Updated: July 1, 2024
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When you have bad credit or are trying to rebuild your credit, getting approved for a credit card can be challenging. About 1 out of every 6 people in the U.S. have a very poor FICO score (300 to 579), so you're not alone. There are many reasons people have poor credit, such as job loss, emergency bills, divorce and economic hardship.
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In today's society, having a credit card is necessary for shopping online, buying gas, booking travel and more. And responsible use of credit cards is one of the best ways to increase your credit score. Our experts at MoneyGeek understand your situation, so we've picked the best credit cards for bad credit to help you improve your credit without paying a lot of fees. We'll share the pros and cons of the easiest credit cards to get with bad credit so you can find one that works best for you.
We’ve selected the top credit cards for bad credit based on multiple factors. For instance, the Citi® Secured Mastercard® charges no annual fee, whereas the Credit One Bank Unsecured Platinum Visa Card for Rebuilding Credit lets you earn cash back on eligible purchases. We’ve also taken other factors such as APRs and added perks into account.
Card Name | Annual Fee | Security Deposit | |
|---|---|---|---|
1. | $0 | $200 | |
2. | Navy Federal Credit Union® nRewards® Secured Credit Card | $0 | $200 |
3. | $0 | $200 | |
4. | $36* | $200 | |
5. | $0–$99* | Not Required | |
6. | $0 | $49 | |
7. | $35 – $99 | Not Required |
Some of the links in the above table will take you to one of our partner's sites where you can compare and apply for a selected credit card.
We've separated the best credit card offers for bad credit into two types — those that require a deposit and those that do not. Our MoneyGeek experts prepare detailed reviews of every card and include their opinion on the pros and cons of each card's offer and key details of fees and benefits.
The best secured credit cards for bad credit require a refundable security deposit to get approved for the card. In most cases, you can receive a higher credit limit by depositing more money, and your deposit will be refunded when it is converted to an unsecured card or if you close your account.
On Partner's Website
Secured credit cards are great options for people with limited credit because they only allow for so much spending. Unsecured credit cards, while they have a credit limit, the card will not limit your spending which could cause issues if the cardholder spends beyond their means. Compare the top secured credit cards at our partner site, CardRatings.com.
Our choices for the best unsecured credit cards for bad credit allow you to get approved for a new credit card without having to deposit any money. These cards are an excellent choice for people who don't have the ability or desire to make a security deposit.
Our experts analyze 57 data points they collect from issuer websites, the Consumer Finance Protection Bureau and details provided by our partners to make sure we give you the most accurate information possible. They subject all new and existing cards from this segment to our unique ranking methodology that takes multiple parameters into account to arrive at the best of the lot.
There are many good credit cards available for those with bad credit. If you're looking to build or repair your credit history, it's important to choose a card that best fits your needs and financial situation. So to cut through the noise, you'll want to pay close attention to certain features and criteria that will help you decide which card is right for you. Below are 10 things you should look out for when comparing credit cards:
Is there a fee to apply for the credit card or to open your account?
Does the credit card charge any fees to keep the account open?
What is the interest rate on purchases and balance transfers? Is the card issuer offering a promotional rate for new cardholders? If so, what are the terms?
How much does the credit card require as a security deposit, and is it refundable?
Does the card earn rewards on your purchases? If so, does it earn cash back, miles or points? Are there any bonus categories or limits on how much you can earn, and do your rewards expire?
What is the minimum credit limit, and can you get a higher limit by increasing your security deposit?
Does the bank automatically increase your credit limit after you've used the card responsibly? If so, how long until that happens?
Will your secured credit card convert to an unsecured card after you've built good credit habits?
Does the card provide free access to your credit score so that you can monitor your progress towards building your credit history?
Are there any other benefits when using the card, such as no foreign transaction fees, purchase protection or zero liability for unauthorized purchases?
There are a variety of credit cards available for people who are building their credit. While some require a security deposit, many do not.
Card Type | Description |
|---|---|
Secured credit cards | These cards require a deposit to open your account, and |
Partially secured credit cards | Customers have to provide a security deposit, but the |
Unsecured credit cards | Unsecured credit cards do not require a security deposit |
Store cards | These cards help build your credit by reporting your |
When looking for a credit card to build your credit, it pays to look at the basic features of each card. Ideally, you'll find a credit card with no annual fee and a low APR on purchases that earns attractive rewards and offers useful benefits, like free access to your credit score.
Good credit cards for bad credit usually have no annual fee, but it is OK to pay a fee if the card earns rewards or includes benefits that make paying the fee worthwhile. You should try to pay your balance in full each month to avoid interest charges, but that may not always be possible. If you have to carry a balance over to the next month, having a card with a low APR means that you'll pay less interest than you would on other credit cards that charge a higher interest rate.
Beyond these standard features, you also want to dig deeper into the credit card's details to avoid unfriendly terms and fees.
Getting a new credit card is the starting point for improving your credit. Now that you've been approved, you must use it responsibly to increase your credit score. Build your score by following these tips:
Make all payments on time
Be sure to make your minimum monthly payment before the due date. Setting up an automatic payment of the minimum due from your bank account ensures you will never miss a payment.
Use the credit card regularly
By making a few small purchases each month and then paying them off quickly, you're showing the bank that you can use the card responsibly. This behavior is usually rewarded with an increased credit limit or upgrading your secured card into one that is unsecured.
Keep your balances low
When the amount you owe is low compared to your credit limit, that can increase your credit score. Consider limiting your purchases to only the amount that you can pay in full each month.
Avoid fees and penalties
Whenever the bank charges a fee or penalty, it is that much harder to keep your balances low and pay off your balance each month. Avoid late payment fees, over-the-limit fees and other fees to keep your money in your pocket.
While getting approved for a new credit card is a popular way to build credit, it is not the only way to do so. There are several alternatives available that will help you build your credit history so that you can get a new card in the future.
After learning about credit card options for people with bad credit and tips for rebuilding your score, you may have additional questions. Some of the most common questions are focused on how to get approval when your credit score is low and what to do if your application is declined.
Yes, a FICO 500 credit score can get you approved for a new credit card. Based on your score, you may have to apply for a secured credit card, such as the Platinum Secured Mastercard from Capital One.
Yes, with a FICO 600, you fall into the fair credit score category. These cards begin to offer good benefits and lower fees, such as the Capital One QuicksilverOne Cash Rewards Credit Card, which offers an unlimited 1.5% cash back with a $39 annual fee.
Not everyone who applies for a credit card will be approved. When this happens, you can build your credit score in alternative ways, such as being added as an authorized user on someone else's card or taking out a credit builder loan.
Yes, retail credit cards can improve your credit score as long as they report to the three major credit bureaus. Retail cards can only be used at that brand's locations, but they show your ability to make payments on time and stay within your credit limit, which are important factors in your credit score.
Yes, many banks offer credit cards designed for people with bad credit. Often, a security deposit will be required to cover your charges in case you do not pay your bill. Some cards will automatically increase your credit line or convert to an unsecured card if you've handled your card responsibly.
Bankruptcy drops your score immediately into the "very poor" (FICO 300 to 579) category because you are defaulting on your accounts. The bankruptcy will stay on your credit report for up to 10 years. Over time, with responsible use of credit, your score will improve.
Yes. While bankruptcy does have a profoundly negative effect on your credit score, it is not a financial death sentence. Some banks will approve you for a credit card shortly after your case has been discharged.
Pre-approved offers can be a good idea because they indicate that you have a good chance of approval for that credit card. Before applying, research other offers because you may find a card that earns more rewards, offers better benefits or has a lower fee.
No. When you receive a pre-approved offer, the bank has used a soft inquiry on your credit, which does not affect your credit score. Only when you submit your application for the offer will a hard inquiry post to your credit report and impact your score.
Most banks do not request verification of the income that is listed on a credit card application. However, if you knowingly report inaccurate data on your application, you are committing fraud. No credit card is worth being convicted of a crime.
No, your bank account is not normally listed on your credit report.
Most banks do not require a bank account to approve you for a credit card. However, having an active bank account at the bank you're applying to can improve your odds of approval. Additionally, having an open bank account makes it easier to pay your credit card bill each month.
Yes. Lowering your utilization ratio (the amount owed versus your credit limit) is one of the quickest ways to improve your credit score. You can do this by paying down your balances or by increasing your credit limits.
Most lenders report to the three major credit bureaus when you borrow money, such as when you take out a car loan, credit card or line of credit. Experian Boost gives consumers credit for other bills, such as phone bills, utilities and popular streaming services.
Now that you know how credit cards for bad credit work, consider applying for one based on factors such as your existing credit score and whether or not you can pay a security deposit. Paying attention to a card’s fees, APRs and possible rewards is also important.
About Lee Huffman
Lee Huffman is a credit card and personal finance expert at MoneyGeek. He has spent 18 years as a financial planner and corporate finance manager, with 12 years of experience writing about early retirement, credit cards, travel, insurance and other personal finance topics. His writings are published on The Points Guy, Investopedia and NerdWallet.
Huffman earned his business management degree from Pepperdine University and his master's degree in eBusiness from the University of Phoenix. He enjoys showing people how to travel more, spend less and live better through the power of travel rewards.
