Yes, you can get a credit card with bad credit, but your options are limited and the terms will be less favorable than cards for people with good credit

Banks and credit card companies assess risk based on your credit history. A low credit score signals that you have missed payments, carried high balances, or had accounts sent to collections. Lenders respond by either declining you outright or offering cards with higher interest rates, lower credit limits, and annual fees. The cards available to you exist — they are just not the same cards offered to borrowers with scores above 670.

Your path forward depends on your score range and what caused the damage. Someone with a 550 score and a recent bankruptcy faces different options than someone with a 620 score and one missed payment two years ago. The specific cards designed for bad credit borrowers fall into two categories: secured credit cards, which require a cash deposit, and unsecured cards for bad credit, which do not but charge higher fees and rates.

Key Takeaways

  • Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and most report to all three credit bureaus to help rebuild your score.
  • Unsecured bad-credit cards exist but typically charge annual fees of $25 to $99 and interest rates of 24% to 36%, making them expensive unless you pay the full balance monthly.
  • Your credit score, recent payment history, and income all factor into approval, but having bad credit alone does not automatically disqualify you from either card type.
  • Approval decisions can come within minutes to a few days, and most cards report your activity to credit bureaus monthly, so on-time payments begin rebuilding your score when ready.

How secured credit cards work and why they rebuild credit faster

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, you get a $500 limit. You then use the card like any other credit card — make purchases, receive a bill, and pay it. The deposit sits untouched unless you default; it is not deducted from your purchases.

Secured cards rebuild credit because the card issuer reports your payment history to Equifax, Experian, and TransUnion every month. On-time payments signal to future lenders that you are managing credit responsibly again. Most people see their score improve by 50 to 100 points within six to twelve months of consistent on-time payments.

After twelve to eighteen months of perfect or near-perfect payments, many issuers will convert your secured card to an unsecured card and return your deposit. Some require you to request the conversion; others do it automatically. A few cards, like the Capital One Secured Mastercard and the Discover it Secured Credit Card, are known for converting relatively quickly, though conversion is never may provide.

Unsecured bad-credit cards: when they make sense and when they do not

An unsecured credit card for bad credit does not require a deposit. You are approved based on your credit history and income alone. The tradeoff is cost: these cards typically charge annual fees of $25 to $99 and interest rates between 24% and 36%. Some also charge monthly maintenance fees or fees for going over your limit.

An unsecured bad-credit card makes sense only if you can pay your full balance every month. If you carry a balance, the high interest rate means you pay far more in interest than you would on a secured card. For example, a $1,000 balance on a 30% APR card costs you $300 per year in interest alone. On a secured card with a typical 18% to 22% APR, that same balance costs $180 to $220.

Where unsecured cards have an advantage is speed and simplicity. You do not need to save up a deposit, and approval can come within minutes. If you need a card when ready and cannot fund a deposit, an unsecured option may be your only route. Just understand that you are paying for that convenience through higher rates and fees.

What lenders look at when you have bad credit

When you explore for a credit card with bad credit, the issuer reviews several things beyond your score. They look at the age of your negative marks — a missed payment from six months ago weighs more heavily than one from three years ago. They check whether you have recent on-time payments, because that suggests your situation has improved. They verify your income to may support you can make at least minimum payments.

Some issuers also consider whether you have an existing account with them. If you have a checking or savings account at the bank, approval odds improve. A few cards, like the Chime Credit Builder Card, are designed for people with no credit history or very recent damage and may approve you based on income and bank account activity rather than a credit score.

Bankruptcy, charge-offs, and collections accounts make approval harder but not impossible. Most issuers will consider you two to three years after a bankruptcy discharge or after a collection account is paid. Recent legal action — a judgment filed in the last year — is a bigger barrier than older negative marks.

The process process and what to expect

explore for a credit card with bad credit works the same way as explore with good credit: you fill out an online form or paper process with your name, address, income, and Social Security number. The issuer pulls your credit report and makes a decision, usually within minutes to a few days.

For a secured card, you will also need to fund your deposit. Most issuers let you do this online when ready after approval, and your card arrives within five to ten business days. For an unsecured card, approval means the card ships to you; there is no deposit step.

If you are denied, you have the right to know why. The denial letter will cite reasons such as "insufficient credit history," "recent delinquency," or "high debt-to-income ratio." You can also request a free copy of your credit report from AnnualCreditReport.com to see what the issuer saw. If there are errors — a missed payment you actually made, an account that is not yours — you can dispute them with the credit bureau.

Building credit after approval: what happens next

Once you have the card, your job is straightforward: use it for small purchases you would make anyway, and pay the full balance on time every month. Do not max out the card. Aim to use 10% to 30% of your limit — a $500 limit means spending $50 to $150 per month. High utilization (using more than 30% of your limit) signals financial stress to lenders, even if you pay on time.

Set up automatic payments if possible. Missing even one payment undoes months of progress and damages your score further. If you cannot pay the full balance, pay as much as you can — at minimum, more than the minimum payment. The minimum payment barely covers interest and keeps you in debt longer.

After six to twelve months of on-time payments, your score will likely improve enough to open doors to better cards. At that point, you can explore for a card with lower rates and no annual fee, or request a credit limit increase on your current card. Do not close the bad-credit card once you upgrade; keeping it open with a zero balance helps your credit score by lowering your overall credit utilization.

Common mistakes that keep people stuck with bad credit

The most common mistake is explore for multiple cards at once. Each process triggers a hard inquiry, which temporarily lowers your score by a few points. Multiple inquiries in a short time signal to lenders that you are desperate for credit, which raises red flags. Space applications at least three to six months apart.

Another mistake is closing old accounts. Even if an account has a high interest rate or annual fee, closing it reduces your available credit and raises your utilization ratio. If the card has an annual fee, call and ask if the issuer will waive it or convert it to a no-fee version. Only close the account if they refuse and you have already built credit elsewhere.

A third mistake is ignoring your credit report. Errors are common — accounts listed twice, payments marked late when they were on time, or accounts that are not yours. These errors can keep your score artificially low. Check your report once a year at AnnualCreditReport.com and dispute anything wrong.

Frequently Asked Questions

How bad does my credit have to be to need a secured card instead of an unsecured one?

Most secured cards accept scores as low as 300, while unsecured bad-credit cards typically require a score of 550 or higher. If your score is below 550 or you have a recent bankruptcy or charge-off, a secured card is usually your only option. If your score is 550 to 650, you may be approved for either type — secured cards are just a faster path to rebuilding.

Will getting a credit card with bad credit make my score worse?

The hard inquiry from the process lowers your score by a few points temporarily, usually recovering within a few months. After that, the card helps your score if you use it responsibly. On-time payments and low utilization both improve your score over time, offsetting the initial dip from the inquiry.

Can I get a credit card if I have an active collection account?

Yes, but approval is less likely. Most issuers will consider you if the collection is being paid or has been paid. If the collection is unpaid and recent, try paying it first — even a partial payment can improve your chances. Some issuers, particularly those offering secured cards, are more flexible on this than others.

What is the difference between a credit card and a prepaid card for someone with bad credit?

A prepaid card lets you load money onto it like a gift card, but it does not report to credit bureaus and does not build your credit. A credit card reports your payment history to the bureaus, which is how you rebuild your score. If your goal is to improve credit, a credit card — secured or unsecured — is the right tool.

How long does it take to go from bad credit to good credit?

Most people see meaningful improvement within six to twelve months of on-time payments. Reaching "good" credit (670 or higher) typically takes eighteen to twenty-four months. The timeline depends on how bad the damage was and whether you have other negative marks aging off your report. Older damage counts less, so time itself helps even if you do nothing.