What credit cards will accept you with a score under 500

A score under 500 means most standard credit cards will reject you. But secured credit cards, store cards, and cards designed for rebuilding credit do accept people at that score level. The catch: they come with a deposit you put down upfront, a lower credit limit, and higher interest rates and fees than cards offered to people with better scores.

The real value of these cards is not the credit limit — it is the monthly report to the three credit bureaus (Equifax, Experian, TransUnion). If you use the card and pay the bill on time every month, that payment history gets recorded, and your score starts moving up. After 6 to 12 months of on-time payments, you may be able to move to a standard card or get your deposit back.

The trap is thinking the card itself will fix your score. It will not. Only the payment history will. If you open a card and then miss a payment or carry a high balance, your score will drop further.

Key Takeaways

  • Secured cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and they report to all three bureaus if you pay on time.
  • Store cards and cards from credit unions sometimes accept lower scores without requiring a deposit, but they have higher interest rates and smaller limits.
  • The monthly payment history is what rebuilds your score — the card itself does nothing if you do not use it or if you miss payments.
  • After 6 to 12 months of on-time payments, you can often move to an unsecured card or get your deposit back and close the secured card.
  • Avoid cards that charge upfront fees to open the account; legitimate cards charge annual fees only after you are approved.

How secured credit cards work

A secured card requires you to put 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 — swipe it, pay the bill monthly — and the issuer reports your payment to the bureaus.

The deposit stays in the account the whole time you hold the card. You do not spend it. If you stop paying the card bill, the issuer can take the deposit to cover what you owe, but that is a last resort. The deposit is there to protect the issuer, not to be used.

After 6 to 18 months of on-time payments, the issuer will usually convert your card to an unsecured card, return your deposit, or both. Some issuers do this automatically; others require you to ask. Check the card's terms before you open it to see what the issuer's policy is.

Common secured card issuers include Capital One, Discover, and various credit unions. Deposits range from $200 to $2,500. Annual fees range from $0 to $95. Interest rates (called APR) typically run 18% to 24% for people with scores under 500.

Store cards and credit union cards as alternatives

Store cards (issued by retailers like Target, Walmart, or Amazon) sometimes accept lower scores without requiring a deposit. They have smaller credit limits (often $300 to $500) and higher interest rates (often 20% to 29%), but they report to the bureaus and can help rebuild your score the same way a secured card does.

Credit union cards work similarly. If you are a member of a credit union, ask whether they offer cards for people rebuilding credit. Credit unions often have more flexible rules than banks and may accept a lower score or offer a lower deposit requirement.

The downside of store cards is that they are only useful at that one store. If you need a card you can use anywhere, a secured card is more practical. The upside is that you avoid the deposit entirely and can start rebuilding when ready.

What happens to your score when you open a card

Opening a new card causes a small, temporary drop in your score — usually 5 to 10 points. This is called a hard inquiry. It happens because the issuer checks your credit report to decide whether to approve you.

That drop recovers within a few months if you use the card responsibly. The bigger boost comes from the monthly payment history. Each on-time payment adds a small amount to your score. After 6 months of on-time payments, you may see a 20 to 50 point increase. After 12 months, the increase can be 50 to 100 points or more, depending on what else is on your report.

The speed of recovery also depends on what damaged your score in the first place. If you have recent late payments or collections, those will weigh heavily for a while. A secured card will help, but it will not erase those marks when ready. They fade over time — late payments fall off your report after 7 years, and collections after 7 years from the original delinquency date.

Fees and interest rates to watch for

Secured cards charge an annual fee (the yearly cost to hold the card), an interest rate on any balance you carry, and sometimes a one-time processing fee when you open the account. Read the terms carefully before you explore.

Annual fees range from $0 to $95 per year. Some cards waive the fee for the first year. Interest rates (APR) range from 18% to 24% for people with scores under 500. If you carry a $500 balance at 22% APR, you will pay about $92 in interest over a year. Processing fees should not exist — legitimate issuers do not charge upfront fees to open an account. If a card issuer asks for a fee before approval, it is a scam.

The best strategy is to use the card for small purchases you would make anyway, then pay the full balance every month. This way you build payment history without paying interest. If you cannot pay the full balance, the interest charges will slow your score recovery.

Red flags and cards to avoid

Some companies prey on people with low scores by charging high upfront fees, hidden fees, or requiring a deposit that is much larger than the credit limit. Here are the warning signs:

  • Upfront fees before approval. Legitimate card issuers never charge a fee to open an account.
  • Deposit much larger than your credit limit. A $500 deposit should give you a $500 limit, not a $200 limit.
  • Promises that the card will "fix" your score or raise it by a specific amount. Only your payment history and time can do that.
  • Pressure to explore when ready or claims that the offer is only available today. Legitimate cards are available whenever you are ready.
  • Vague terms or refusal to explain fees in writing. Ask for the full terms in writing before you commit.

Stick with issuers you recognize: Capital One, Discover, your own bank, or your credit union. These companies have reputations to protect and clear terms posted online.

Steps to take before opening a card

First, get a copy of your credit report from all three bureaus. You can get a free report once per year from AnnualCreditReport.com. Look for errors — wrong accounts, wrong balances, or accounts that are not yours. If you find errors, dispute them with the bureau. Fixing errors can raise your score before you even open a card.

Second, decide how much you can afford to deposit. If you have $500 in savings, a $500 secured card makes sense. If you have $2,000, you could open a $1,500 card and keep $500 as an emergency fund. Do not empty your savings to open a card.

Third, compare cards side by side. Look at the annual fee, the interest rate, the deposit requirement, and the issuer's policy on converting to an unsecured card. Capital One Secured Mastercard, Discover Secured Card, and cards from your credit union are common starting points.

Fourth, plan how you will use the card. Decide in advance what you will buy with it — groceries, gas, a small monthly bill — and commit to paying the full balance every month. Write this plan down or set a phone reminder.

Frequently Asked Questions

Will opening a secured card hurt my score more?

Opening a card causes a small temporary drop (5 to 10 points) from the hard inquiry, but that recovers within a few months. The monthly on-time payments will more than make up for it. The longer-term benefit far outweighs the short-term dip.

Can I open more than one secured card at once?

You can, but it is not necessary and may hurt more than it helps. Each new card triggers a hard inquiry, and having multiple new accounts can signal risk to lenders. Start with one card, use it responsibly for 6 to 12 months, then consider a second card if you want to build credit faster.

What if I cannot afford the deposit?

Look for a store card or credit union card that does not require a deposit. These have higher interest rates and smaller limits, but they report to the bureaus and cost nothing upfront. Alternatively, save for a few months and then open a secured card with a smaller deposit ($200 to $300).

How long until I can get a regular credit card?

After 6 to 12 months of on-time payments on a secured card, many issuers will convert it to an unsecured card automatically or upon request. Some people move to a different unsecured card after 12 months. The timeline depends on how much your score improves and what other negative items are on your report.

What if I miss a payment on the secured card?

A missed payment will be reported to the bureaus and will drop your score significantly — often 50 to 100 points. It will also stay on your report for 7 years. If you miss a payment, contact the issuer when ready and ask about a hardship program or the option to catch up. Do not ignore the bill.