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If you have bad credit, you may think you won’t be able to open a credit card — but there are some cards designed to help those with bad credit improve their scores.
The problem is that there tends to be slim pickings when it comes to credit cards for bad credit that have good terms. You can easily find credit cards that boast the opportunity to improve your credit score, but they may be laden with high fees. That’s why we recommend several secured cards in this guide that can help you build credit and have decent terms. A secured card is nearly identical to a regular, unsecured card, but you need to make a deposit — typically $200 — to access a line of credit. Use your secured card responsibly and you can achieve fair, good, or excellent credit.
Not sure what your credit score is? LendingTree, our parent company, offers your free credit score through My LendingTree, which also includes the ability to check what factors affect your score and find ways to boost it.
The credit cards mentioned below are ideal for people with bad credit that are looking to rebuild their credit. When used responsibly, these cards can help you improve your credit so you can be on your way to an unsecured card with better terms. After the card recommendations, we list cards to avoid, the five factors making up your credit score, and how you can take actions that help you build credit.
The best credit cards for bad credit include:
- Best overall credit card for bad credit: Discover it® Secured
- Best for bad credit with a low deposit: Capital One® Secured Mastercard®
- Best for bad credit with no credit check: OpenSky® Secured Visa® Credit Card
- Best for bad credit with low interest and fees: DCU Visa® Platinum Secured Credit Card
Best overall credit card for bad credit: Discover it® Secured
2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. 1% on everything else*
Credit line will equal your security deposit of $200 or more*
No annual fee, no late fee on your first late payment. No penalty APR*
- No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
- Your Secured Credit Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
- We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
- Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
- See Rates & Fees
See additional details for Discover it® Secured
What we like: The Discover it® Secured has a $0 annual fee and is great for people with poor/new to credit. There is a typical $200 security deposit required, but you can receive it back if you pay your balance in full and close your account or if Discover upgrades you to an unsecured card.
One helpful feature provided by this card is a monthly account review starting at eight months from account opening. During these automatic reviews, Discover will check to see if you can receive your deposit back while still enjoying the benefits of your card.
Speaking of benefits, this card has a cashback program where you can earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. 1% on everything else*. This is hard to come by with secured cards and is a great way to earn rewards while building credit. Plus, Discover will automatically match all the cash back you earn at the end of your first year. Additional perks include no foreign transaction fees, no fee on your first late payment and no penalty APR, among others.
What to watch out for: Overall, this card really doesn’t have any major drawbacks. There is 24.74% Variable APR, though that’s pretty standard for cards designed for poor/new to credit. Make sure you pay your bill on time and in full each month so you don’t incur interest charges and risk falling into debt.
Read our full review of the Discover it® Secured here.
Best for bad credit with a low deposit: Capital One® Secured Mastercard®
Build Credit When Used Responsibly
$49, $99, or $200
- No annual fee, and all the credit building benefits with responsible card use
- Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
- You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
- Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
- Easily manage your account 24/7 with online access, by phone or using our mobile app
- It's a credit card accepted at millions of locations worldwide
See additional details for Capital One® Secured Mastercard®
What we like: The Capital One® Secured Mastercard® is another $0 annual fee option from a major bank that can help you improve your credit when used properly. This card offers the potential for a lower security deposit with minimums of $49, $99, or $200, depending on your creditworthiness. If you may struggle to deposit the average $200 other secured cards charge, the chance to receive a $49 or $99 deposit is welcome.
There are no rewards provided by this card, but you can receive a higher credit limit by making your first five monthly payments on time — without needing to make an additional deposit. This can provide you with expanded buying power.
What to watch out for: This card is a solid offering, with no major pitfalls to beware of. The APR is in line with other limited/bad credit cards at 24.99% (Variable). It won’t be much of an issue if you pay every bill on time and in full.
Read our full review of the Capital One® Secured Mastercard® here.
Best for bad credit with no credit check: OpenSky® Secured Visa® Credit Card
Free Credit Bureau Reporting
$200 - $3,000 Credit Line*
- Build Your Credit fast with our monthly reporting to all 3 major credit bureaus.
- Choose your credit line as low as $200 up to $3000, secured by a fully-refundable* security deposit.
- Security deposit needs to be submitted before the credit card can be issued.
- No credit check necessary and no checking account required; apply in less than 5 minutes.
- Extra credit when you need it, increase your credit line up to $5000.
- Access to online financial education.
- *View our Cardholder Agreement located at the bottom of the application page for details of the card.
See additional details for OpenSky® Secured Visa® Credit Card
What we like: The OpenSky® Secured Visa® Credit Card is a no-frills secured card for people with no/limited credit. Whether you have a less-than-stellar credit score or not, it doesn’t matter since OpenSky® won’t run a credit report during the application process. This can be a relief if you think your bad credit history will prevent you from opening a credit card, but note that they still require other financial information, like annual income and monthly housing payment, during the application process. Besides no credit check, this card doesn’t have any noteworthy perks.
What to watch out for: While this card can help you build credit, it does come with a $35 annual fee, unlike the prior two cards mentioned. The $35 annual fee reduces your initial available credit limit, so if you’re approved for a $200 credit limit, your initial available credit limit will be $165.
Read our full review of the OpenSky® Secured Visa® Credit Card here.
Best for bad credit with low interest and fees: DCU Visa® Platinum Secured Credit Card
What we like: The DCU Visa® Platinum Secured Credit Card has a $0 annual fee and one of the lowest APRs for secured cards at 13.25% variable. A card with a low APR is ideal if you think you may carry a balance month-to-month. While it’s never ideal to carry a balance, we know it may be unavoidable sometimes. A low 13.25% variable APR can minimize interest charges compared to cards with APRs around 25%. This card also comes with several additional perks, including car rental insurance, travel insurance and warranty benefits.
What to watch out for: Compared to other secured cards, the minimum deposit is high at $500 for this card. You may have difficulty setting aside the $500 deposit, so we recommend checking out some of the cards mentioned earlier that may offer deposits as low as $49.
Worst credit cards for bad credit
During your search for credit cards for bad credit, you may have come across companies like First Premier, Horizon Card Services™, Credit One and Total Visa. The credit cards offered by these companies have numerous fees that may include:
- Monthly service fee
- Account validation fee
- Authorized user fee
- Express payment fee
In addition to fees, the terms for these cards may not be clearly disclosed prior to applying. For example, the terms and conditions of Credit One cards state that you won’t know the exact terms you receive until after you submit a prequalification request. That means you’re unsure of the annual fee you receive — and it varies greatly ($0-$99).
Additional drawbacks can include limited use of your card — the Horizon Gold Card can only be used on Horizon’s online shopping site. So, if you’re looking for a versatile credit card, this isn’t the best option.
The cards offered by First Premier, Horizon Card Services™, Credit One and Total Visa are unsecured, meaning no deposit is required to access credit — but while it may be tempting to opt for an unsecured card, we recommend avoiding these cards altogether. Stick to the secured cards mentioned earlier in this post that offer more straightforward terms and less fees.
How to build credit
If you have bad credit, it’s important to build credit so you can achieve a fair, good or excellent credit score. The better your credit score, the more credit products you can qualify for and the better the terms. To understand how to build credit, you first need to familiarize yourself with the five key factors comprising your FICO® Score:
- Payment history (35%): Whether you pay on time or not.
- Amounts owed (aka utilization) (30%): How much credit you use compared with your total credit limit across all accounts.
- Length of credit history (15%): Average length of time your credit accounts have been open.
- New credit (10%): How often you open new accounts and have credit inquiries.
- Credit mix (10%): The variety of credit products you have — credit cards, loans, mortgages, etc.
There are several steps you can take to build credit that correspond with the five key credit factors:
- Pay on time and in full each month. Payment history is the most important factor of your credit score — therefore, it’s key to always pay your bill by the due date. It’s also a good idea to pay it in full so you avoid carrying a balance month to month and racking up interest charges.
- Maintain a low utilization rate. The second most important factor of your credit score is utilization. This is the amount of credit you use divided by the total amount of credit you have. For example, if you have a credit limit of $1,000 on one card and a $4,000 credit limit on another card, your total amount of credit is $5,000. And if you spend a total of $3,000 across both cards, your utilization would be 60% ($3,000 / $5,000). That’s quite high; we recommend keeping a utilization below 30%.
- Don’t open too many credit products in a short time period. The average length of time your credit accounts have been opened is a factor of your credit score, and so is the number of new accounts you’ve inquired about or opened. Each time you apply and open a credit product, an inquiry is performed which temporarily lowers your credit score. And, if you end up opening several accounts within a short period of time, your length of credit history will decrease. For example, if you have a credit card that’s 5 years old and you open a new card today, the average length of your credit decreases to 2.5 years. Then, if you open a personal loan tomorrow, it’ll drop to a little over 1.5 years.