Getting a Credit Card When Your Credit Score Is Low

Yes, you can get a credit card with bad credit — but your options are different from someone with good credit

Banks and credit card companies do issue cards to people with low credit scores, but they use a different set of rules. Instead of a standard rewards card or a card with a high spending limit, you will typically be offered a secured credit card or a subprime card. Both exist specifically for people rebuilding credit. The trade-off is higher interest rates, lower credit limits, and sometimes annual fees. But both can work toward your goal if you understand how they function and what happens after you open one.

The reason lenders still offer cards to people with bad credit is simple: they want to make money from interest, and they know some people will pay reliably even with a damaged credit history. Your job is to find the card that costs you the least while actually helping your score improve.

Key Takeaways

• Secured cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, while subprime cards do not require a deposit but charge higher interest rates and fees.
• Interest rates on cards for bad credit typically range from 18% to 36% APR, depending on the card and your specific credit profile.
• Using a card responsibly — paying on time and keeping your balance low — can improve your credit score within 6 to 12 months.
• Many secured cards convert to regular cards after 6 to 18 months of on-time payments, at which point your deposit is returned.
• Annual fees, late fees, and over-limit fees add up quickly, so comparing the actual costs between cards matters more than the interest rate alone.

How secured cards work when your credit is low

A secured credit card requires you to put money into a savings account held by the bank. That deposit becomes your credit limit. If you deposit $500, your credit limit is $500. You then use the card like any other card — swipe it, pay the bill each month — but the bank holds your deposit as insurance in case you stop paying.

The deposit is not a fee. It sits in an account and earns a small amount of interest (usually less than 1% per year). You get it back when you close the card or when the bank converts it to a regular card, which many do after you make on-time payments for 6 to 18 months. The card itself still charges interest on whatever balance you carry, just like a regular card.

Secured cards are the most common path for people with bad credit because they give banks confidence you will pay, which means they charge lower interest rates than subprime cards. Interest rates on secured cards typically range from 18% to 24% APR. You will also pay an annual fee, usually $25 to $99, and possibly a one-time processing fee when you open the account.

Subprime cards: no deposit required, but higher costs

A subprime card does not require a deposit. You apply, the bank checks your credit, and if approved, you get a card and a credit limit — usually $300 to $500 to start. The catch is cost. Interest rates on subprime cards run 24% to 36% APR, and annual fees are often $75 to $150. Some cards also charge monthly maintenance fees ($5 to $15 per month) just for having the account open.

Subprime cards make sense only if you cannot save up a deposit for a secured card, or if you need a card immediately and do not have time to open a savings account. Otherwise, a secured card will cost you less money over time because the interest rate is lower and there are fewer hidden fees.

One advantage of subprime cards: some report to all three credit bureaus (Equifax, Experian, and TransUnion) from day one, which means your payment history starts building your score right away. Secured cards also report to all three bureaus, so this is not unique to subprime cards, but it is worth confirming before you open any account.

What actually happens to your credit score when you use the card

Opening a new card causes a small, temporary dip in your score — usually 5 to 10 points — because the bank runs a hard inquiry on your credit report. That dip fades within a few months. What matters more is what happens after: if you use the card and pay on time, your score will climb.

Credit bureaus track several things: whether you pay on time (35% of your score), how much of your available credit you use (30% of your score), how long you have had credit accounts open (15%), whether you have a mix of credit types (10%), and how often you apply for new credit (10%). A secured or subprime card helps with the first two. Paying on time every month shows lenders you are reliable. Keeping your balance below 30% of your limit shows you are not desperate for credit.

Most people see their score improve by 50 to 100 points within 6 to 12 months of responsible card use. That is enough to move from "bad credit" (typically 300 to 669) into "fair credit" (typically 670 to 739) territory, which opens up better cards and lower interest rates on loans.

Comparing cards: what to actually look at

When you are shopping for a card, the interest rate matters, but it is not the only number. A card with a 20% APR and a $99 annual fee might cost you more than a card with a 22% APR and a $25 annual fee, depending on how much you carry and how long you keep the card.

Here is what to compare: annual fee, APR, any monthly or processing fees, the credit limit you are likely to receive, and the bank's policy on converting the card to a regular card (if it is a secured card). Read the fine print for late fees — these can range from $25 to $40 per late payment — and over-limit fees if the card allows you to spend above your limit.

Some banks offer perks like free credit score monitoring or the ability to increase your credit limit without another hard inquiry. These do not change the math much, but they are nice to have. What matters most is that you can afford the annual fee and that you trust yourself to pay the bill on time every month.

Where to actually apply and what to expect

You can apply for secured and subprime cards directly through bank websites, through credit card comparison sites, or through your own bank if you already have a checking or savings account there. Your own bank is often the easiest route because they already know you and may offer better terms.

The application takes 10 to 15 minutes online. The bank will ask for your name, address, income, employment status, and permission to check your credit. They will run a hard inquiry, which temporarily lowers your score by a few points. You will get a decision within a few days to a week.

If you are approved, the bank will tell you your credit limit and APR. For a secured card, you will then fund the deposit — usually by transferring money from a bank account or mailing a check. The card arrives in the mail within 7 to 10 business days. For a subprime card, the card arrives without needing a deposit first.

What to do after you get the card to actually improve your credit

Opening the card is the first step. Using it correctly is what builds your score. Here is the plan: use the card for small, regular purchases — groceries, gas, a subscription you already pay for. Keep the balance low, ideally below 10% of your limit. Pay the full balance every month, on time, before the due date.

Do not max out the card to "build credit faster." That does not work. High balances hurt your score more than they help it. Do not skip payments or pay late. One late payment can drop your score 100 points and will stay on your report for seven years. Set up automatic payments if you are worried about forgetting.

After 6 to 18 months of on-time payments, contact the bank and ask if they will convert your secured card to a regular card. Many will. Your deposit gets returned, your credit limit may increase, and your interest rate may drop. At that point, you can close the secured card or keep it open to maintain a longer credit history — closing it can actually hurt your score slightly because it reduces your total available credit.

Frequently Asked Questions

Can I get approved for a credit card with a 500 credit score?

Yes. Secured cards and subprime cards are designed for scores in that range. You will not get approved for premium cards or cards with rewards, but you will get approved for a basic card. The lower your score, the higher the interest rate and fees will be, but approval is possible.

What if I get rejected?

If a bank rejects you, ask why. Sometimes it is because of recent missed payments or too many recent applications. Wait a few months and try again. In the meantime, focus on paying any existing debts on time. You can also try a different bank — some are more lenient with bad credit than others.

Will getting a credit card hurt my credit score?

The hard inquiry and new account will cause a small, temporary drop of 5 to 10 points. But if you use the card responsibly, your score will recover and climb within a few months. The long-term benefit of building a payment history outweighs the short-term dip.

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

Most people see meaningful improvement — 50 to 100 points — within 6 to 12 months of on-time payments. Moving from bad credit to fair credit typically takes 12 to 24 months. Moving to good credit takes longer and usually requires more than one card or credit account.

Can I use a secured card and a subprime card at the same time?

Yes, but be careful. Each new application causes a hard inquiry, and having multiple new accounts can hurt your score. If you do open two cards, space the applications a few months apart and make sure you can manage payments on both. Two cards with on-time payments will build your score faster than one, but only if you do not miss a payment on either.