Yes, you can get a credit card with bad credit, but your options are limited and the terms will be less favorable than cards for people with good credit.
Banks and card issuers use your credit score and history to decide whether to approve you and what interest rate to charge. A low score signals to them that you have missed payments, carried high balances, or had accounts sent to collections in the past. That risk means they will either turn you down or offer you a card with a higher interest rate, lower credit limit, and annual fees.
The cards available to you fall into two categories: secured cards, which require a cash deposit, and unsecured cards for bad credit, which do not. Secured cards are easier to get approved for because the deposit protects the issuer if you default. Unsecured bad-credit cards exist but come with steeper fees and rates.
Your approval odds improve if you have a steady income, a bank account in good standing, and no recent late payments or collections activity. Some issuers also look at whether you are an existing customer or whether you have a co-signer.
Key Takeaways
- Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and they are the most common path to approval with bad credit.
- Unsecured bad-credit cards exist but typically charge annual fees of $25 to $100 and interest rates of 25% or higher.
- Your credit score is not the only factor issuers consider; they also review income, employment history, existing bank accounts, and recent payment behavior.
- Even after approval, your credit limit will be low—usually $300 to $1,000—and you may face additional fees for late payments or exceeding your limit.
- Making on-time payments and keeping your balance low will gradually improve your score and may allow you to move to a better card within 12 to 24 months.
How Secured Cards Work and Why They Are Easier to Get
A secured credit card requires you to deposit money into a savings account held by the card issuer. That deposit amount becomes your credit limit. If you deposit $500, you get a $500 credit limit. You then use the card like any other credit card—make purchases, receive a bill, and pay it back each month.
The deposit stays in the account and earns little or no interest. It is not used to pay your bill; you pay your bill from your regular income, just as you would with any card. The deposit is collateral. If you stop paying your bill, the issuer can take money from the deposit to cover what you owe.
Because the issuer's risk is lower, secured cards approve people with credit scores in the 500 to 650 range—scores that would be rejected for unsecured cards. You still need to show income and have a bank account, but the deposit does much of the work for you.
Most secured cards charge an annual fee of $0 to $50. Interest rates typically run 18% to 24%, which is high but lower than unsecured bad-credit cards. After 12 to 24 months of on-time payments, many issuers will convert your card to an unsecured card and return your deposit.
Unsecured Bad-Credit Cards and Their Costs
Some issuers offer unsecured cards to people with bad credit—cards that do not require a deposit. These are harder to get approved for than secured cards, but they exist.
The trade-off is cost. Unsecured bad-credit cards often charge annual fees of $25 to $100, sometimes more. Interest rates run 25% to 36% or higher. Some cards also charge a one-time processing fee ($50 to $150) just to open the account. Late fees, over-limit fees, and foreign transaction fees add up quickly.
Your credit limit will be low—often $300 to $500—and the issuer may require you to pay a deposit anyway, which defeats the purpose of calling it unsecured. Read the fine print carefully. Some cards marketed as unsecured are actually semi-secured or require a deposit for approval.
Unsecured bad-credit cards make sense only if you cannot save a deposit for a secured card or if you need a card urgently and secured cards are not available to you. The fees and interest make them expensive to carry a balance on.
What Issuers Look for Beyond Your Credit Score
Your credit score is important, but it is not the only thing issuers review. They also look at your income, employment history, and whether you have an active bank account. Some issuers pull a soft inquiry (which does not affect your score) to see if you are already a customer or whether you have accounts with them in good standing.
Recent payment behavior matters more than old negative marks. If you had a late payment two years ago but have paid on time for the last 18 months, your odds of approval are better than if you had a late payment three months ago. Collections accounts and charge-offs that are recent (within the last year) are harder to overcome.
Employment stability helps. Issuers want to see that you have been at your current job for at least a few months, though some will approve you with less. Self-employed applicants may need to provide tax returns or bank statements to prove income.
A co-signer—someone with good credit who agrees to pay your bill if you do not—can improve your odds of approval for an unsecured card, but co-signers are rare in the bad-credit card market. Most bad-credit cards do not allow them.
The Application Process and What Happens After Approval
Applying for a bad-credit card is straightforward. You fill out an online form or visit a branch and provide your name, address, income, employment information, and Social Security number. The issuer will pull a hard inquiry on your credit report, which temporarily lowers your score by a few points.
For a secured card, you will also need to fund your deposit. Most issuers let you do this online or by mail. The deposit must clear before your card is activated, which usually takes 3 to 7 business days.
After approval, your credit limit will be set—typically $300 to $1,000 for bad-credit cards. You will receive your card in the mail within 7 to 14 days. Some issuers offer a temporary card number you can use online while you wait for the physical card.
Once you have the card, use it carefully. Make small purchases and pay them off in full each month, or pay down your balance to keep your utilization ratio below 30%. This behavior is reported to the credit bureaus and will gradually improve your score. Issuers also monitor your account for late payments and over-limit activity, which can result in additional fees and a higher interest rate.
Building Credit and Moving to a Better Card
The goal of a bad-credit card is not to keep it forever—it is to use it as a stepping stone to better cards and lower rates. After 12 to 24 months of on-time payments, your credit score should improve enough to may have access to for a standard card with better terms.
During this time, keep your balance low and never miss a payment. Set up automatic payments for at least the minimum due, or better yet, pay the full balance each month. Every on-time payment is reported to the three credit bureaus (Equifax, Experian, and TransUnion) and helps rebuild your score.
Once your score reaches 650 or higher, you can start looking at standard cards. You may also receive offers in the mail from issuers who see your improving score. When you move to a better card, you can close the bad-credit card or keep it open with a zero balance to maintain your credit history length.
If your secured card issuer converts it to an unsecured card, they will return your deposit to your bank account. This usually happens automatically after you meet the issuer's criteria, which is typically 12 to 24 months of on-time payments and a score improvement to 650 or higher.
Common Reasons for Rejection and What to Do
Even with bad credit, you can be rejected for a bad-credit card. The most common reasons are very recent negative marks (a late payment or collection within the last 30 days), no income or inability to prove it, no bank account, or a very low credit score (below 500).
If you are rejected, ask the issuer why. They are required to tell you the reason under the Fair Credit Reporting Act. If it is because of information on your credit report, you can dispute errors with the credit bureau. If it is because of income, you may need to wait until your employment is more stable or find a co-signer.
If you cannot get approved for any card, consider a credit builder loan from a credit union or online lender. These loans are designed to build credit and are easier to get than cards. You borrow a small amount (usually $300 to $1,000), make monthly payments, and the lender reports your payments to the credit bureaus. After you pay off the loan, you can apply for a card.
Another option is to become an authorized user on someone else's credit card account. If that person has good credit and pays on time, their payment history will be added to your credit report and may improve your score. This does not require your approval to be reviewed separately.
Frequently Asked Questions
Will applying for a bad-credit card hurt my credit score?
Yes, but only slightly and temporarily. The issuer will pull a hard inquiry, which lowers your score by a few points for about three months. However, the long-term benefit of making on-time payments outweighs this short-term dip. Avoid applying for multiple cards in a short period, as multiple hard inquiries can lower your score more significantly.
What is the difference between a hard inquiry and a soft inquiry?
A hard inquiry happens when you apply for credit and the issuer checks your full credit report. It appears on your credit report and lowers your score slightly. A soft inquiry is a background check that does not appear on your report and does not affect your score. Issuers use soft inquiries to pre-screen you for offers.
Can I use a secured card to build credit if I have no credit history?
Yes. Secured cards are designed for people with bad credit or no credit history. If you have never had a credit card or loan, a secured card is a good starting point. Your payment history will be reported to the credit bureaus, and after 12 to 24 months, you should have enough history to may have access to for an unsecured card.
What happens if I miss a payment on a bad-credit card?
A missed payment will be reported to the credit bureaus and will lower your score further. You will also be charged a late fee (typically $25 to $40) and your interest rate may increase. If you miss a payment by 30 days or more, the issuer may freeze your account or close it. For secured cards, the issuer may take money from your deposit to cover the missed payment.
How long does it take to improve my credit score with a bad-credit card?
Most people see a noticeable improvement within 6 to 12 months of on-time payments. Your score may improve by 50 to 100 points or more, depending on how bad it was to start with and what other negative marks are on your report. Collections accounts and charge-offs take longer to recover from—they can stay on your report for up to seven years.