Everyone should be able to get credit if they need it or want it. Thankfully, there are options for those of us with less-than-perfect credit scores. The best credit cards for bad credit offer low fees, competitive APRs, and the ability to rebuild credit through responsible credit card use.
Ironically, one of the best ways to build good credit is to use a credit card regularly and pay it off on time. However, for those of us with FICO scores between 300 and 601 (the range considered “bad credit”), getting approved for a credit card can be challenging! In order to improve your odds, you should choose from the list of best credit cards for bad credit, detailed below.
If you are looking for a credit card for low credit, you should keep a few things in mind:
- There are a lot of low-quality, high-fee products targeting people with poor credit. Avoid these!
- There’s no need to be ashamed of your credit score – an estimated 1/3rd of Americans have a FICO under 600!
- Most credit cards for poor credit will be secured credit cards, which require a deposit. We’ll explain this more in a section below.
- Before applying for a card, you should check your credit score/credit factors
We’ll list the best low credit credit cards below, but before we do, let’s go over some tips that every credit-seeker should know!
How to Monitor Your Credit
The #1 way to do this – for free – is with a tool called Credit Sesame. Credit Sesame is a 100% free tool that helps you check and monitor your credit score.
Our favorite part about this tool is that it actually helps you understand your credit score, and why it is what it is. They go over credit factors like credit utilization, number of open accounts, your payment history, and all the other factors that affect your credit score.
Credit Sesame will help you understand how to improve your credit score, and they’ll even recommend products that may make sense for your situation. It’s a completely free service (they make money from advertising), and it won’t affect your credit score to sign up.
Credit Karma is another similar tool that does essentially the same thing. See our Credit Sesame vs Credit Karma review for a comparison.
Before selecting a good credit card for poor credit, we recommend getting a handle on your credit score by signing up for one of these free tools. Click here to learn more about Credit Sesame and get your free credit score!
Note; if you sign up and find that your credit score is better than you expected (over 600 or so), you might want to check out our guide to the best credit cards for fair credit.
Secured vs Unsecured Credit Cards
On our list of best bad credit credit cards, you will notice that most of them are secured credit cards. What does that mean?
Secured Credit Cards for Bad Credit
Secured credit cards are credit cards that require a security deposit in order to be used. Typically the deposit is the same amount as the credit limit you are given. So they work like this:
- You apply for a secured credit card.
- If approved, you will need to make a deposit into a type of savings account with the issuing bank.
- Usually the deposit is the same as the credit limit. So you would make a $500 deposit, and be given a $500 credit limit.
- These funds stay locked in this account, either until you close the credit card, or until the issuer deems your credit good enough to convert it to an unsecured card, at which point the money will be sent back to you.
- The money for the deposit is yours, but you won’t be able to directly access it for a while.
So, you may ask – what’s the point of getting a secured credit card? It’s barely a “credit” card, as you have to deposit the amount of the credit limit anyways…
The answer is that secured credit cards help to build credit. Using a credit card responsibly, paying it off on time, etc. will help boost your credit profile over time. And often, for folks with low credit scores, secured credit cards are the only option.
Unsecured Credit Cards for Bad Credit
Unsecured credit cards are the typical credit cards you’re probably familiar with. You apply for one, and if approved, the issuer decides on the amount of credit they want to extend to you. Unsecured credit cards do not require a deposit of any type.
You can then make purchases on the card, and pay it off immediately or over time, based on your needs.
However, they will be harder to get approved for if you have poor credit. They also typically have higher fees, and some even have multiple fees to look out for like annual fees, monthly fees, late fees and more. In general, we don’t recommend unsecured cards for those with poor credit.
Choosing Between Secured and Unsecured Credit Cards
So, which should you choose?
If you want a credit card in order to build credit, and you have at least $200 in savings that you can afford to set aside, then we recommend a secured credit card. These typically have the lowest fees, and are the easiest to get approved for.
If you want a credit card in order to cover expenses that you can’t afford to pay off immediately, an unsecured card may be better. But watch out for the fine print, and be aware of any fees you may be responsible for!
Once you build a good credit history and have a better score, you will qualify for higher quality credit cards. All “normal” credit cards for folks with good credit are unsecured. Once you get out of the low-credit specific cards, there are fewer fees to watch out for.
Best Credit Cards for Bad Credit in 2019
Now that you know the basics of choosing the best low credit credit card, it’s time to look at actual recommendations. Below, find our top picks – divided into secured and unsecured categories.
Best Secured Credit Cards for Bad Credit
If you’re looking for a secured credit card to help you build credit, here are the top options:
Discover it Secured
Annual Fee: $0
APR: 25.24% variable
Minimum Deposit: $200
Rewards: 1% cashback on all purchases; 2% on restaurants and gas stations (on up to $1,000 in purchases per quarter).
The Discover it Secured is easily the best secured credit card for poor credit. Its hits all the important marks: no annual fee, a low minimum deposit, great approval odds, and more. It’s also one of very few rewards credit cards for bad credit – and it actually earns a fairly competitive rewards rate of 1-2%! Even better, all rewards earned in the first year are doubled!
Discover reports card usage on the Discover it Secured to all the credit bureaus, which means this card will help you build credit! Discover also starts reviewing your account after 8 months to determine whether they can refund your security deposit. If you use the card responsibly, Discover will eventually refund the deposit and you can continue to use the card (so essentially, the convert it from secured to unsecured).
The low minimum deposit is also a welcome change. It’s only a $200 minimum, when most cards require at least $500. When you apply, Discover will approve you for a certain credit limit. You can then decide how much you want to deposit, up to the amount of the limit you were approved for. You will be given a limit up to the amount of the deposit.
Bottom line – for folks looking to build up their credit scores, this is the best credit card for low credit.
Capital One Secured Mastercard
Annual Fee: $0
APR: 26.99% variable
Minimum Deposit: $49-$200, depending on credit worthiness
The Capital One Secured Mastercard is also among the best credit cards for bad credit. It has no annual fee, and a low minimum deposit. However, it does not offer any type of rewards.
All applicants who are approved will receive an initial credit limit of $200. To proceed, you’ll need to make the required security deposit, which will be $49, $99 or $200, depending on your credit worthiness. After 5 months of on-time payments, Capital One will consider raising your credit limit, without an additional deposit required.
Capital One reports activity to all the major bureaus, so you’ll start to build credit with this card. It’s not quite as good as the Discover it Secured, as it doesn’t offer any rewards. On the other hand, the Capital One Secured Mastercard has a lower security deposit for some people, although it will depend on your credit score.
Best Unsecured Credit Cards for Bad Credit
Looking for an unsecured card? Find the list of best credit cards for bad credit below.
Note: Generally unsecured cards have higher fees, and may be harder to get approved for, than secured cards. In general we recommend secured credit cards for building credit. Only consider an unsecured credit card for poor credit IF you need an emergency loan, and have no other options.
Credit One Bank Platinum Visa for Rebuilding Credit
Annual Fee: $0-$75 for the first year, and $0-$99 for following years, depending on credit worthiness
APR: 20.24% – 26.24% variable
Minimum Deposit: None, unsecured
Rewards: 1% cashback on eligible purchases (limited to certain categories)
The Credit One Bank Platinum Visa for Rebuilding Credit is among the best unsecured bad credit credit cards. Since it’s unsecured, it doesn’t require any sort of security deposit. They report to the credit bureaus, so you’ll build credit with the card.
A lot of the features of this card will vary depending on your credit score. The annual fee will be anywhere from $0 to $99, depending on your credit score. Most folks with low credit will pay up to a $75 annual fee the first year, and up to $99 annual fee the following years. The APR also varies depending on your credit.
The initial credit line will be $225-$300, depending on your credit score. Credit One offers credit line increases once you have made consistent on-time payments for some time. You’ll earn 1% cashback on a specific category of purchases.
Overall, you’ll definitely pay more with this card than you would with something like the Discover it Secured – but, you won’t be required to make a security deposit with the Credit One Platinum Visa.
Capital One Platinum (Average Credit Required)
Annual Fee: $0
APR: 26.96% variable
Minimum Deposit: None, unsecured
The Capital One Platinum card is a good option if you have average credit. It will be a bit harder to get approved for than some of the other cards on this list, but if you’re on the higher end of the low credit range, this may be a good option.
The card offers no annual fee, no monthly fees, etc. as well as automatic credit line increases as soon as 5 months in. It does not offer rewards, however. There’s also a secured version of this card (discussed above), but this one is unsecured.
Again, keep in mind that not everyone will be approved for this card, as it’s a bit more selective than something like the similarly-named (but entirely different) Credit One Bank Platinum, discussed above. But for those with the credit to be approved, it’s a superior option.
Tips for Choosing the Best Low Credit Score Credit Card For You
Now that you’ve seen our list of the best credit cards for bad credit, you’re likely almost ready to make a selection! But before you do, consider these tips:
Consider your goals & needs
Before you get a credit card, consider why you want one. Is it just to build credit? Then go with a no-annual-fee secured card like the Discover it Secured, and pay off your bill on time every month. Or, see if you can, become an authorized user (see below).
Is it to pay for emergency expenses? If so, consider any alternatives you might have. Talk to your bank about a personal loan, or see if you can get a loan from friends or family. Most unsecured credit cards are a poor choice for emergency loans, as they offer small credit lines and very high fees/interest charges.
An authorized user is an individual that is added to another person’s credit card account. They are issued their own card, and can make purchases using it. The upside is that authorized users can benefit from the credit history and score of the account owner.
If your goal is to boost your credit and you don’t really need to actively utilize credit for purchases, becoming an authorized user might make sense. If you have someone in your life (think a spouse, long-term partner, parent, etc.) that trusts you and would be willing to add you as an authorized user, this may help you boost your credit score significantly. However, there are some things to keep in mind – read this article to learn more.
Stick to secured credit cards if you can
We discussed this in more detail above, but the bottom line is this: secured credit cards are far superior to unsecured cards in most situations. Secured cards usually have no annual fee/a very low fee, and offer better perks. If you can afford the security deposit and don’t need to use the card for emergency expenses, secured cards are the way to go.
Watch the fine print
You should know that many credit cards for poor credit are aggressively marketed as good options – but they are really quite terrible options! Some low-credit score credit cards have annual fees on top of monthly fees, inactivity fees, late fees, and fees for just about everything else! Avoid these cards at all costs, and be sure to read the fine print before you apply for any credit card.
So there you have it – a selection of the best credit cards for poor credit, along with ample information to help you decide. To conclude, we’d like to remind our readers that using credit cards can be a slippery slope if you get behind on payments. Be sure to practice responsible credit card use, and pay your card balance off on time every month!
If you don’t think you can use credit responsibly, it may be best to just avoid credit cards altogether. There are other alternatives you can explore that may be better options.
If you have any questions, leave a comment below and we will be happy to help!