If you have bad credit you may have given up on getting a credit card. That’s a mistake. Credit cards are a great way to build credit, but you can’t use them to build credit unless you can get one! Credit cards for bad credit may not be easy to find, but they are out there.
There is a way for even people with bad credit – or no credit score at all – to get a credit card and start building credit. Unfortunately, these cards typically come with high fees, high-interest rates, and little spending power. They are not always an attractive option, but sometimes they may be your only option.
If your credit score is closer to the upper limit of the “bad” credit score range, consider improving your credit score before applying for a credit card. Credit cards for fair credit come with better terms and you can even get cards with no annual fee, cards with rewards, cards for travel, student cards, and more.
Let’s look at some of the best credit cards for people with bad credit.
What Are Your Options
If you have poor credit, your best bet is a secured credit card. Secured credit cards are designed to provide credit card convenience and credit building power for people with poor credit or no credit.
Your second best option is an unsecured credit card for bad credit. Unsecured credit cards for people with subpar credit typically come with high fees, high interest rates, and little spending power.
If you’re struggling to build credit you may be looking for any credit account you can get. Some store credit cards may be able to help, but be alert for high prices, fees, and other downsides.
The Best Credit Cards for Bad Credit
When we looked at credit cards for bad credit, we considered these points.
- Does the card have fees?
- What is the APR (Annual Percentage Rate)?
- What is the minimum deposit for a secured card?
- Can you upgrade from a secured to an unsecured card if you establish a good record?
- Will you earn rewards?
- Does the card have a minimum credit score or other requirements?
Here are our top picks for the best credit cards for bad credit.
BEST FOR REWARDS
Discover it Secured Card
The Discover it Secured Card is a top pick among secured cards. There’s no annual fee and the minimum deposit is $200. The regular APR is 25.99% (variable). You can upgrade to a secured card.
There’s a surprising range of rewards for a secured card. You’ll get 2% back on purchases up to $1000 per quarter at restaurants and gas stations. There’s a 1% cashback reward on all other purchases. With CashBack Match, you’ll get an unlimited dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically! Just remember to keep your balance down! Don’t buy things you don’t need just to get the reward.
BEST NO FEE AND LOW APR
nRewards Secured Credit Card
The Navy Federal Credit Union offers the nRewards Secured Credit Card. There’s no annual fee and the regular APR is a variable 18%, unusually low for a no-fee card. The minimum deposit is $200 and upgrades are allowed.
You will have to be a member of the credit union. The card even offers rewards: one point for every dollar spent.
NO CREDIT CHECK OR BANK ACCOUNT NEEDED
OpenSky® Secured Visa® Credit Card
The OpenSky® Secured Visa® Credit Card does not require a credit check, and you can be approved even without a bank account. This is an option for people with no credit score or a score below 350. There’s a $35 annual fee and there’s a variable APR of 19.64%.
There are no rewards.
First Progress Platinum Prestige Mastercard® Secured Credit Card
The First Progress Platinum Prestige Mastercard® Secured Credit Card has no minimum credit score and you’ll only face a soft credit check with no impact on your credit. The variable APR on purchases is 6.74%. There’s a $49 annual fee, though, so you’ll have to carry significant balances to make the low APR worth the fee. The minimum deposit is $200.
There are no rewards.
Unsecured Credit Cards for Bad Credit
Unsecured credit cards for bad credit can help you rebuild your credit score while enjoying the convenience of a credit card. And unlike secured credit cards, they don’t require a security deposit.
Unsecured credit cards for people with bad credit typically come with high fees, high interest rates, and little spending power.
To help you make the best, and the least costly choice, we’ve narrowed down the best unsecured credit cards for bad credit.
UNSECURED STORE CARD OPTION
Fingerhut is an online store that offers a store credit card aimed at people with bad credit. The application is easy and you’ll have a decision in seconds. There’s no minimum credit score or deposit but you will need to meet an income requirement and have a Social Security Number, among other requirements. They report to all three credit bureaus, so the card can help you build credit. The APR is a fixed 29.99%. Your credit limit will be assigned on approval.
If you use a Fingerhut account, make sure that you are buying items that you need and would have bought anyway. Also, be sure to check the price. Fingerhut offers easy credit, but many items are much cheaper at other stores. If you use it with caution this card could help you build credit, but if you’re not careful it could hurt your finances.
Why We Recommend Secured Credit Cards
Secured credit cards are a great way to build your credit from the ground up or repair a history of bad credit.
You’ll still need to apply for one just like a regular card, but the eligibility criteria are a lot more inclusive in most cases.
With responsible use, a good secured credit card will eventually help you graduate to a regular credit card with much better terms.
How Secured Cards Work
A secured credit card is secured by a deposit. You put down a deposit, and the deposit becomes your credit limit. You can’t charge more than you have on deposit. That means the issuer takes no risk. That’s why issuers will approve secured cards for people with bad credit.
Once you have the card, it works just like any other card. You can make charges up to the credit limit. It doesn’t say “secured” on it and nobody will know it’s a secured card. You’ll get a statement and bill every month. If you pay the bill on time you will pay no interest. If you carry a balance to the next statement period you will pay interest.
Your card issuer will report to the credit bureaus. That will help you build credit, as long as you handle your card well.
Some secured cards have an annual fee. Others do not. The cards that don’t have annual fees often have higher interest rates. But remember that if you pay every bill in full and on time that won’t matter. You won’t be paying interest.
👉 Learn more about how secured credit cards work.
How to Build Credit with a Secured Card
If you have bad credit you will want to improve it. A secured credit card can help you do that.
Remember two key factors.
- Payment history is the most important part of your credit score. Make your payments on time.
- Credit utilization is also a critical part of your score. This is the percentage of your credit limit that you actually use. Keep your balance below 30% of your credit limit. Lower is better!
Here are some steps that will help.
- Use your card. A dormant card will contribute less to your credit than an active card.
- Pay every bill on time. On-time payments build credit. Late or missed payments kill credit.
- Pay every bill in full. Any balance carried past the due date incurs interest. That’s money out of your pocket.
- Watch your balance. Secured cards often have low credit limits. That makes it easy for your credit utilization to rise.
👉 Here’s a proven way to build credit
Find a recurring monthly bill that you pay anyway, like your Netflix subscription. Make sure it’s under 30% of your credit limit. Put it on your card and set up an automatic payment from your bank. Your card will be active, the bills will be paid on time, and your credit utilization will stay low. Put the card away and forget about it.
You can even get a second secured card and do the same thing with another bill. If you use no-fee cards it won’t cost you a dime, except for the money you deposit, and you’ll get that back.
If your payment record is good some issuers will raise your limit above your deposit. That keeps your credit utilization even lower. Some will even move you to an unsecured card if you keep a good record!
Low Fee or Low APR?
If you look at these cards you’ll notice right away that in most cases the cards with no fees have significantly higher APRs. Most of the low-APR cards have annual fees.
That may seem like a reasonable tradeoff but consider these points.
- If you pay every bill in full and on time you will never pay interest no matter what the APR is.
- Most secured cards have low credit limits. If you do carry a balance it will be for a low amount. The interest saving from the lower APR will not justify the fee unless you carry large balances all the time, which you should not do.
- Cards with fees may provide more rewards, but you’ll have to spend a lot to earn enough rewards to equal the fees. It’s hard to spend that much with a low credit limit!
In most cases, a low-fee card will be your best bet. Worry about rewards when you have better credit, and protect yourself from interest by paying your bills on time and in full. A card with a fee may be an option if it’s the only one you can get.
☝️ Remember that a low minimum credit score does not guarantee approval. Issuers will look at your record and they may turn you down if they don’t like what they see.
What Comes Next?
You can get credit cards for bad credit. Once you have one, you have a new challenge: get that credit score back where you want it to be!
You already have one valuable tool: your new secured card. Make your payments on time and keep your credit utilization low and you’ll be moving in the right direction.
Once you get a good pattern established with your secured card, consider another secured card.
In the long run, knowledge is the key to building better credit. Start by understanding how your credit score is calculated. Get your credit reports and learn to read them. Look for errors or signs of identity theft, and dispute any problems. You can do this yourself, and you should be very wary of anyone who promises to fix your credit: debt relief and credit repair scams are rampant.
Our article on rebuilding damaged credit should get you started. It takes time, but you can improve your credit, build your financial knowledge, and take control of your financial life at the same time!