online banks and credit unions. Credit unions often have lower deposit minimums and lower fees than large banks, so if you belong to one, start there. If not, you can join many credit unions based on where you live or work.
Online banks like Chime, LendingClub, and Self also offer secured cards, sometimes with no annual fee. The trade-off is that online banks may have fewer features or less customer service than a traditional bank branch, but for a secured card — which you are using as a tool to rebuild credit, not as your primary banking relationship — that is usually not a problem.
Unsecured cards for poor credit are offered by issuers like Credit One Bank, Milestone, and OpenSky. These are legitimate companies, but read the terms carefully. Some charge multiple fees (annual, processing, and monthly maintenance fees) that add up quickly. A card with a $99 annual fee and a $25 processing fee costs you $124 before you ever use it.
How to use a credit card to actually rebuild your credit
Getting the card is the first step. Using it correctly is what rebuilds your credit. The two most important factors in your credit score are payment history (35%) and credit utilization (30%). This means: pay on time, every time, and keep your balance low.
Specifically, keep your balance below 30% of your credit limit. If your limit is $500, do not carry more than $150 as a balance. If you need to spend more than that, pay down the balance before your statement closes. You can use the card for everyday purchases — groceries, gas, a small bill — and then pay it off in full each month. This shows lenders you can borrow and repay without defaulting.
Set up automatic payments if your card issuer offers it. Missing even one payment will damage your credit and may trigger a higher interest rate. If you are worried about forgetting, automate it. Pay at least the minimum, but paying in full is better.
Do not close the card after your credit improves. Account age matters for your credit score, and closing an old account can lower your score. Keep it open and use it occasionally, even after you graduate to better cards.
When your credit improves: graduating to an unsecured card
After 6 to 18 months of on-time payments, many secured card issuers will review your account and convert it to an unsecured card. When this happens, they return your deposit and your credit limit may increase. This is not automatic — the bank decides based on your payment history — but it is common enough that you should ask your issuer what their timeline is.
Some issuers will tell you upfront: "After 12 months of on-time payments, we review your account for conversion." Others do it without warning. Either way, once you convert, you have an unsecured card with a lower APR than you started with, and you have built a credit history that other lenders can see.
At this point, you can explore for other cards with better terms, or you can keep the card you have. The goal is not to collect cards; it is to have options and to show lenders you can manage credit responsibly.
What to avoid: predatory terms and common traps
Some cards marketed to people with poor credit are designed to extract fees rather than help you rebuild. Watch for cards that charge a monthly maintenance fee, a processing fee just to open the account, or an annual fee above $99. These fees do not help your credit; they just cost you money.
Avoid cards that offer a very high credit limit relative to your deposit. If a card promises a $1,000 limit for a $300 deposit, read the fine print. Often, the extra $700 is a "line of credit" that comes with a separate, higher interest rate, or it is contingent on you spending money you do not have.
Do not explore for multiple cards in a short time. Each process creates a hard inquiry on your credit report, and multiple inquiries in a short period can lower your score. explore for one card, use it for a few months, and then explore for another if you need it.
Frequently Asked Questions
Will getting a credit card hurt my credit score?
A hard inquiry when you explore will lower your score slightly, usually by 5 to 10 points, but it recovers within a few months. Opening a new account also lowers your average account age, which can dip your score temporarily. Over time, though, on-time payments and low utilization will raise your score more than the initial dip lowered it.
Can I get a credit card if I have no credit history at all?
Yes. A secured card is often easier to get with no credit history than with poor credit, because the bank is not taking any risk — your deposit covers your limit. You may also be able to get an unsecured card designed for people building credit for the first time, though the terms will be less favorable than a secured card.
What if I cannot afford a deposit for a secured card?
Some credit unions offer secured cards with deposits as low as $200, and a few offer cards with no deposit requirement for members. If you cannot save $200 to $500, focus on that first. A secured card only works if you can afford the deposit and then use the card responsibly without carrying debt you cannot pay.
How long does it take to rebuild my credit with a credit card?
Credit scores move slowly. You may see a small improvement within 3 to 6 months of on-time payments, but meaningful improvement usually takes 12 to 24 months. The older your negative marks (late payments, collections, charge-offs), the longer they take to fade. A credit card is one tool, not a quick fix.
Should I get a secured card or an unsecured card?
If you can afford the deposit, a secured card is almost always the better choice. The APR is lower, fees are usually lower, and you are more likely to be approved. Use the unsecured route only if you need a card when ready and cannot save a deposit, or if you can pay your balance in full every month and the higher APR does not matter to you.