Having a low or bad credit score can feel like a major obstacle when you need a credit card. However, there are plenty of financial products designed specifically to help you rebuild credit and regain financial control. In this article, we’ll cover everything you need to know about credit cards for bad credit — including what they are, the types available, how to apply, and tips for using them responsibly to boost your credit score.
1. What Is Bad Credit?
- In the U.S., a credit score below 580 (on a 300–850 scale) is usually considered “bad credit.”
- Bad credit can result from missed payments, defaulted loans, or high credit utilization ratios.
- With bad credit, it’s harder to qualify for traditional unsecured credit cards, loans, or favorable interest rates.
2. Why Credit Cards for Bad Credit Matter
- Credit Building: These cards give you a second chance to prove your creditworthiness.
- Accessible Approval: Many are secured cards requiring a refundable deposit rather than a perfect credit history.
- Financial Flexibility: Even with a low limit, having a credit card can help cover emergencies and build a positive payment history.
3. Main Types of Credit Cards for Bad Credit
A) Secured Credit Cards
- Require a refundable security deposit, typically $200–$500.
- Credit limit often equals the deposit.
- Payments are reported to major credit bureaus, helping rebuild credit scores.
Benefits:
- Easier approval
- Lower annual fees compared to unsecured subprime cards
- Path to upgrade to an unsecured card
B) Unsecured Credit Cards for Bad Credit
- Do not require a deposit.
- Often come with higher interest rates (APR) and fees.
- Good for those who can’t afford a deposit but want to rebuild credit.
Benefits:
- No upfront cash needed
- Immediate access to a small credit limit
- Builds credit when used responsibly
C) Store Credit Cards
- Offered by retail chains (e.g., department stores, gas stations).
- Easier approval criteria than general-use cards.
- Typically low limits but a stepping stone to credit rebuilding.
4. Best Practices for Using Credit Cards for Bad Credit
- Always Pay on Time:
On-time payments have the biggest impact on your credit score. - Keep Utilization Low:
Use no more than 30% of your credit limit at any time. - Understand Fees and APR:
Read the terms carefully before applying. - Check Annual Fees:
Some cards charge high annual fees; compare offers to find low-cost options. - Monitor Your Credit Score:
Track your progress monthly to see how your actions improve your score.
5. Top Credit Cards for Bad Credit in 2025 (Examples)
Note: The cards below are examples. Always check the issuer’s website for the latest terms and eligibility.
| Credit Card | Type | Security Deposit | Annual Fee | Key Features |
|---|---|---|---|---|
| OpenSky® Secured Visa® | Secured | $200–$300 | $35 | Reports to all three credit bureaus |
| Discover it® Secured | Secured | $200 | $0 | Cashback + free FICO score |
| Capital One Platinum Secured | Secured | $49–$200 | $0 | Gradual credit line increases possible |
| Credit One Bank® Platinum | Unsecured | None | $39–$99 | Approval even with bad credit |
| Petal 1 “No Annual Fee” Visa® | Unsecured | None | $0 | Uses alternative underwriting for approval |
6. Factors to Consider Before Choosing a Card
- APR (Annual Percentage Rate): Lower is better.
- Fees: Check annual fees, late fees, balance transfer fees, and foreign transaction fees.
- Credit Bureau Reporting: Ensure the card reports to all three major bureaus — Experian, Equifax, and TransUnion.
- Upgrade Potential: Does the card allow you to move to an unsecured version after good behavior?
- Rewards & Perks: Some secured cards now offer cashback or points.
7. How to Use a Credit Card to Rebuild Your Credit
- Set Up Auto-Pay: Never miss a due date.
- Limit Applications: Too many hard inquiries can further damage your score.
- Keep Old Accounts Open: Longer credit history helps your score.
- Diversify Your Credit Mix: Consider pairing a credit card with a small installment loan.
- Check Credit Reports for Errors: Dispute inaccuracies immediately.
8. Common Mistakes to Avoid
- Paying Only the Minimum: Leads to high interest charges.
- Maxing Out the Card: High utilization lowers your score.
- Closing Cards Too Soon: This shortens your credit history.
- Ignoring Fees and Interest Rates: Hidden charges can negate the benefits of rebuilding credit.
9. FAQs – Credit Cards for Bad Credit
Q1: Can I get a credit card with bad credit and no deposit?
Yes, unsecured subprime cards exist, but they often have higher APRs and fees.
Q2: How long does it take to rebuild credit using these cards?
With consistent on-time payments, you may see improvements within 6–12 months.
Q3: Should I get multiple cards?
Start with one or two cards. Adding too many can hurt your score with multiple hard inquiries.
Q4: Can a secured card become unsecured?
Yes, many issuers automatically upgrade you after responsible usage.
10. Conclusion
“Credit Cards for Bad Credit” are a lifeline for individuals with low credit scores who want to rebuild their financial reputation. By choosing the right card, paying on time, and keeping your utilization low, you can gradually improve your creditworthiness and unlock better financial opportunities in the future.
