You can get a credit card with bad credit, but the terms will be less favorable than cards for people with good credit
Banks and card issuers do approve people with low credit scores, but they manage their risk by charging higher interest rates, requiring a cash deposit, or both. The most common routes are secured credit cards (where you put down a deposit that becomes your credit limit), credit-builder cards (designed specifically to help you rebuild), and subprime cards (unsecured cards for people with poor credit history). Each has different costs and requirements. Your credit score alone does not disqualify you — your recent payment history, the reason your score is low, and how much debt you already carry matter just as much.
Key Takeaways
- Secured cards require a cash deposit (usually $200 to $2,500) that acts as your credit limit, and most convert to unsecured cards after 12 to 24 months of on-time payments.
- Subprime cards charge annual fees ($39 to $99) and interest rates of 24% to 36%, so carrying a balance costs significantly more than with a standard card.
- Credit-builder cards often have no annual fee but may charge monthly fees ($5 to $15) and come with low credit limits ($300 to $500).
- You will need to provide proof of income and a valid ID; some issuers also check your bank account history to assess risk.
- Using the card responsibly — paying the full balance or at least the minimum on time every month — is what rebuilds your score, not straightforward having the card.
Secured cards: putting down a deposit to get approved
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 credit card — make purchases, receive a bill, and pay it back. The deposit sits untouched unless you stop paying your bill.
Secured cards are the easiest route if your credit score is very low (below 550) or if you have been denied by other issuers. Most require a deposit between $200 and $2,500. After 12 to 24 months of on-time payments, the issuer typically converts the card to an unsecured card, returns your deposit, and raises your credit limit. Some issuers, like Capital One and Discover, have a track record of converting secured cards to unsecured ones; others do not, so ask before you explore.
The downside is that you are tying up cash. If you deposit $500, that money is not available to spend or invest elsewhere. Interest rates on secured cards are still higher than standard cards (usually 18% to 24%), so carrying a balance costs more. Annual fees range from $0 to $95, depending on the issuer.
Subprime cards: unsecured but expensive
Subprime cards do not require a deposit — they are unsecured. But they come with steep costs. Annual fees typically run $39 to $99, and interest rates are 24% to 36%. If you carry a $500 balance at 30% APR, you pay roughly $12.50 per month in interest alone.
Subprime cards are useful if you do not have $200 to $500 to deposit for a secured card, or if you need a higher credit limit when ready. Credit limits usually start at $300 to $500 and may increase after six months of on-time payments. However, the high interest rate means subprime cards are most useful if you plan to pay off your balance in full each month. If you carry a balance, the interest charges will slow your ability to rebuild credit and may push you further into debt.
Common subprime issuers include Credit One Bank, Milestone, and Indigo. Read the fine print carefully — some charge monthly fees on top of annual fees, and some charge fees just for going over your limit or making a late payment.
Credit-builder cards: low limits and monthly fees
Credit-builder cards are designed by nonprofits and fintech companies to help people rebuild credit without the high interest rates of subprime cards. They typically have no annual fee but charge a monthly fee ($5 to $15) that is added to your bill. Your credit limit is usually $300 to $500.
The monthly fee model means you pay a predictable cost regardless of whether you use the card. If you pay $10 per month for 12 months, you pay $120 in fees. That is less than a subprime card's annual fee plus interest, but only if you do not carry a balance. Interest rates on credit-builder cards are lower than subprime cards (typically 18% to 22%), but still higher than standard cards.
Credit-builder cards work best if you can use the card for small purchases and pay the full balance each month. Issuers like Self, Petal, and Mission Lane offer credit-builder products. Some require you to link a bank account so they can verify your income and payment history before approval.
What issuers look for beyond your credit score
Your credit score is one data point. Issuers also examine your recent payment history (the last 12 to 24 months matter more than older negative marks), your current debt load, and your income. If you have missed payments in the last six months, approval is harder. If you have no recent missed payments but a low score from old debt, you have a better chance.
Most issuers require proof of income — a recent pay stub, tax return, or bank statements showing regular deposits. Some ask for your employment history. If you are self-employed or have irregular income, you may need to provide bank statements covering three to six months to show consistent deposits. A few issuers, particularly fintech companies, also review your checking account history to see whether you overdraft frequently or maintain a positive balance.
If you have been denied by one issuer, do not explore to five others when ready. Each process triggers a hard inquiry on your credit report, and multiple inquiries in a short time can lower your score further. Wait at least two weeks between applications, and focus on issuers known to work with lower credit scores.
How to rebuild credit once you have the card
Getting approved is the first step. Rebuilding your credit score depends on what you do with the card. The most important factor is payment history — paying on time, every time, for at least six months. Set up automatic payments for at least the minimum due, or better yet, the full balance. One late payment can erase months of progress.
Keep your balance low relative to your credit limit. If your limit is $500 and you carry a $400 balance, your credit utilization is 80%, which hurts your score. Aim to use no more than 30% of your limit. With a $500 limit, that means keeping your balance at $150 or below. This is why secured and credit-builder cards with low limits can actually help — a $300 limit makes it easier to stay under 30% utilization than a $5,000 limit you might max out.
Do not close the card after your score improves. Closing it reduces your available credit and can lower your score. Instead, keep it open and use it occasionally for a small purchase you pay off when ready. After 12 to 24 months of responsible use, your score should improve enough to may have access to for better cards with lower rates and no annual fees.
Comparing the three routes side by side
| Card Type | Deposit Required | Annual Fee | Interest Rate | Best For |
|---|---|---|---|---|
| Secured | $200–$2,500 | $0–$95 | 18%–24% | Very low credit scores; you have cash to deposit |
| Subprime | None | $39–$99 | 24%–36% | No deposit available; need higher limit when ready |
| Credit-Builder | None | None (but $5–$15/month) | 18%–22% | Predictable monthly cost; plan to pay in full |
Frequently Asked Questions
Will getting a credit card with bad credit make my score worse?
The process itself causes a small, temporary drop (usually 5 to 10 points) from the hard inquiry. But once you have the card and use it responsibly, your score will improve. The new account and payment history outweigh the initial inquiry within a few months.
Can I get a credit card if I have been denied before?
Yes. Denials are common with bad credit, and they do not permanently block you. Wait at least two weeks before reapplying, and try a different issuer known to work with lower scores. Secured cards have the highest approval rates because the deposit reduces the issuer's risk.
What if I cannot afford the deposit for a secured card?
A credit-builder card or subprime card does not require a deposit. Credit-builder cards charge monthly fees instead, while subprime cards charge annual fees and higher interest. Compare the total cost over 12 months to decide which fits your budget.
How long does it take to rebuild my credit with a new card?
Most people see a 50 to 100 point improvement within six months of on-time payments. Larger improvements take 12 to 24 months. The timeline depends on what caused your low score — recent missed payments take longer to recover from than old debt.
Should I carry a balance to build credit faster?
No. Carrying a balance does not build credit faster; it just costs you money in interest. On-time payments build credit, not the size of your balance. Pay in full or as much as you can afford, and your score will improve just as quickly without the interest charges.