You can get a credit card with bad credit, but your options are narrower and the terms will be less favorable than cards for good credit

Bad credit does not lock you out of credit cards entirely. Banks and card issuers still offer products to people with low scores, but they price the risk differently: higher interest rates, lower credit limits, and annual fees are standard. The cards that will consider you fall into three categories: secured cards (backed by a cash deposit), unsecured cards for bad credit (no deposit required, but higher fees), and retail or store cards (easier approval, but only usable at one merchant). Your job is to pick the one that costs you the least while actually helping your score recover.

The choice between these three depends on what cash you have available and how much you can afford to spend on fees. If you have $200 to $500 sitting aside, a secured card usually costs less over time. If you need to preserve cash, an unsecured bad-credit card lets you start when ready, though you will pay more in interest and fees. Store cards work best as a second card, not your first.

Key Takeaways

  • Secured cards require a cash deposit but often have lower annual fees and better terms than unsecured bad-credit cards, making them the stronger choice for score recovery.
  • Unsecured bad-credit cards charge annual fees between $39 and $99 and APRs of 25% to 36%, so compare the full cost before opening an account.
  • Store cards approve more easily but only work at one retailer, so they should supplement a general-purpose card, not replace it.
  • Your credit score improves fastest when you keep your balance well below the limit and pay on time every month, so pick a card you can actually afford to use responsibly.

Secured cards: deposit-backed cards that report to all three bureaus

A secured credit card requires you to put down a cash deposit, usually between $200 and $2,500, which becomes your credit limit. You use the card like any other — swipe it, pay the bill — but the bank holds your deposit as collateral. After 6 to 18 months of on-time payments, many issuers convert the card to unsecured and return your deposit. The deposit itself does not count as a payment; you still owe your monthly bill in full.

Secured cards are often the better choice for bad credit because the deposit lowers the bank's risk, which means lower annual fees and APRs. Many charge $0 to $49 per year, compared to $39 to $99 for unsecured bad-credit cards. APRs on secured cards typically range from 18% to 24%, versus 25% to 36% on unsecured. The tradeoff is that your money is tied up in the deposit for months. If you have $500 to spare and can leave it untouched, a secured card usually costs less over time than an unsecured one.

The major issuers offering secured cards include Capital One, Discover, and U.S. Bank. Each has different deposit minimums and conversion timelines, so compare before you choose. Most report to all three credit bureaus, which is essential for rebuilding your score.

Unsecured bad-credit cards: no deposit, but higher fees and rates

An unsecured bad-credit card requires no deposit, so you do not tie up cash upfront. Instead, the issuer accepts the risk directly and charges you for it through annual fees and high interest rates. Most unsecured bad-credit cards charge $39 to $99 per year and carry APRs between 25% and 36%. Some also charge a processing fee ($25 to $75) when you open the account, or a monthly maintenance fee ($5 to $10).

The math matters here. If you carry a $500 balance on a card with a 30% APR and a $99 annual fee, you will pay roughly $150 to $180 in interest and fees per year on that balance alone. That same $500 on a secured card at 20% APR with no annual fee costs about $100 in interest. The unsecured card is more expensive unless you pay your balance in full every month. If you can do that, the annual fee is your only cost, and the higher APR does not matter. If you cannot, a secured card usually wins.

Unsecured bad-credit cards make sense when you need credit when ready and have no cash for a deposit, or when you are confident you will pay your balance in full each month. Issuers like Credit One and Milestone offer unsecured options, though terms vary widely.

Store cards: easier approval, limited usefulness

Retail and store cards (issued by individual merchants like Target, Amazon, or Best Buy) approve people with bad credit more readily than general-purpose cards because the issuer controls where you spend. They are not a substitute for a Visa or Mastercard — you can only use them at that one store or online platform. Many store cards have no annual fee, which is their main advantage.

Store cards can be useful as a second card to build history faster, since you are using credit in two places instead of one. But they should not be your only card. You need a general-purpose card (secured or unsecured) that works everywhere, because most of your spending happens outside a single retailer. If you get approved for a store card, use it for occasional purchases you would make there anyway, keep the balance low, and pair it with a secured or unsecured general card.

How to compare bad-credit card offers side by side

When you are looking at multiple cards, compare these numbers in order: annual fee, APR, and any other recurring charges (monthly fees, processing fees). Calculate the total cost of carrying a small balance for one year on each card, then compare. A card with a $0 annual fee and 24% APR will cost less than a card with a $99 fee and 20% APR if you carry a $500 balance.

Check whether the card reports to all three credit bureaus (Equifax, Experian, TransUnion). If it reports to only one or two, it will not help your score as much. Most major issuers report to all three, but some smaller or store-specific cards do not. The issuer's website or the card's terms should state this clearly.

Also look at the credit limit the issuer is likely to offer you. Some bad-credit cards start at $300; others go up to $2,500. A higher limit gives you more room to keep your balance low relative to your limit, which helps your score. But do not open an account just because the limit is high — a limit you do not use is not useful.

What happens after you open the account

Your first month with a new card is critical. Make one small purchase — $10 to $25 — and pay it in full before the due date. This shows the issuer you can handle the account and gets the payment reported to the bureaus. Repeat this for three to six months. Do not max out the card or carry a large balance, even if you can afford to pay it off. A balance above 30% of your limit hurts your score, and above 50% hurts it more.

After six months of on-time payments, you can ask the issuer to increase your credit limit without a hard inquiry (a "soft pull" instead). A higher limit makes it easier to keep your utilization low. If you have a secured card, ask about converting it to unsecured around the 12-month mark. Some issuers do this automatically; others require you to request it.

Red flags: cards and practices to avoid

Avoid cards that charge a fee just to look at your terms or a fee to set up the card. Legitimate bad-credit cards do not do this. Also avoid cards that require you to buy a "credit-building package" or pay for credit counseling as a condition of opening an account — these are often scams or predatory products.

Do not open accounts for multiple cards in a short period. Each process triggers a hard inquiry, which lowers your score slightly. Space applications out by at least three months. If you are denied, ask why — sometimes it is a data error on your credit report that you can fix, rather than your score itself.

Frequently Asked Questions

Will getting a bad-credit card hurt my score more?

The hard inquiry from the process will lower your score by a few points temporarily, but the new account and on-time payments will raise it over the next few months. The net effect is positive if you use the card responsibly. Avoid opening accounts for multiple cards at once.

What if I am denied for a secured card?

Denial is rare for secured cards because the deposit covers the risk. If you are denied, ask the issuer why — it may be a mistake on your credit report, not your score. You can also try a different issuer; approval standards vary. If no secured card will take you, a store card may be your entry point.

Can I use a bad-credit card to pay off other debts?

You can, but it is usually expensive. A balance transfer to a bad-credit card at 30% APR does not save you money unless your current debt is at an even higher rate. If you are trying to consolidate, a personal loan or debt management plan may be cheaper. Check the terms before transferring.

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

You will see movement in three to six months of on-time payments. Significant improvement (50+ points) typically takes 12 to 24 months, depending on how bad your score was and what else is on your report. The longer your history of on-time payments, the faster the improvement.

Should I close the card once my credit improves?

No. Closing a card lowers your available credit, which raises your utilization ratio and can hurt your score. Keep the card open and use it occasionally, even after you move to better cards. The longer the account stays open, the more it helps your history.