You can get a credit card with poor credit, but your options are narrower and the terms will be less favorable than what someone with good credit receives
A poor credit score — typically below 580 — closes off most standard credit cards. Banks see you as higher risk, so they either deny you outright or offer cards with higher interest rates, annual fees, and lower credit limits. But you are not locked out entirely. Secured credit cards, store cards, and cards designed for people rebuilding credit do exist and will accept you. The trade-off is that you will pay more to borrow, so using these cards wisely matters more than it does for someone with better credit.
The path forward depends on what caused your poor credit and what you are trying to do now. If you defaulted on old debts, a secured card is usually your best entry point. If you have no credit history at all, a store card or a card for thin credit files might work. If you are actively in collections or bankruptcy, most issuers will still deny you, but a few cards exist for that situation too.
Key Takeaways
- Secured credit cards require a cash deposit that becomes your credit limit, and they report to the three major credit bureaus so you can build a record of on-time payments.
- Cards marketed for poor credit typically charge annual fees between $39 and $99 and interest rates between 24% and 36%, so carrying a balance costs significantly more than it would with a standard card.
- Store cards and cards for thin credit files sometimes have lower approval odds than secured cards, but they do not require a deposit and may have lower annual fees.
- Your credit score will drop slightly when you open any new card, but it will begin to recover within a few months if you pay on time and keep your balance low.
Secured cards: the most reliable path for poor credit
A secured credit card requires you to put down a cash deposit, usually between $200 and $2,500. That deposit becomes your credit limit. You then use the card like any other — make purchases, receive a bill, pay it. The deposit sits in a bank account and is not touched unless you stop paying your bill.
Secured cards report your payment history to Equifax, Experian, and TransUnion, the three credit bureaus. If you pay your bill on time every month, your credit score will begin to climb within three to six months. After 12 to 24 months of perfect payment history, many issuers will convert your card to a standard card, return your deposit, and raise your credit limit.
The catch is the annual fee. Most secured cards charge $25 to $99 per year. Some also charge an interest rate of 18% to 24% if you carry a balance. Because you are rebuilding, carrying a balance defeats the purpose — you want to show you can pay in full. So treat a secured card as a tool to build credit, not as a source of borrowing money.
Issuers that offer secured cards include Capital One, Discover, and several smaller banks and credit unions. The terms vary, so compare the annual fee, interest rate, and the timeline to conversion before you choose.
Unsecured cards for poor credit: higher fees, no deposit
Some card issuers will offer you an unsecured card — one with no deposit required — even with poor credit. These cards typically charge annual fees of $39 to $99 and interest rates of 24% to 36%. The approval odds are lower than with a secured card, but if you are approved, you avoid putting down a deposit.
Cards in this category include the Credit One Bank Visa, the Milestone Mastercard, and the OpenSky Secured Visa (which is secured but does not report the deposit to credit bureaus, making it useful if you want to hide the deposit from other lenders). Read the fine print carefully — some of these cards charge additional fees for things like paying your bill by phone or requesting a credit limit increase.
The interest rate is the real cost. At 30% APR, a $500 balance costs you $12.50 per month in interest alone. If you can pay your full balance each month, the interest rate does not matter. If you cannot, a secured card with a lower interest rate is usually the better choice, even though it requires a deposit.
Store cards and cards for thin credit files
Retail store cards — from Target, Walmart, Amazon, or department stores — sometimes approve people with poor credit more readily than bank cards do. The interest rates are often higher (24% to 29%), and the credit limit is usually lower, but the annual fee is often $0. Store cards also report to the credit bureaus, so they build your credit history the same way a bank card does.
The downside is that you can only use a store card at that store (or the store's website). If you want a card you can use anywhere, a store card will not help. But if you shop at a particular store regularly, a store card can be a low-cost way to start building credit.
Cards marketed for people with thin credit files — meaning little or no credit history — work similarly. These cards have lower approval odds than secured cards but may have lower annual fees. Discover and Capital One both offer cards in this category.
What happens to your credit score when you open a new card
Opening any new credit card causes a small, temporary drop in your credit score — usually 5 to 10 points. This drop happens because the card issuer runs a hard inquiry on your credit report, and because you now have a new account with a zero balance and a short history.
The drop is temporary. Within a few months, as you make on-time payments and your account ages, your score will recover and begin to climb. The longer you keep the card open and the more consistently you pay on time, the more your score will improve.
Do not open multiple cards in a short time. Each process causes a hard inquiry, and multiple inquiries in a few weeks can signal to lenders that you are desperate for credit, which lowers your score further. Space applications out by at least a few months.
How to use a poor-credit card to actually improve your credit
Getting approved for a card is only half the battle. How you use it determines whether your credit score improves or stays stuck. The most important rule: pay your full balance on time, every month. A single late payment will damage your credit score and may trigger a higher interest rate or penalty fee.
Keep your balance low relative to your credit limit — ideally below 30% of the limit. If your limit is $500, try not to carry a balance above $150. This ratio, called your credit utilization rate, is one of the largest factors in your credit score. High utilization signals that you are relying on credit, which lowers your score.
Do not close the card once your credit improves. Closing an old account lowers your score because it reduces the average age of your accounts and increases your utilization rate on any remaining cards. Keep the card open, use it occasionally, and pay it off.
When you are in collections or bankruptcy
If you are currently in collections or in active bankruptcy, most card issuers will deny you. A few cards exist for this situation, but approval is not may provide. Milestone and OpenSky sometimes approve people in collections if the debt is old enough. Some credit unions offer cards to members in bankruptcy, but you have to be a member first.
Your best move is to wait. Collections accounts become less damaging over time, and bankruptcy becomes less visible after three to seven years. Once you are further from the event, your approval odds improve dramatically. In the meantime, focus on paying any active debts on time and building a savings buffer so you do not need credit.
Frequently Asked Questions
Will a secured card hurt my credit score?
Opening the card will cause a small temporary drop of 5 to 10 points, but your score will recover within a few months if you pay on time. Over time, the card will improve your score because it adds a positive payment history to your credit report.
Can I get my deposit back?
Yes. Most issuers return your deposit after 12 to 24 months of on-time payments, and they convert your card to a standard card with a higher credit limit. Some issuers return it sooner if your credit score improves enough. Check the issuer's terms before you open the account.
What is the difference between a secured card and a prepaid card?
A secured card requires a deposit and reports to credit bureaus, so it builds your credit. A prepaid card is just a way to spend money you already have — it does not report to credit bureaus and does not build credit. For rebuilding credit, a secured card is the right choice.
Should I explore for multiple cards at once?
No. Each process causes a hard inquiry that lowers your score. explore for one card, wait a few months, and then explore for another if you need it. Multiple applications in a short time will damage your score more than the cards will help it.
What if I am denied?
Ask the issuer why. If it is because of a specific negative mark on your credit report, you can dispute it with the credit bureau. If it is because your score is too low, wait a few months and try again. Your score may have improved, or you can try a different issuer with lower standards.