Getting a Credit Card When Your Credit History Is Poor

Yes, you can get a credit card with bad credit, but your options are limited and the terms will be less favorable than what people with good credit receive

Banks and credit card companies do issue cards to people with poor credit histories, but they manage their risk by charging higher interest rates, requiring a cash deposit, or both. The cards available to you fall into two main categories: secured credit cards, which require you to put money down, and unsecured cards for bad credit, which don't require a deposit but come with steep fees and interest rates. Your credit score, recent payment history, and current income all factor into whether you'll be approved and what terms you'll receive.

The real value of getting a card with bad credit isn't the card itself—it's what you do with it afterward. Using a bad-credit card responsibly for six to twelve months can improve your credit score enough to may have access to for better cards with lower rates and fewer fees. That improvement is the actual goal, not keeping the first card forever.

Key Takeaways

• Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and most banks will convert them to regular cards after you demonstrate responsible use.
• Unsecured cards for bad credit exist but typically charge annual fees of $25 to $99 plus interest rates of 20% to 36%, making them expensive to carry a balance on.
• Your approval odds improve if you have a steady income, a checking account with the same bank, or a co-signer, though co-signers are rare for bad-credit cards.
• Using any card responsibly—paying on time and keeping your balance low—can raise your credit score by 50 to 100 points within six to twelve months.
• Predatory cards that promise approval to anyone or charge fees just to apply should be avoided; legitimate bad-credit cards come from real banks and credit unions.

How secured credit cards work and why they're usually the better choice

A secured credit card requires you to deposit 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 credit card—make purchases, receive a bill, and pay it back. The bank holds your deposit the entire time you have the card, so they have no risk if you don't pay your bill.

Secured cards typically charge annual fees between $0 and $95, and interest rates between 18% and 24%. Those rates are still high, but they're lower than most unsecured bad-credit cards. More importantly, after you've used the card responsibly for six to eighteen months—paying on time and keeping your balance below 30% of your limit—most banks will convert your secured card to a regular unsecured card and return your deposit. That conversion is the whole point of the secured card strategy.

Banks that offer secured cards include Capital One, Discover, and many credit unions. You can find current options by searching "secured credit card" along with your state name, since some banks operate in specific regions. Before you apply, check whether the bank reports your activity to all three credit bureaus (Equifax, Experian, and TransUnion). If they don't report to all three, your card won't help your credit score as much.

Unsecured cards for bad credit: higher cost, faster approval

Unsecured cards for bad credit don't require a deposit, so you get your credit limit immediately without putting money down. The tradeoff is cost. These cards typically charge annual fees of $25 to $99 and interest rates of 24% to 36%. Some also charge monthly maintenance fees of $5 to $15, which means you're paying to have the card even if you don't use it.

Because of these fees, unsecured bad-credit cards only make sense if you plan to pay off your balance in full every month. If you carry a balance, the interest charges will quickly outpace any benefit to your credit score. For example, a $500 purchase on a card with a 30% interest rate costs you $12.50 per month in interest alone if you don't pay it off.

Issuers of unsecured bad-credit cards include Credit One Bank, Milestone, and OpenSky. These are real companies, but their cards are expensive. Before you apply, read the full terms and fee schedule. If a company promises approval without checking your credit or charges a fee just to apply, that's a red flag—legitimate card issuers don't work that way.

What lenders look at beyond your credit score

Your credit score is important, but it's not the only thing a card issuer considers. Banks also look at your income, employment history, and whether you have an existing relationship with them. If you have a checking account at a bank, that bank is more likely to approve you for a credit card from them because they can see your account history and know you manage money with them.

Recent payment history matters more than old negative marks. A late payment from two years ago hurts less than a late payment from two months ago. If you've had recent on-time payments—even on a small secured card or a store card—mention that in your application or note. Some issuers allow you to add a brief statement explaining your situation.

Employment and income stability also factor in. If you've been at the same job for at least a year, that's a positive signal. Self-employed income counts too, but you may need to provide tax returns or bank statements to prove it. The income threshold for bad-credit card approval is usually low—$15,000 to $25,000 annually—so most people who work meet it.

How to improve your odds of approval

Start with your own bank or credit union. If you have a checking or savings account there, apply for their secured card first. Banks are more willing to approve existing customers, and you already have a relationship with them. If your bank doesn't offer a secured card, ask whether they have a bad-credit card option.

If you're applying to a bank where you don't have an account, open a checking account first and let it sit for a few weeks. This gives the bank a small window into how you manage money. You don't need to keep a large balance—even $100 to $200 shows activity and responsibility.

Avoid applying to multiple cards in a short period. Each application creates a hard inquiry on your credit report, and multiple inquiries in a few weeks can lower your score by a few points. Space applications out by at least two weeks. If you're denied, ask why—some issuers will tell you whether it was income, credit score, or another factor, and that information helps you decide whether to try again or try a different card.

What happens after you get approved

Once you have a card, your goal is to use it in a way that improves your credit score. That means making small purchases and paying them off in full every month. Aim to keep your balance below 30% of your credit limit. If your limit is $500, try not to carry a balance above $150. This shows lenders you can manage credit responsibly without maxing out.

Set up automatic payments if possible. Many card issuers let you schedule a payment for the same day every month. Automatic payments remove the risk of forgetting and missing a due date, which is one of the most damaging things you can do to your credit score. Even one late payment can erase months of good behavior.

After six to twelve months of on-time payments and low balances, your credit score should improve by 50 to 100 points. At that point, you become may be able to access for better cards with lower rates and fewer fees. You can then apply for a standard card, get approved, and move away from the expensive bad-credit options. Keep your first card open even after you get a better one—closing it can actually hurt your score by reducing your total available credit.

Red flags: cards and offers to avoid

Some companies prey on people with bad credit by charging excessive fees or making false promises. Here's what to watch for: any card that charges a fee just to apply, any company that guarantees approval without checking your credit, and any card that charges monthly fees in addition to an annual fee. Legitimate bad-credit cards charge one annual fee, not multiple fees stacked on top of each other.

Also avoid cards that require you to buy a "starter package" of merchandise or services to activate the card. That's not how credit cards work. Real credit cards come with a credit limit and a billing statement, not a product you have to purchase.

If you see an offer online that sounds too good to be true—"may provide approval," "bad credit okay," "no credit check"—research the company first. Check whether they're listed with the Consumer Financial Protection Bureau (CFPB) or have complaints filed against them. The CFPB website lets you search by company name and see what issues other people have reported.

Frequently Asked Questions

How bad does my credit have to be to need a bad-credit card?

Most people with a credit score below 620 will have trouble getting approved for standard credit cards. Scores between 580 and 669 are considered fair or poor credit. If your score is below 580, a secured card is almost always your best option. You can check your own credit score for free through AnnualCreditReport.com or through your bank's website.

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

The application itself causes a small, temporary dip because the issuer runs a hard inquiry. That dip usually recovers within a few months. The card itself helps your score over time because it adds to your payment history and available credit. The key is using it responsibly—late payments or high balances will hurt your score far more than the initial inquiry.

Can I use a bad-credit card to rebuild my credit if I have no credit history?

Yes. People with no credit history and people with bad credit can both benefit from a secured card. The card reports your payment activity to the credit bureaus, which builds a credit history from scratch. After twelve to eighteen months of on-time payments, you'll have enough history to may have access to for better cards and other credit products.

What's the difference between a bad-credit card and a store card?

Store cards (like Target or Walmart cards) are easier to get approved for and don't require a deposit, but they only work at that store. Credit cards work anywhere. Store cards can help your credit score, but a credit card is more useful because you can use it everywhere. If you're denied for a credit card, a store card can be a stepping stone while you build your score.

Should I get a co-signer for a bad-credit card?

Most bad-credit card issuers don't accept co-signers because they're already taking on higher risk. A co-signer makes sense for loans or mortgages, but for credit cards, a secured card is a better path. You put down your own money instead of asking someone else to vouch for you, and you build your own credit history independently.