Best credit cards for bad credit

Bad credit cards are easy to qualify for and help rebuild credit. We have compiled a list of the best credit cards for you.

Final Verdict

Even if you have bad credit, you still have access to a variety of credit points. The credit cards on this list are for people who want to fix bad credit or build credit in the first place. Discover it Secured is our top pick for best credit card for bad credit and best credit card for cashback. It wins because it has no annual fee, pending rewards for a secured credit card, and the ability to upgrade to an unsecured card if you meet eligibility criteria after a period of responsible use. The Discover it Student Cash Back card is another great option designed specifically for students looking to build their bankroll.

Compare the best credit cards for bad credit

Editorial selection of the best credit cards for bad credit

Discover it Safely

Best overall, best for cash back

Discover it Secured is our top choice for anyone looking to repair their credit. There’s no annual fee, an excellent rewards program, and the ability to upgrade to an unsecured card.

Read the full Discover it Secured review.

Discover it Student Cash Back

Best for students

Those just starting their credit journey should check out the Discover it Student Cash Back card. With excellent acceptance, no annual fee and relatively low interest rates, it is a great fit for the student market.

Read the full Discover it Cash Back student review.

nSecured rewards credit card

Reasonable APR, $0 fees

A solid secured credit card for Navy Federal Credit Union members looking to build or repair their credit. This card offers low fees and a reasonable long-term APR to keep you on track.

SKYPASS Visa Secured Card

Travel Rewards

Designed for US citizens and foreign workers who want to build their credit while earning travel rewards. This card comes with a $50 annual fee, but the 5,000-mile bonus after the first purchase may justify it.

Read the full SKYPASS Visa Secured Card review.

BankAmericard Secured Credit Card

account features

BankAmericard Secured Credit Card is a secured card with no annual fee and access to free FICO scores. While it doesn’t offer a rewards program or bonus, it does offer automatic verification that allows some cardholders to retrieve their deposit.

Read the full BankAmericard Secured Credit Card Review.

Capital One Platinum credit card

Unsecured

An unsecured card with no annual fee, no foreign transaction fees and no penalty APRs. The Capital One Platinum credit card also offers an automatic credit line check to get a higher credit limit in just six months.

Read the full Capital One Platinum credit card review.

Wells Fargo Business secured credit card

company

For those with poor credit who are looking for a secure business credit card, Wells Fargo offers business owners the opportunity to build their personal and business credit. With no annual fee and the ability to earn cashback rewards, this card is also a great option for those looking to build their credit history.

Read the full Wells Fargo Business Secured Credit Card Review.

What to look for in a credit card with bad credit

While credit cards designed for those with bad or bad credit generally don’t come with the same generous terms as those offered to lower-risk consumers, there are still some important characteristics to look for when reviewing options and choosing one application should be considered.

• Report to all three credit bureaus: You want to find a card that reports to all three credit bureaus (Equifax, Experian, and TransUnion). This will help you build your balance over time provided you keep up with your payments.
• No annual fee (or a very low one): There are many cards that don’t have an annual fee, although secured credit cards generally require a deposit.
• Minimum Deposit: Most secured credit cards require a minimum deposit of around $200 or $300.
• Low Credit Requirements: If you have bad credit, it is important that you find a credit card with a credit requirement that will allow you to be approved.
• Monthly Credit Score: This has become a common feature provided via billing statements or on the issuer’s website. Seeing your score increase over time can be invaluable in providing feedback on your performance and encouragement to keep going.
• An automatic way to switch from a secured card to an unsecured one: Many secured card issuers will automatically review your account after a period of on-time payments to see if you’re eligible for an upgrade to an unsecured card with more favorable terms.

How many people have bad credit?

As noted above, FICO credit scores range from 300 to 850. According to credit bureau Experian, as of 2021, about 16% of Americans had a FICO-rated very bad credit score (a score below 580), while another 17% had one fair or subprime credit had credit (a score between 580 and 669).

The full distribution of how Americans fall into the point ranges is below:

How to improve your credit score with a credit card

There are several ways to use a credit card to improve your credit score, including:

• Correct any errors on your credit report: It is important to monitor your credit report so that you can quickly correct any errors that may occur.
• Reporting to major credit bureaus: Using a credit card that reports to the three major credit bureaus (Equifax, Experian, and TransUnion) helps show you’re on the right track.
• Always make your payments on time: Late or missed payments are not good for your credit score. Therefore, try to always make your payments on time.
• Limit credit card applications: Although you may need to open a new credit card to start repairing your balance, you should limit the number of applications. Every time you apply for a loan, a tough loan request can be made, which can affect your credit score.
• Maintain a low credit utilization rate: Try to keep your credit utilization rate below 30%. Credit utilization is a variable that goes into calculating your credit score. Keeping it low allows you to manage your bankroll. You can keep your rate low by making frequent payments.
• Use a Secured Credit Card: If you don’t have good credit and want to improve your score, a secured credit card is a good tool to help you with that. A secured card is backed by a cash deposit, which is usually the card’s credit limit.

What is bad credit?

Bad credit is generally defined in terms of a person’s creditworthiness. The most widely used credit score is the FICO score. FICO scores range from 300 to 850. Bad credit is generally considered to be anything 579 or below. A reasonable credit score is between 580 and 669. Bad credit is often caused by things like not paying your bills on time or not paying off a loan. Bad credit can make it difficult to get a credit card or get a loan.

What Causes Bad Credit?

Bad credit can be caused by several factors, including:

• Maximize your credit cards
• Late bill payments
• Missed Payments
• default of a loan
• Account go to Collections
• foreclosure of your home
• declare bankruptcy

How do you know you have bad credit?

The only way to be sure if you have bad credit is to check your credit history. There are free sources for checking your score online that only require the last four digits of your social security number. An indicator of bad credit is a FICO score between 300 and 579. FICO rates this score as very poor. A value between 580 and 669 is considered fair. If you don’t know your current credit score, you can visit AnnualCreditReport.com for a free credit report. Checking your credit score will not affect your credit score.

What if you have bad credit?

Bad credit means you have significantly less access to any type of credit, and any loan or credit card you qualify for will be much more expensive in terms of interest rates and fees. Other credit card features commonly offered to people with better credit histories, such as APR bonuses and promotions are unlikely to be available.

Credit scores also serve as an indicator of trustworthiness in our society and are sometimes used by employers, landlords, wireless service providers and insurance companies to determine how much risk you represent. They can set their prices accordingly or refuse to do business with you altogether.

How can you recover from bad credit?

No matter how bad your credit score is, there’s almost always a way to steer things in a better direction. Building a positive credit history can take time, but it is entirely possible with responsible borrowing and a little patience. Simply avoiding behaviors that lead to bad credit can go a long way. Other things you can do to recover from bad credit are:

• Check Your Credit Report: Visit AnnualCreditReport.com for a free credit report. Take some time to review your report to see if there is any incorrect information or fraudulent activity. If so, these errors can be corrected by contacting the lender or card issuer. The positive effects on your credit score should become apparent quickly.
• Build credit: If you can’t get a regular credit card, look into a secured credit card. If you can show that you can pay your bill on time for an extended period of time, the issuer can upgrade you to a regular card and refund your deposit.
• Responsible use of credit: Once you have a credit card, you can start repairing your credit, but use the card, keep your credit utilization below 30%, and always pay your bills on time (and in full if possible).

What Types of Credit Cards Are Easiest to Approve?

Card issuers never promise to approve anyone’s application, regardless of their credit rating. However, issuers have developed card products for various market segments, including the subprime market for people with bad (or no) credit. As mentioned above, if you need to deposit some cash with the card issuer, secured cards can be a good place to start. These cards typically report to all three major credit bureaus, which can help you build a solid credit score

Another option that doesn’t require a deposit is to apply for one or more credit cards from national retailers like Sears, Target, Kohls, or Best Buy. These types of cards can only be used at their respective merchants, unlike cards issued by banks that display the Visa or Mastercard logo or that are issued directly through Discover or American Express and can be used anywhere they are Credit cards accepted. However, store credit cards should only be viewed as a stepping stone to building credit as they typically have very small lines of credit and charge high interest rates.

While there are numerous unsecured Visa and Mastercard options aimed at those with bad credit, they can be an unnecessarily expensive option. These types of cards usually have limited credit lines, very high interest rates, and numerous fees. The Credit Card Accountability, Responsibility, and Disclosure Act of 2009, also known as the CARD Act, attempted to control these abusive products (sometimes referred to as fee harvester cards) by banning any annual fee exceeding 25% of the credit limit. However, issuers have gotten around this by exploiting a loophole that allows them to charge processing fees that are as bad or worse than previously predatory annual fees. So, buyers beware of these types of subprime cards.

Can I still get a credit card if I have bad credit?

Yes, you can still get a credit card if you have bad credit. While your credit card options are more limited, there are still many cards to choose from. Bad credit cards are cards that are usually easy to qualify for and can help you rebuild your credit. Some of the credit cards you can apply for if you have bad credit are:

• Secured Credit Cards: A secured credit card is a credit card that is secured by a cash deposit required at account opening. The deposit is held as collateral until the account is closed. Secured credit cards are a good choice for those looking to rebuild or repair their credit because payments are reported to the credit bureaus.
• Unsecured Credit Cards: An unsecured credit card is a form of unsecured debt. No cash deposit is required. Most regular credit cards are unsecured credit cards. You still have access to some unsecured bad debt credit cards, but these often come with higher fees and can be more difficult to approve than a secured credit card.
• Business Credit Card: A business credit card is a credit card that can only be used in a specific store or group of related stores. Store credit cards can be good for people looking to build or repair their credit since they typically don’t come with annual fees and accept those with lower credit scores.

What do I do if my application is rejected?

Your credit card application may be declined for a variety of reasons. For example, if you have too much debt, if you have no or limited credit history, or if your credit score is too low to qualify you for that particular card.

If you apply for a credit card and your application is denied, you can do the following:

• Read your rejection letter: Here you can find out why your application was rejected.
• Check Your Credit Report: If you haven’t already checked your credit report, now is the time to do so. This can give you some insight as to why your application was denied. There may be an error on your credit report that needs to be corrected.
• Work to repair your credit: Fix mistakes, make sure you make all other debt payments on time, and keep your credit utilization low.
• Give it some time: if you get rejected, don’t reapply the next day. Take some time to understand why you were denied and work on repairing your credit so you have a better chance of future approval.
• Apply for a different card: Depending on why you were declined, you can probably apply for a different card that better matches your credit rating.

Can you transfer bad credit balances?

Unfortunately, few, if any, credit cards designed for people with bad credit allow for balance transfers, particularly at rates that would prove beneficial. If you find one, it might make sense to transfer your balance if your current card charges penalty rates of 36%, for example, and you can move the money to a card that charges a mid-range 20% rate. While this rate would still be high, it could save you money in interest costs (not counting the likely 5% transfer fee) if the new issuer can provide a large enough line of credit to absorb the transfer. However, before you consider a balance transfer,

How long does it take to rebuild a loan?

Correcting errors on your credit report can pay off in a matter of months. Other credit behaviors, like paying your bills on time, may take longer to improve your score. Additionally, it can take up to a decade for some aspects of your credit history, such as bankruptcies or chargeoffs, to disappear from your report. According to Experian, the following actions can impact creditworthiness during these general timeframes.

Source: Experian Information Solutions

methodology

To get to our list of the best credit cards for bad credit, we filtered our list of nearly 300 credit cards for cards that accept applications from people with a credit score below 600. From this list, we then objectively selected the best cards in each subcategory based on their star ratings and feature quality. A weighted algorithm was used to determine which cards go into our final list.

When choosing the best credit cards for bad credit, we considered variables including the card’s fees, whether it charged a reasonable interest rate, and whether the card offered any rewards. We also looked at card security and whether the card issuer offers solid customer service. Our methodology also included continuously monitoring credit card issuer data to ensure we were providing the most up-to-date rankings.

MEET OUR CREDIT CARD EXPERTS

Ben Woolsey is Investopedia’s Associate Editorial Director for financial products and services, including credit cards. He has over 30 years of experience in the financial services industry, including marketing for banks and financial institutions such as Associates First Capital and Bank One. Prior to Investopedia, he managed credit card content for CreditCards.com and Bankrate.com.