What credit cards are actually available to people with low credit scores
You can get a credit card with a low credit score, but your options are narrower and the terms will be less favorable than what someone with good credit receives. Banks and card issuers sort applicants by credit score, and below a certain threshold — usually around 580 to 620 — you move into the category where most mainstream cards reject you outright. What remains are secured cards, cards designed for credit rebuilding, and cards from issuers who accept higher-risk applicants.
The trade-off is real: you will pay an annual fee, a higher interest rate, or both. You may also get a lower credit limit. But the point of these cards is not to spend freely — it is to demonstrate that you can use credit responsibly over time, which gradually raises your score. That improvement then opens access to better cards and better rates on loans.
Key Takeaways
- Secured credit cards require a cash deposit that becomes your credit limit, and most charge an annual fee between $25 and $95.
- Unsecured cards for rebuilding credit exist but carry higher interest rates (often 24% to 36%) and lower limits than secured cards.
- Your payment history is what matters most to card issuers reviewing a low credit score, so on-time payments every month will raise your score faster than any other action.
- After 6 to 12 months of perfect payments, many secured card issuers will convert your account to an unsecured card and return your deposit.
How secured credit cards work
A secured credit card requires you to deposit money into a savings account held by the card issuer. That deposit becomes your credit limit. If you deposit $500, your limit is $500. You then use the card like any other card — make purchases, receive a bill, and pay it back. The deposit sits untouched unless you stop paying your bill, in which case the issuer can use it to cover what you owe.
The deposit is not a fee; it is your own money. But secured cards do charge annual fees, usually $25 to $95, which comes out of your account or is added to your first bill. Some cards waive the annual fee in the first year if you meet certain conditions, like making a minimum number of purchases.
The real value of a secured card is that it reports to all three credit bureaus — Equifax, Experian, and TransUnion — every month. Each on-time payment you make gets recorded, and over time that payment history raises your credit score. After 6 to 12 months of perfect payments, many issuers will automatically convert your account to an unsecured card, raise your limit, and return your deposit.
Unsecured cards designed for credit rebuilding
Some card issuers will issue an unsecured card to someone with a low credit score without requiring a deposit. These cards exist, but they come with a cost: interest rates typically run 24% to 36%, which is substantially higher than secured cards or mainstream cards. Your credit limit will also be lower, often $300 to $500 to start.
The advantage is that you do not tie up cash in a deposit. The disadvantage is that if you carry a balance, the interest charges will be steep. For that reason, these cards work best if you plan to pay your full balance every month. If you cannot do that, a secured card is usually the better choice because the interest rate is lower and you are not losing the use of your deposit money.
What happens to your credit score when you use these cards
Your credit score is built from five factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). A credit card affects almost all of them. Each on-time payment improves your payment history. Keeping your balance low relative to your limit improves your amounts owed. The card itself adds to your credit mix if you have only loans or only cards before.
The fastest improvement comes from payment history. Missing even one payment can drop your score by 50 to 100 points. Making every payment on time, every month, will raise your score by 5 to 10 points per month on average, though the exact rate depends on your starting score and the rest of your credit file. After 6 months of perfect payments, you should see a noticeable improvement. After 12 months, you will likely may have access to for better cards and better rates.
One caution: explore for multiple cards in a short time will hurt your score temporarily because each process triggers a hard inquiry. Space applications out by at least a few months, and focus on one card at a time.
Comparing secured cards from major issuers
| Card | Minimum Deposit | Annual Fee | Typical APR | Converts to Unsecured |
|---|---|---|---|---|
| Capital One Secured Mastercard | $200 | $39 | 26.99% | After 6 months of on-time payments |
| Discover Secured Card | $200 | $0 | 25.99% | After 6 months of on-time payments |
| OpenSky Secured Visa | $200 | $35 | 20.99% | No automatic conversion; review after 12 months |
| Chime Credit Builder Visa | $0 (deposit optional) | $0 | N/A (no interest if paid in full) | Not applicable; designed for building history |
Rates and terms change, so check the issuer's current website before you explore. The Discover card stands out because it charges no annual fee, which makes it the lowest-cost option if you may have access to. Capital One and OpenSky both report to all three bureaus and have straightforward conversion policies. Chime works differently — it is a debit card with a credit-building feature, not a traditional credit card, but it costs nothing and builds history without interest risk.
Steps to explore and what to expect
Start by checking your credit score through a free service like AnnualCreditReport.com, Credit Karma, or your bank's website. Knowing your actual score helps you target cards that will review your process. Most secured card issuers will review applications from people with scores below 600, though approval is not may provide.
When you explore, have your Social Security number, current income, and employment information ready. The issuer will run a hard inquiry on your credit report. If approved, you will be asked to fund your deposit, usually within 7 to 10 days. Once the deposit clears, your card arrives in the mail, typically within 1 to 2 weeks.
Use the card for small, regular purchases — a gas fill-up, a grocery trip, a subscription — and pay the full balance every month. Do not carry a balance to build credit faster; that is a myth. Paying interest does not improve your score any more than paying in full does. What matters is that the payment is on time and the account is reported to the bureaus.
Alternatives if you cannot get approved for a card
If you explore for a secured card and are denied, the issuer will tell you why. Common reasons include too many recent hard inquiries, active collections accounts, or a very recent bankruptcy. In those cases, waiting a few months and reapplying often works better than explore to multiple cards at once.
Another route is a credit-builder loan, offered by credit unions and some banks. You borrow a small amount — usually $300 to $1,000 — and the lender holds the money in a savings account. You make monthly payments to yourself, and the lender reports your payment history to the bureaus. After you finish paying, you get the money back. This builds credit without the interest rate risk of a credit card.
You can also ask a family member or friend with good credit to add you as an authorized user on one of their cards. Their payment history will be added to your credit report, which can raise your score. This works only if they pay on time consistently and do not carry a high balance.
Frequently Asked Questions
Will getting a secured card hurt my credit score?
The process itself will trigger a hard inquiry, which drops your score by a few points temporarily. But the card itself will help your score over time because it adds to your credit mix and gives you a way to build payment history. The temporary dip is worth the long-term gain.
What if I miss a payment on a secured card?
A missed payment will be reported to the credit bureaus and will damage your score significantly — usually 50 to 100 points depending on how late it is. The issuer may also charge a late fee, typically $25 to $35. If you miss a payment by 30 days or more, the issuer can use your deposit to cover what you owe.
Can I use a secured card to pay bills like rent or utilities?
Most landlords and utility companies do not accept credit cards, or they charge a processing fee that makes it expensive. Secured cards work best for purchases you would normally make with a debit card — groceries, gas, small retail purchases — where you can pay the full balance when ready.
How long does it take to move from a secured card to a regular card?
Most issuers will convert your account after 6 months of on-time payments. Some require 12 months. When conversion happens, your deposit is returned to you, usually within 5 to 7 business days, and your card becomes unsecured with a higher limit.
Should I close my secured card after it converts to unsecured?
No. Closing the card will lower your credit score because it reduces your available credit and shortens your average account age. Keep it open and use it occasionally, even if you move to a better card. The longer the account stays open with good payment history, the more it helps your score.