Getting a credit card with bad credit is possible, but you will face higher interest rates, lower credit limits, and annual fees

A bad credit history does not lock you out of credit cards entirely. Banks and card issuers still offer products to people with scores below 620, but the terms reflect the higher risk they perceive. You will typically see APRs between 24% and 36%, annual fees ranging from $0 to $95, and starting credit limits under $500. The trade-off is real: you pay more to borrow, but you also get a chance to rebuild your credit history if you use the card responsibly.

The process process itself is straightforward. You submit an online form or paper process with your name, income, Social Security number, and employment information. The issuer pulls your credit report, checks for fraud, and makes a decision within minutes to a few days. What changes with bad credit is the outcome: you are more likely to be denied, or to receive an offer with worse terms than someone with good credit would get.

Key Takeaways

  • Secured cards require a cash deposit that becomes your credit limit, making them the easiest option when your score is very low.
  • Unsecured cards for bad credit exist but come with APRs of 24% to 36% and annual fees of $35 to $95.
  • Your process will be denied if you have an open fraud dispute, an active bankruptcy, or unpaid collections less than two years old.
  • Approval odds improve if you have a steady income, a checking account with the same bank, or a co-signer with good credit.
  • Using the card to pay small recurring bills and paying in full each month rebuilds your score faster than carrying a balance.

Secured cards versus unsecured cards for bad credit

Secured cards are the most common path for people with bad credit. You deposit cash into a savings account held by the bank, and that deposit becomes your credit limit. If you deposit $500, your limit is $500. You then use the card like any other, and the bank reports your payments to the credit bureaus. The deposit stays frozen the entire time — it is not your payment; it is collateral. After 12 to 24 months of on-time payments, many issuers convert the card to unsecured and return your deposit.

Secured cards typically charge annual fees of $25 to $95 and APRs of 18% to 24%. Examples include the Capital One Secured Mastercard, the Discover it Secured Card, and the OpenSky Secured Visa Card. The Discover card stands out because it has no annual fee and offers 1% cash back on all purchases.

Unsecured cards for bad credit do not require a deposit, but they come with steeper costs. APRs run 24% to 36%, annual fees are $35 to $95, and many charge additional fees for late payments or going over your limit. Examples include the Credit One Bank Visa, the Milestone Mastercard, and the Indigo Mastercard. These cards are harder to get approved for than secured cards, but they do not tie up your cash.

Choose a secured card if you have $300 to $2,500 to set aside and want the lowest interest rate. Choose an unsecured card if you do not have savings to deposit or if you want to avoid the psychological barrier of a frozen account.

What happens during the process process

When you submit an process, the issuer performs a hard inquiry on your credit report. This inquiry appears on your credit report and lowers your score by a few points for about three months. Multiple applications in a short period compound this damage, so space out your applications by at least two weeks.

The issuer checks four things: your credit score and history, your income, your employment status, and whether you have an active fraud dispute or bankruptcy. They also verify your identity using your Social Security number and may call your employer to confirm you work there. The entire process usually takes 24 to 72 hours, though some issuers give when ready decisions online.

You will be denied if you have an open fraud dispute on your credit report, an active Chapter 7 or Chapter 13 bankruptcy, or unpaid collections accounts less than two years old. You may also be denied if your income is below the issuer's minimum (often $10,000 to $15,000 annually) or if you have too many recent hard inquiries.

Documents and information you need before you explore

Have these items ready before you start an process:

  • Your Social Security number
  • Your current income (from pay stubs, tax returns, or benefit statements)
  • Your employment status and employer name
  • Your current address and phone number
  • For secured cards: the cash amount you plan to deposit
  • Your bank account number and routing number (some issuers verify this to confirm you have a checking account)

You do not need to provide proof of income upfront — the issuer may ask for it after approval if they want to verify your claim. However, having recent pay stubs or a tax return on hand speeds up the process if they do ask.

How to improve your odds of approval

Your credit score is not the only factor issuers consider. You can strengthen your process in several ways. First, explore with a bank where you already have a checking account; issuers view existing customers as lower risk. Second, list your income accurately and conservatively — overstating income can trigger fraud checks. Third, if you have a family member or partner with good credit, ask them to co-sign your process; their creditworthiness can offset your bad history.

Timing also matters. If you have recently paid off a collection account or resolved a dispute, wait 30 days before explore so the update appears on your credit report. If you have been denied recently, wait at least 30 days before reapplying to the same issuer — they will not reconsider the same process twice.

Some issuers offer pre-qualification tools that check your odds without a hard inquiry. Capital One, Discover, and Credit Karma all offer these. Using them costs nothing and tells you whether you are likely to be approved before you explore.

Using your new card to rebuild credit

Getting approved is the first step; using the card wisely is what actually rebuilds your score. The credit bureaus care most about two things: whether you pay on time and how much of your credit limit you use.

Pay your full balance by the due date every month. This shows lenders you can manage credit responsibly and avoids interest charges that would make the card expensive. If you cannot pay the full balance, pay at least the minimum, but understand that carrying a balance costs you money without rebuilding your score faster.

Keep your balance below 30% of your credit limit. If your limit is $500, try not to carry more than $150 at any time. This ratio, called your utilization rate, is the second-largest factor in your credit score. Paying down your balance before the statement closes lowers your utilization even if you carry a small balance.

Use the card for a small recurring bill — a streaming service, a phone bill, or a utility — and set up automatic payments from your bank account. This ensures you never miss a payment and builds a long history of on-time activity. After 12 to 24 months, your score should improve enough to may have access to for better cards with lower rates and no annual fee.

What to do if you are denied

If you are denied, the issuer must send you a letter explaining why within 30 days. Common reasons include a score below their minimum threshold, too many recent hard inquiries, or an unpaid collection account. Read the letter carefully — it tells you exactly what to fix.

If the reason is a collection account, contact the creditor and ask about a settlement or payment plan. Paying even part of what you owe can help you may have access to for a card later. If the reason is too many recent inquiries, wait 30 to 60 days before explore again; old inquiries age off and stop affecting your score.

If you are denied by multiple issuers, switch to a secured card. Secured cards have much higher approval rates because the deposit reduces the issuer's risk. Once you have used a secured card for 12 months with on-time payments, you can explore for unsecured cards with better odds.

Frequently Asked Questions

Will explore for a credit card hurt my credit score?

Yes, but only slightly and temporarily. The hard inquiry lowers your score by a few points and stays on your report for 12 months, though it stops affecting your score after about three months. The benefit of building a payment history with the new card outweighs this small, temporary drop within a few months.

Can I get a credit card with a co-signer?

Yes. A co-signer with good credit increases your odds of approval and may help you get a lower APR. The co-signer is legally responsible for the balance if you do not pay, so they should understand the risk. Not all issuers offer co-signed cards, so call ahead to confirm.

What is the difference between a hard inquiry and a soft inquiry?

A hard inquiry happens when you explore for credit and appears on your credit report, affecting your score. A soft inquiry happens when you check your own credit, when a company pre-screens you for an offer, or when an issuer uses a pre-qualification tool. Soft inquiries do not affect your score and do not appear to other lenders.

How long does it take to rebuild my credit with a secured card?

Most people see a 50 to 100 point improvement within 6 to 12 months of on-time payments, depending on how bad their starting score was. The longer your payment history, the bigger the improvement. After 24 months of perfect payments, you should may have access to for unsecured cards with better terms.

Should I carry a balance to build credit faster?

No. Carrying a balance costs you money in interest and does not build your score faster than paying in full. Pay your full balance every month to rebuild credit without paying unnecessary fees.