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The best credit cards for bad credit are perfect for rebuilding or establishing credit since they often have more relaxed requirements for approval. The ideal credit card offers for bad credit will include low upfront fees, pre-qualification checks, and reporting to all three credit bureaus. Choose one of the secured or unsecured credit cards for bad credit on our list and use it responsibly to start increasing your credit score over time.
Don’t look desperate! When looking at credit cards for bad credit, you may be tempted to apply to as many as possible in hopes of getting approved. Don’t do this! Each time you apply, a hard inquiry is put on your credit report and negatively impacts your credit score for as long as 12 months. Instead, try a pre-qualification option first (which is a soft inquiry), or only apply for cards you are confident you’ll receive approval.
Anyone who wants to rebuild or establish their credit with minimal upfront costs should consider the Capital One® Secured Mastercard®. There’s no annual fee, and you can put down as little as $49 to establish a $200 line of credit (depending on your creditworthiness). Use your card responsibly, and you could get a refund on your deposit, plus an increase in your credit line — no additional deposit needed!
In order to qualify for the credit line increase with no additional deposit, you need to make your first five monthly payments on time. Capital One® lets you pick your own monthly due date so you can make payments in full and on time each month on your schedule.
Why you'll love it
Don’t let the security deposit deter you — the costs are minimal, there’s no annual fee, and you could receive a refund, plus a credit line increase, with responsible use. You can take advantage of Capital One® feature (such as personalized payments and CreditWise®), so you can take control of your credit.
If you’re still not sure if you’ll qualify, the Indigo® Platinum Mastercard® offers a pre-qualification option to let you know the likelihood of getting approved. Even if they can’t match you to an Indigo® Platinum Mastercard®, they’ll offer you the chance to apply for a credit card from another bank.
Why you'll love it
Anyone who’s filed a bankruptcy knows that it can limit your credit options. That’s why the forgiving guidelines from the Indigo® Platinum Mastercard® make it a desirable option. There’s no security deposit required, and the small annual fee makes this card an affordable option for improving your credit score.
The Credit One Bank® Unsecured Visa® with Cash Back Rewards is our top pick for a reason – we’d recommend it to anyone with bad credit! It’s not every day that an unsecured credit card for bad credit comes along that also includes rewards, but with this card, you get just that. As a cardholder, you can earn 1% cash back on everyday purchases, such as gas, groceries, mobile phone service, internet service, cable and satellite TV service, dining, and more. Your cash back rewards will come in the form of an automatic statement credit helping you to pay off your account balance. Remember to pay on time and in full to build positive credit!
In case you missed it
Want to change your payment due date to be closer to payday? With the Credit One Bank® Unsecured Visa® with Cash Back Rewards, you can! After your initial billing period, call customer service to request your payment due date change to either six days before or after the current date.
Your annual fee may affect the amount you have available in credit with the Credit One Bank® Unsecured Visa® with Cash Back Rewards since the annual fee is billed to your account when it is opened. For instance, if your annual fee is $75 and your credit line is $500, then your actual available credit is $425.
Why you'll love it
If you’re searching for a credit card that’s more forgiving of a bad credit score and offers rewards, then the Credit One Bank® Unsecured Visa® with Cash Back Rewards is one to consider. The combination of great features provided by this card makes it easy to earn rewards while also building your credit in the process.
Another card to consider if you have a previous bankruptcy is the Milestone® Gold Mastercard® since they won’t necessarily disqualify you for having one on your credit report. Milestone also offers a pre-qualification option that won’t impact your credit score and assesses your annual fee based on your credit score. Depending on your creditworthiness, you may qualify for an annual fee of as low as $35, $59, or $75 during your first year (then $99 after that). There may also be an account opening fee of $5, $25, or $50. Luckily, though, your first-year annual fee and account opening fee won’t total more than $75.
While the Milestone® Gold Mastercard® does have low account opening fees, you will want to keep an eye out for other fees. If you add an authorized user, there’s a $25 fee. If you make a late payment or go over your limit, there’s a fee of up to $38 as well.
Why you'll love it
The Milestone® Gold Mastercard® has a lot of attractive features. It’s forgiving of a past bankruptcy, it offers $0 cash advance fees the first year and 1% foreign transaction fees, it doesn’t require a security deposit, and it’s backed by MasterCard®, allowing you to use it just about anywhere.
If the thought of bad credit has turned you off of credit altogether, but you want to dip your toes back in, consider the Total VISA® Unsecured Credit Card. It doesn’t have many bells and whistles, but it is a good card to help you become disciplined about credit and minimize the risk of spending too much. With this card, your initial credit limit will be capped at $300 (minus fees), meaning you reduce the risk of overspending. Charge around $100 a month (to keep your credit utilization low) and pay it off in full and on time to start rebuilding or establishing a better credit score.
There are a number of fees associated with the Total VISA® Unsecured Credit Card. You can expect an annual fee, a processing fee, as well as a monthly service fee. Make sure to pay your balance off in full and on time each month to avoid the late payment fee.
Why you'll love it
The Total VISA® Unsecured Credit Card isn’t for everyone, but if you want to take a disciplined approach to building credit, or you’re cautious about starting out with a high credit limit, you’ll want to consider this card. If you use it responsibly and keep your credit utilization low, this card can be a valuable tool for rebuilding your credit.
Upfront feesRefundable deposit equal to credit limit ($200 minimum)
Previous bankruptcy OK?Not specified
Rewards program2% cash back at gas stations and restaurants; unlimited 1% on all other purchases. Terms apply.Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
Your Secured Credit Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases – automatically.
Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
If you like the idea of having perks and rewards, but don’t quite qualify for an unsecured card yet, consider the Discover it® Secured Card - No Annual Fee. There’s a reason we named it our best overall secured credit card – it offers you all the benefits of an unsecured card for a security deposit as low as $200 (up to $2,500). Plus, there’s no annual fee, and you will benefit from rewards! As a cardholder, you’ll earn 2% cash back at restaurants and gas stations (up to $1,000 in combined purchases each quarter), plus 1% cash back on all other purchases. Bonus: You’ll also receive automatic dollar-for-dollar cash back matching at the end of your first year!
Monitor your FICO® Credit Score for free in your account or on your monthly statement.
Pay off your balance on time and in full. Starting at eight months, Discover will review your credit management across all credit cards and loans (including those backed by other banks.) If your accounts are in good standing, Discover may refund your security deposit.
Use this card at restaurants and gas stations to earn extra cash back.
A security deposit is required for the Discover it® Secured Card - No Annual Fee. However, Discover will review your account starting at the eight-month mark to see if you qualify for a refund. These reviews are based on responsible credit management on your credit card, plus other accounts, such as loans or other credit cards not with Discover. This means you’ll want to make sure you’re responsible with all financial accounts.
Why you'll love it
While a security deposit is required, the Discover it® Secured Card - No Annual Fee makes up for it with no annual or monthly fees, plus other perks. Benefits like cash back rewards and cash back matching make this card our top choice among secured credit cards.
Military members and their families should consider the USAA Secured Card® American Express® Card, since it has some of the best features of any secured card. You’ll benefit from a small annual fee of $35, low variable APR rates, no penalty APR, no foreign transaction fee, and super-low 4% APR during deployment or PCS for up to 12 months during deployment. All of these features make the USAA Secured Card® American Express® Card a valuable resource to servicemen and women as well as their families.
While the USAA Secured Card® American Express® Card does offer super-low 4% APR during deployment and PCS, during all other times your interest rate for purchases, balance transfers, and cash advances will be 11.15% – 21.15% (Variable) based on creditworthiness. During these higher interest periods, be sure to pay your balance off in full and on time each month to avoid paying interest.
Why you'll love it
If you’re a member of the armed forces and can put down the security deposit, you’ll find there’s a lot to love about the USAA Secured Card® American Express® Card. While the card does offer a number of perks, you can also feel confident that you’re building or rebuilding your credit with responsible use.
When it comes time to apply for a credit card with bad credit, follow some best practices to help guide you toward the best possible outcome. Before you apply for a credit card with bad credit, here are some things to consider:
Know your credit score. Knowing your credit score helps you narrow down which cards you’re mostly like to get approved for during the process.
Avoid flashy cards. The best rewards, cash back, and travel cards may be tempting, but you’ll want to focus on credit cards for people with bad credit specifically first.
Go secured for a limited time. If an unsecured card isn’t an option, consider a secured credit card. You’ll need to put down a security deposit, but you’ll still be building credit in the process.
Try a prepaid debit card. You might need a bank account to open a secured credit card. If you don’t have one, use a prepaid debit card until you can open an account. You won’t build credit, but it’s a good short-term solution.
How to use credit cards for people with bad credit to improve your score
Did you know you can use a credit card for people with bad credit to improve your score? Understanding your credit history and using your credit card for bad credit responsibly can improve your credit score over time. These six steps will get you started:
Get a copy of your credit report
Dispute any inaccuracies on your report
Pay off any current outstanding debt
Get a credit card for people with bad credit
Set up a payment reminder system
Repeat steps 1 through 5 as needed
Step 1: Get a credit report
How to use credit cards for people with bad credit to improve your score
Your credit report will give you insight into how you can improve your credit score. Request a copy of your credit report from all three of the bureaus through AnnualCreditReport.com (you can request a copy of one or all three every 12 months for free). Look through everything on the report to find any patterns that may be hampering your efforts (such as making payments late or missing payments).
Step 2: Dispute any inaccuracies
While you’re looking through your credit report, you’ll also want to make sure everything is accurate and up to date. Having an inaccuracy on your credit report could be unnecessarily bringing your credit score down. If you find an error, you should dispute it by contacting both the credit reporting agency as well as the company that provided the inaccurate information. You can do so either online, by mail, or by phone.
Step 3: Pay off outstanding debt
If you currently have any outstanding credit card debt, you’ll want to pay that off before opening a new line of credit. Your credit utilization rate – the amount you have charged in relation to your credit limit – accounts for 30% of your credit score. This means you’ll want to keep balances low and/or paid off in full each month. After you pay off a card, though, don’t close it out. Having a long credit history is also important to improving your credit score.
Step 4: Get a credit card
Now that you have a better understanding of your credit score and credit report history, it’s time to start establishing or rebuilding your credit. Apply for one of the credit cards for people with bad credit on our list. Just be sure to limit the amount of applications you fill out. Too many hard inquiries can hurt your score. Not sure if you’ll get approved? Many of the cards on our list will let you know if you pre-qualify without hurting your credit score.
Step 5: Set up a reminder system
Now that you’re rebuilding or establishing credit, it’s time to get on top of things. Making on-time payments accounts for 35% of your credit score, so it’s of vital importance not to miss a payment or pay late. Sign up for reminder alerts, set calendar notifications, use a financial tracking software, or download an app that notifies you. You can choose to either make one payment a month or break it up into smaller pieces, such as twice a month or once a week. Just make sure you’re at least the minimum balance (or, ideally, the full balance) on time each payment cycle.
Step 6: Wash, rinse, repeat
Once you have the basics down, it’s time to keep repeating them. The only way to build credit is to use credit regularly and responsibly. Charge a small amount each month, pay it off in full, and repeat. Check your credit score every few months to see if it’s increasing. Request a copy of your credit report once a year to review it.
Good credit doesn’t just happen, but a credit card for people with bad credit is a good first step. If you’re responsible, persistent, and patient with your credit, you can rebuild or establish good credit in time.
How long does it take to rebuild credit history?
How long it takes to rebuild credit history will depend on your financial situation. The good news is, though, that you can take steps today that put you on the path to positive credit.
First and foremost, if you have a large amount of outstanding debt that you’ve been struggling to pay off, then you should focus on reducing that debt before you incur any more debt. Once your current debts are managed, you can start rebuilding credit with one of the best credit cards for bad credit.
To get started, you’ll want to understand what goes into your credit score. FICO® Scores are broken down by:
35% payment history
30% amounts owed
15% length of credit history
10% new credit
10% credit mix.
Based on these percentages, the two most important things you can do to improve your credit are to make payments on time and in full each month. You’ll also want to keep all accounts open, even if they don’t have a balance. If you have an annual fee you can request a “downgrade” to an account with no annual fee. As your score improves, you can apply for one of the best unsecured cards for bad or average credit, or even one of the best rewards credit cards if you make good strides. This will help you establish new credit, as well as add to your credit mix.
When should I pay off my credit card bill?
Always strive to pay your credit card balance in full by your statement due date. There’s no better way to build a solid credit history and healthy credit score.
Credit is a powerful tool when seasoned with self control, but left unbridled, it can wreak havoc on your financial future. Case in point: The average American household has $16,000 of credit card debt. If your card has an 18% APR and you’re only making the minimum payment (usually around 3% of the total balance) you’ll rack up over $2,000 in interest charges every month and continue to lose ground.
Paying your credit card off in full also helps to keep your credit utilization ratio low. Your credit utilization ratio is the percentage of your available credit that you have used. Credit bureaus use this metric to gauge how responsible you are.
When it comes to credit utilization ratio, low is best. Credit cards can negatively affect your credit utilization if you continuously run large balances.
We recommend keeping your credit utilization for each credit card below 30%. You can track your credit utilization on your credit card with some simple math — (balance ÷ credit limit = ratio).
Most card issuers report your balance and activity to the credit bureaus once per month. The problem is that the report might be issued before your monthly statement is due. So even if you pay your card in full each month, it will appear to credit bureaus that your utilization ratio is higher than it actually is.
If you’re committed to keeping your credit utilization ratio low, call your credit card help line, ask when your credit activity is reported, and make sure to pay your balance before that date. (Paying off charges immediately isn’t a bad idea either.)
How does a secured credit card work?
Unlike normal (unsecured) credit cards, secured credit cards require an upfront deposit — most have a $200 minimum and $1,000 max — that also serves as your credit limit. If you miss a payment, the card issuer will settle the account with your deposit and adjust your credit limit accordingly, but you’ll still have to pay interest. If you decide to close a non-delinquent account, your deposit will be refunded.
Secured cards are great for rebuilding credit
Secured credit cards are less risky for lenders than regular credit cards because they’re bankrolled by you. Less risk means you don’t have to have a great credit score to qualify.
That’s why secured cards are one of the best ways to build and improve credit. And after a few months of disciplined use, you might even be able to upgrade your credit limit — or qualify for an unsecured card with a better rewards program.
Can I get approved for a secured credit card?
Generally speaking, you need a “good to excellent” credit score to apply for top rewards cards like the Discover it® Cashback Match™ or Chase Sapphire Preferred® Card. Secured cards, on the other hand, will consider scores much lower — some cards don’t even require a credit check to apply.
But credit isn’t the only factor to consider. Some secured cards, like the Capital One® Secured Mastercard®, have other criteria, like having a bank account. Always make sure you understand the requirements before you apply.
Secured cards are great for students to build credit
College students have two primary options for building credit: secured credit cards and student credit cards. A secured card is ideal if you don’t have any experience managing money Also, certain secured cards don’t charge a penalty APR if you’re late with one or two payments.
Student credit cards have the advantage of rewards and higher credit limits, but are best for students who have already begun to build a credit history. Unless you’re incredibly disciplined, you should start with a secured credit card.
Will I get approved for a credit card for bad credit?
If your credit is bad, you may be concerned about applying for a credit card — What if I don’t get approved?
Many credit cards for bad credit offer free pre-qualification checks. A pre-qualification check allows the creditor to do a “soft inquiry” on your credit report to establish whether you may qualify for a particular card. This soft inquiry doesn’t affect your credit score, but it does allow you to get an idea of what cards may be best for you.
Will a new credit card hurt my credit score?
Here’s how a pre-qualification check differs from an actual application: Applying for a new credit card (no matter your credit score) may result in your credit score taking a dip — temporarily. When you open a new line of credit, the process involves making a “hard inquiry” on your credit report.
This can result in a slight dip in your credit score for a short period of time. In general, though, adding a new line of credit may increase your score over time since new credit accounts for 10% of your FICO score.
The biggest part of your credit score you want to be aware of is payment history and amounts owed. By using your card responsibly, such as making payments on time and in full each month, you will be establishing good credit habits that may increase your credit score over time.
If you rack up too many hard inquiries in a short amount of time, your credit score might be at risk. Here’s a list of the best unsecured credit cards that allow you to pre-qualify for approval. That way, you’ll have an idea of which cards you’re likely to be approved for prior to submitting an official application.
Types of cards to avoid with bad credit
Not all cards touted for those with bad credit will help you improve your credit score. Here are two types of cards that you should avoid:
Cards with no grace period
If the card doesn’t have a grace period, don’t sign up. Without a grace period, you’ll begin to accrue interest immediately after your monthly statement processes. It’s also worth noting that card offers change pretty frequently. Sometimes cards have multiple versions as well, so make sure you read the fine print of the current offer before you pull the trigger.
Merchandise cards (often called online catalog cards) aren’t credit cards at all. They’re lines of credit that you can only use while shopping at specific online marketplaces. Because you can’t use them for everyday purchases, they do not help you rebuild credit. (Not to mention they encourage unnecessary spending.)
Research More Credit Cards to Rebuild Your Credit
Below is a directory with the most popular credit cards for bad credit in the marketplace. These include the best secured credit cards and unsecured credit cards for lower credit. Sometimes, credit card issuers bring new cards to the market and sometimes they choose to discontinue certain cards. All changes are reflected in real-time in this directory.
Sort, filter, or search for what matters most to find the best credit card for you.
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