Credit Cards That Work When Your Score Is Low

The best card for a low credit score is a secured credit card, because it requires a cash deposit instead of relying on your credit history

A secured credit card works differently from a regular card. You put down a cash deposit — usually between $200 and $2,500 — and that deposit becomes your credit limit. You then use the card like any other card, making purchases and paying your bill each month. The deposit stays in a separate account and is not touched unless you stop paying your bill.

Secured cards exist specifically because traditional card issuers won't approve people with low credit scores. By requiring a deposit, the card company removes most of their risk. This means you can actually get approved when other cards would reject you outright. As you use the card responsibly — making on-time payments and keeping your balance low — you build a record that shows lenders you can handle credit, which over time improves your score.

The alternative is a store card or credit-builder card, but these come with real tradeoffs. Store cards often have higher interest rates and only work at one retailer. Credit-builder cards (sometimes called "fresh start" cards) are designed for people rebuilding credit but typically charge annual fees and have very low credit limits. A secured card is usually the stronger choice because it reports to all three credit bureaus, works anywhere Visa or Mastercard is accepted, and gives you more control over your credit limit.

Key Takeaways

• A secured credit card requires a cash deposit that becomes your credit limit, making approval possible even with a low credit score.
• Your deposit is held separately and not used to pay your bill — you pay your charges like a regular card, and the deposit stays untouched if you pay on time.
• Secured cards report to all three credit bureaus, so responsible use directly improves your credit score over months and years.
• Most secured cards let you graduate to a regular unsecured card after 6 to 18 months of on-time payments, at which point your deposit is returned.
• Store cards and credit-builder cards are alternatives but usually cost more in fees or interest and offer fewer places to use them.

How a secured card actually improves your credit score

Your credit score is built from five main factors: payment history (35 percent), amounts you owe (30 percent), length of credit history (15 percent), new credit inquiries (10 percent), and credit mix (10 percent). A secured card helps with most of these.

When you make on-time payments on a secured card, that payment history gets reported to Equifax, Experian, and TransUnion. Each on-time payment adds to your track record. At the same time, if you keep your balance low — ideally under 30 percent of your credit limit — you show lenders that you are not maxing out available credit. Over 6 to 12 months of responsible use, these two factors alone can move your score noticeably.

The deposit itself does not directly help your score (it is not reported as money you own), but it removes the barrier to getting a card in the first place. Without it, you would have no way to build that payment history at all.

What to look for when choosing a secured card

Not all secured cards are the same. The main differences are the deposit amount, the annual fee, the interest rate, and whether the card reports to all three credit bureaus.

Deposit range: Most secured cards require between $200 and $2,500. Start with the lowest amount you can afford. A $200 deposit gives you a $200 credit limit, which is enough to build history without overextending yourself. Some cards offer higher limits if you deposit more, but that is optional.

Annual fee: Many secured cards charge an annual fee between $0 and $95. A card with no annual fee is better if you can find one, but a small fee ($25 to $35) is worth paying if the card reports to all three bureaus and has a low interest rate. Avoid cards charging more than $50 annually.

Interest rate (APR): Secured cards typically charge between 18 and 24 percent APR. This is higher than regular cards, but it matters only if you carry a balance. If you pay your full bill each month, you pay no interest at all. Still, look for a card on the lower end of this range.

Reporting to credit bureaus: This is non-negotiable. Your card must report to Equifax, Experian, and TransUnion. If it reports to only one or two, your score improvement will be slower. Check the card's terms or call the issuer to confirm before you apply.

How to use a secured card to actually build credit

Getting the card is the first step. How you use it determines whether your score improves or stays stuck.

Make small purchases — groceries, gas, a coffee — and pay the full bill before the due date every single month. This is the most important rule. One late payment can damage your score significantly and erase months of progress. Set up automatic payments if that helps you remember.

Keep your balance low. If your credit limit is $500, try not to carry a balance higher than $150. This shows lenders you are not dependent on credit. The lower your balance relative to your limit, the better for your score.

Do not close the card once you graduate to a regular card (most issuers convert your secured card after 6 to 18 months of on-time payments). Closing it removes that account from your credit history, which can actually lower your score. Keep it open and use it occasionally, even if you have moved on to other cards.

Secured cards versus store cards and credit-builder cards

A store card (like a Target or Amazon card) is easier to get approved for than a regular card, but it only works at that one store or website. This limits how much you can use it to build credit. Store cards also often charge higher interest rates — sometimes 20 to 25 percent — and may not report to all three credit bureaus. They can be useful as a second card once you already have a secured card, but they should not be your first choice.

Credit-builder cards are designed specifically for people rebuilding credit. They typically charge an annual fee ($35 to $99), have very low credit limits ($300 to $500), and sometimes require you to make a deposit or pay a monthly fee. The advantage is that they are easier to get approved for than even a secured card. The disadvantage is that the fees add up, and the low limits mean you cannot use the card for much. They work best as a second card alongside a secured card, not as a replacement.

A secured card sits in the middle: it requires a deposit (which you get back), but it has no annual fee on many options, works anywhere Visa or Mastercard is accepted, and reports to all three bureaus. This makes it the strongest starting point for most people with low credit scores.

When your secured card graduates to a regular card

After 6 to 18 months of on-time payments (the timeline varies by issuer), most secured card companies will automatically convert your account to a regular unsecured card. You do not have to do anything — the issuer reviews your account and makes the switch.

When this happens, your deposit is returned to you. Some issuers mail a check; others deposit it back into the account you originally funded. The card itself stays open and active, and your credit limit may increase. Your credit history with that card continues to count toward your credit score, so keeping the account open is valuable even after you have moved on to other cards.

If your issuer does not automatically convert your card after 18 months, you can call and ask. Some will do it on request if your payment history is clean. If they refuse, you have built enough credit history by that point to apply for a regular card elsewhere.

Common mistakes to avoid with a secured card

The most common mistake is carrying a balance and paying interest. A secured card is a tool to build credit, not a way to borrow money cheaply. If you cannot pay your full bill each month, you are using the card wrong. Cut back on purchases until you can pay in full.

Another mistake is applying for too many cards at once. Each application creates a hard inquiry on your credit report, which temporarily lowers your score. Space out applications by at least three to six months. Start with one secured card, use it responsibly for several months, then consider adding a second card if you need one.

Do not assume a secured card is permanent. Many people forget that their deposit is refundable and worry they are losing money. Your deposit is yours — it comes back when you graduate to a regular card or close the account. This is not a fee; it is collateral.

Frequently Asked Questions

Can I use a secured card right away, or do I have to wait for approval?

Most secured cards approve you within one to three business days if you apply online. Some issuers approve instantly. You can usually start using the card within a week of approval. The main requirement is having the deposit amount available — you will need to fund the card before you can use it.

What happens if I miss a payment on a secured card?

A missed payment is reported to all three credit bureaus and damages your score. The issuer may also charge a late fee (typically $25 to $35) and increase your interest rate. If you miss multiple payments, the issuer can close your account and use your deposit to cover what you owe. This is why on-time payment is critical.

Can I increase my credit limit on a secured card?

Yes. After several months of on-time payments, you can ask your issuer to increase your limit by depositing more money. Some issuers also increase your limit automatically. A higher limit gives you more room to build credit, but only if you keep your balance low.

How long does it take to see my credit score improve?

Most people see movement within three to six months of on-time payments. The bigger improvements usually come after 12 months. Credit scores update monthly, so check yours after your first few payments to confirm the card is reporting correctly.

Should I get a secured card if I already have a regular credit card?

If you already have a regular card and use it responsibly, you do not need a secured card. A secured card is for people who cannot get approved for regular cards. If you have been rejected for regular cards, a secured card is your next step.