You can get a credit card with bad credit, but you'll pay more and have lower limits
Banks and card issuers do approve people with damaged credit histories. They do this because they price the risk into the card itself—higher interest rates, annual fees, lower credit limits, and stricter terms. Your job is to find which cards actually approve people in your situation and understand what you're paying for the privilege.
The cards that work for bad credit fall into three categories: secured cards (you put down a cash deposit), cards designed specifically for rebuilding credit (higher fees, lower limits), and occasionally a mainstream card if your credit damage is old enough. The fastest approval usually comes from secured cards, because the deposit removes most of the issuer's risk.
Before you apply anywhere, pull your credit report from all three bureaus at annualcreditreport.com. This is free and does not hurt your score. Look for errors—wrong accounts, accounts that should be closed, late payments that aren't yours. Dispute anything wrong before you apply, because a corrected report improves your odds and the terms you'll get.
Key Takeaways
- Secured cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and most approve people with bad credit because the deposit covers the risk.
- Unsecured cards designed for bad credit exist but charge annual fees ($39 to $99), higher interest rates (20% to 36%), and offer low limits ($300 to $500).
- Your credit report may contain errors that are hurting your score; checking annualcreditreport.com and disputing mistakes before you apply can improve your approval odds.
- Every application triggers a hard inquiry that temporarily lowers your score, so apply to only one or two cards at a time and space applications weeks apart.
- After approval, using the card responsibly—paying the full balance or keeping utilization below 30%—is what actually rebuilds your credit over 6 to 12 months.
Secured cards: the fastest path when your credit is very low
A secured credit card requires you to deposit cash with the issuer. That deposit becomes your credit limit. If you deposit $500, your limit is $500. You use the card like any other card, and the deposit sits in a separate account as collateral—the issuer keeps it if you don't pay your bill.
Secured cards approve people with credit scores below 550 because the issuer's risk is nearly zero. The deposit covers them. You pay interest on what you charge (usually 18% to 24%), and sometimes an annual fee ($0 to $50), but approval is nearly automatic if you have a bank account and a deposit to put down.
Common secured cards include the Capital One Secured Mastercard, the Discover it Secured Card, and the OpenSky Secured Visa. Each has different deposit minimums, annual fees, and interest rates. Compare them on the issuer's website before you apply. Some cards graduate you to an unsecured card after 6 to 18 months of on-time payments and return your deposit; others do not, so read the terms.
The deposit is not a fee—you get it back when you close the account or graduate to an unsecured card. But it is money you cannot use for anything else while the card is open, so only deposit what you can afford to lock away.
Unsecured cards for bad credit: higher cost, no deposit required
Some issuers offer unsecured cards to people with bad credit. You do not put down a deposit, but you pay for the risk in other ways: annual fees of $39 to $99, interest rates of 20% to 36%, and credit limits of $300 to $500.
Cards in this category include the Credit One Bank Visa, the Milestone Mastercard, and the Indigo Mastercard. They are easier to get than mainstream cards, but they cost more than secured cards over time because the annual fee is mandatory whether you use the card or not. A secured card with a $500 deposit and no annual fee is usually cheaper than an unsecured card with a $99 annual fee and a $500 limit.
The exception is if you cannot save a deposit. If you have $99 but not $500, an unsecured card is your only option. But if you can save the deposit, a secured card is the better deal.
What happens when you apply: the hard inquiry and approval timeline
When you apply for any credit card, the issuer pulls your credit report. This is called a hard inquiry, and it temporarily lowers your credit score by 5 to 10 points. The impact fades after a few months, but multiple hard inquiries in a short time can drop your score significantly.
Apply to only one or two cards at a time. Wait at least two to four weeks between applications. This spreads out the inquiries and gives your score time to recover between them. If you apply to five cards in one week, your score will drop 25 to 50 points, and the next issuer will see that damage and may deny you or offer worse terms.
Approval for a secured card usually comes within one to three business days. Unsecured cards for bad credit take three to seven business days. Once approved, the card arrives in the mail within 7 to 14 days. For secured cards, you fund the deposit after approval, either online or by mailing a check.
Building your credit after approval: what actually matters
Getting the card is the first step. Rebuilding your credit is the second, and it requires consistent behavior. The card issuer reports your payment history to the three credit bureaus—Equifax, Experian, and TransUnion. If you pay on time and keep your balance low, those bureaus update your credit profile every month.
Pay at least the minimum payment on time, every month. Late payments damage your score more than anything else. Set up automatic payments for the minimum if you struggle to remember. Better yet, pay the full balance each month—this costs you no interest and shows lenders you can manage credit responsibly.
Keep your balance below 30% of your limit. If your limit is $500, keep your balance under $150. This is called credit utilization, and it accounts for about 30% of your credit score. High utilization signals to lenders that you are relying too heavily on credit, even if you pay on time.
After 6 to 12 months of on-time payments and low utilization, your score will improve. You may then may have access to for better cards, a credit limit increase, or a graduation to an unsecured card. Do not close the card once you upgrade—keeping it open with a $0 balance helps your score by showing a long credit history and low utilization.
Mistakes to avoid when applying with bad credit
Do not apply for multiple cards in one week. Each application is a hard inquiry, and multiple inquiries in a short time will lower your score and make other issuers less likely to approve you. Space applications out by at least two to four weeks.
Do not ignore errors on your credit report. If you see accounts you do not recognize, late payments that are not yours, or accounts that should be closed, dispute them with the bureau before you apply. Errors can be the reason your credit is bad, and fixing them improves your odds.
Do not max out the card immediately. A new card with a high balance signals financial stress to lenders and damages your score. Use the card for small purchases you would make anyway, then pay the balance down.
Do not miss a payment. One late payment can undo months of good behavior and will stay on your report for seven years. If you cannot pay the full balance, pay at least the minimum on time. If you are about to miss a payment, call the issuer and ask about a hardship program—some will work with you.
When mainstream cards might work instead
If your credit damage is old—five years or more—you may may have access to for a mainstream card even with a low score. Issuers care more about recent behavior than old damage. If your last late payment was in 2019 and you have paid on time since, some cards will approve you.
Check your credit score first. If it is above 620, try a mainstream card before a secured or bad-credit card. Mainstream cards have lower interest rates, no annual fees, and higher limits. If you are denied, you can then move to a secured card. But if you are approved, you save money immediately.
You can check your score free through your bank, your credit card issuer, or services like Credit Karma and Experian. These checks do not hurt your score because they are soft inquiries, not hard inquiries.
Frequently Asked Questions
Will applying for a credit card hurt my credit score?
Yes, each application triggers a hard inquiry that lowers your score by 5 to 10 points. The impact fades after a few months. Multiple applications in a short time cause larger damage, so apply to only one or two cards and wait weeks between applications.
What's the difference between a secured card and a prepaid card?
A secured card is a credit card backed by a deposit. You build credit history because the issuer reports your payments to the credit bureaus. A prepaid card is not a credit card—it is a spending account you load money into. Prepaid cards do not build credit because issuers do not report to the bureaus.
Can I get my deposit back if I close the secured card?
Yes, the deposit is yours. When you close the account or graduate to an unsecured card, the issuer returns the deposit to your bank account. It usually takes 7 to 10 business days. The deposit is not a fee—it is collateral.
How long does it take to rebuild credit with a new card?
You will see improvement within 6 to 12 months of on-time payments and low utilization. Your score will not jump overnight, but each month of good behavior adds points. Old damage stays on your report for seven years, but its impact weakens over time as newer, positive information accumulates.
What if I am denied for a secured card?
Denial is rare because the deposit removes most risk. If you are denied, ask the issuer why. Common reasons are a bank account issue, a very recent bankruptcy, or fraud on your report. Fix the issue if you can, then apply again in 30 days. If you cannot get a secured card, a credit-builder loan from a credit union may work instead.