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 see bad credit as a sign that you have missed payments, owed more than you could pay back, or both. They are not going to disappear — they are going to charge you more to take the risk. That means higher interest rates, lower credit limits, and annual fees. But cards designed specifically for people rebuilding credit do exist, and they work differently than you might expect.

The most common path is a secured credit card, which requires you to put down a cash deposit. You do not borrow against that deposit — instead, the card company holds it as collateral while you use the card normally. You charge purchases, you get a bill, you pay it. The deposit stays frozen in a separate account. After 12 to 24 months of on-time payments, many issuers will convert your card to an unsecured one and return your deposit. That conversion is the whole point: you are paying to prove you can handle credit again.

A smaller number of issuers offer unsecured cards for bad credit — no deposit required. These cards come with higher interest rates and lower limits, but they skip the deposit step. They are harder to find and usually require you to have a bank account with the issuer first.

Key Takeaways

  • Secured credit cards require a cash deposit (usually $200 to $2,500) that the issuer holds as collateral, not as money you borrow against.
  • Your credit limit on a secured card is typically equal to your deposit amount, so a $500 deposit gives you a $500 limit.
  • Interest rates on bad-credit cards range widely but often start at 18% to 24% APR, depending on the issuer and your specific credit history.
  • On-time payments on a secured card are reported to the three credit bureaus and will gradually raise your credit score if you keep your balance low.
  • Many secured cards convert to unsecured cards after 12 to 24 months of consistent payments, at which point your deposit is returned.

How a secured credit card actually works

When you open a secured card, you deposit money into a savings account that the card company controls. That account earns little to no interest — it is just sitting there as insurance. Your credit limit is usually equal to your deposit: put in $500, get a $500 limit. Some issuers let you deposit up to $2,500; a few go higher.

You then use the card like any other credit card. You swipe it, you get a statement, you owe interest on what you carry over from month to month. The deposit never moves unless you close the account or the issuer converts it to unsecured. The card company is betting that you will pay your bills on time. If you do not, they can take the deposit to cover what you owe, but that is a last resort — they would rather you just pay normally.

The reason this works for rebuilding credit is that your payments get reported to Equifax, Experian, and TransUnion, the three major credit bureaus. A year or two of on-time payments will raise your score noticeably, especially if you keep your balance below 30% of your limit. Once your score recovers enough, you can move to an unsecured card and get your deposit back.

Unsecured cards for bad credit: rarer but possible

Some card issuers will give you an unsecured card without a deposit, even with bad credit. Capital One and Discover both offer cards in this category. The catch is that the interest rates are higher — often 24% to 29% APR — and the credit limits are lower, usually $300 to $500 to start.

Unsecured bad-credit cards are also harder to find because fewer issuers offer them. You will need to search by name rather than browse a category. If you have a bank account with a specific institution, check whether they offer a card for customers with lower credit scores; some do, and existing customers sometimes get better terms.

The advantage of an unsecured card is that you do not have to tie up cash. The disadvantage is that you are paying a higher interest rate for that privilege. If you have $500 to put down, a secured card at 18% APR is usually a better deal than an unsecured card at 26% APR.

What your credit score needs to be

There is no hard cutoff — different issuers have different thresholds. Generally, secured cards are available to people with credit scores below 600, and many issuers will work with scores in the 500s. Unsecured bad-credit cards typically require a score of 550 or higher, though some go lower.

Your credit score is not the only thing issuers look at. They also check your income, your employment history, and whether you have any recent late payments or collections accounts. A score of 580 with a steady job and no recent defaults is a stronger process than a score of 620 with a recent eviction or wage garnishment.

If your score is very low — below 500 — or if you have a recent bankruptcy or collection account, you may need to wait a few months before you have a realistic chance. Secured cards are still your best option, but timing matters. The older your negative marks, the less weight they carry in the decision.

Interest rates and fees you will actually pay

Interest rates on bad-credit cards vary by issuer and by your specific situation. Secured cards typically range from 16% to 24% APR. Unsecured bad-credit cards often start at 24% and go up to 29% or higher. These are not the rates you see advertised for people with good credit — they reflect the risk the issuer is taking.

Annual fees are common on bad-credit cards. Secured cards often charge $25 to $95 per year. Some unsecured bad-credit cards charge annual fees; others do not. A few issuers waive the annual fee for the first year or waive it if you keep your balance below a certain amount.

To understand what you will actually pay, do the math on a specific scenario. If you carry a $300 balance on a card with 22% APR and a $35 annual fee, you will pay roughly $66 in interest per year plus the $35 fee — about $101 total. That is the cost of rebuilding credit. It is not free, but it is not ruinous either if you keep your balance small and pay on time.

How to find and compare bad-credit cards

Start by searching for "secured credit card" or "credit card for bad credit" on the websites of banks where you already have an account. Many large banks offer these products but do not advertise them heavily. If you do not find anything, try the major issuers that specialize in bad-credit cards: Capital One, Discover, and OpenSky are common names.

When you compare cards, look at four things: the annual fee, the APR, the deposit requirement (if secured), and the conversion timeline. A card with a $95 annual fee and 18% APR might be better than one with no annual fee and 26% APR, depending on how much you plan to carry. A card that converts to unsecured after 12 months is better than one that takes 24 months, all else equal.

Read the fine print about conversion. Some issuers promise conversion after a certain number of on-time payments; others do it automatically after a time period. Some will convert you to a different card than the one you applied for. Knowing the conversion terms upfront helps you plan your next move.

What happens after you get approved

Once you are approved, you will deposit your money (if it is a secured card) and receive your card in the mail within 7 to 10 business days. Your credit limit will be set, and you can start using the card when ready.

The most important thing you can do now is keep your balance low and pay on time, every time. Aim to use no more than 10% to 30% of your limit — so on a $500 limit, keep your balance under $150. Pay at least the minimum by the due date, but ideally pay the full balance so you do not pay interest. Every on-time payment gets reported to the credit bureaus and helps your score recover.

After 12 to 24 months of this, your score should improve enough that you can move to a better card. At that point, you can close the bad-credit card (or keep it open with a zero balance to help your credit mix) and use the new card for everyday spending. Your deposit comes back to you.

Frequently Asked Questions

Will getting a bad-credit card hurt my credit score?

The process itself will trigger a hard inquiry, which lowers your score by a few points for a few months. But the benefit of on-time payments over the next year or two will far outweigh that small dip. The inquiry is temporary; the payment history is permanent.

Can I use a bad-credit card to pay off existing debt?

You can, but it is usually not the best move. Bad-credit cards have high interest rates, so transferring a balance from one high-rate card to another does not help. If you have money to pay down debt, pay it directly. If you need a new card, use it for small new purchases and keep the balance low.

What if I cannot afford the deposit for a secured card?

Start with the smallest deposit you can find — some issuers accept $200 or even $100. Alternatively, look for an unsecured bad-credit card, though the interest rate will be higher. If neither is possible right now, focus on paying down existing debt and wait a few months before you try again.

How long does it take to rebuild my credit with a bad-credit card?

Most people see a noticeable improvement within 6 to 12 months of on-time payments. A 50-point increase is realistic if you keep your balance low and do not miss any payments. Larger improvements take longer — moving from 550 to 700 typically takes 18 to 24 months of consistent behavior.

Should I close my bad-credit card once I get a better one?

Not when ready. Closing it will lower your credit score because it reduces your available credit and shortens your average account age. Keep it open with a zero balance for at least a year after you get a better card, then decide based on whether the annual fee is worth paying.