If you are one of the 16% of Americans with a poor FICO credit score, you know how difficult it can be to find a credit card. Most cards are geared toward people with fair credit or better, so you may feel there are no credit card offers available to you. But in truth, you do have options no matter the state of your personal finances.
To help you find the right card and start building a positive credit history, we researched credit cards on the market designed for people with bad credit or no credit history. Below, we’ve identified some of the best credit cards for poor credit so that you can easily compare credit cards and pick the one that’s right for you.
The best credit cards for poor credit
- Best for earning rewards: Credit One Bank Unsecured Platinum Visa
- Best for past credit issues: Milestone Gold Mastercard
- Best for no annual fees: Secured MasterCard® from Capital One
- Best for no credit history: OpenSky Secured Visa Credit Card
- Best for low APR: DCU Visa Platinum Secured Credit Card
- Best for pre-qualification: Indigo Platinum Mastercard
The best credit cards for poor credit for May 2021
|Card name||Best for||Why it’s special|
|Credit One Bank Unsecured Platinum Visa||Earning rewards||Earn 1% cash back in select spending categories|
|Milestone Gold Mastercard||Past credit issues||You can qualify for the card even if you declared bankruptcy in the past|
|Secured MasterCard from Capital One||$0 annual fee||You can put down a security deposit as low as $49|
|OpenSky Secured Visa Credit Card||No credit history||You can qualify for the card without undergoing a credit check|
|DCU Visa Platinum Secured Credit Card||Low APR||$0 annual fee and a low regular APR|
|Indigo Platinum Mastercard||Pre-qualification||You don't need to make a deposit and you find out terms before a hard inquiry is performed|
Credit One Bank Unsecured Platinum Visa: Best for earning rewards
Credit cards for people with poor credit or no credit history are usually bare-bones, offering few benefits or perks. Finding a card that has a rewards program is rare, which is why the Credit One Bank Unsecured Platinum Visa is a standout option if you have bad credit.
With this cashback rewards card, cardholders can earn 1% cash back on eligible gas, grocery, mobile phone service, internet service, and cable and satellite TV service purchases on eligible purchases. Rewards are automatically redeemed as statement credits.
The annual fee on this card is $39. This fee is deducted from your initial credit limit. The card does also have a authorized user fee, but it doesn’t have monthly maintenance or program fees.
Milestone Gold Mastercard: Best for past credit issues
If you previously had credit issues, it can be difficult to qualify for an unsecured credit card, especially if you declared bankruptcy in the past. The Milestone Gold Mastercard is one of the few unsecured credit cards that accept applicants who have a history of bankruptcy. If approved, you can qualify for a $300 credit line.
The card does have a $35 annual fee that is deducted from your initial credit limit. But unlike some other cards geared toward consumers with poor credit, it doesn’t have extra fees like monthly maintenance fees or program fees.
The card also offers free Mastercard fraud protection and does monthly reporting of your payment activity to the three major credit bureaus (Equifax, Experian, and TransUnion). That means it can help you build credit. You can also find out whether you qualify for the card online without affecting your credit score.
Secured MasterCard from Capital One: Best no-annual fee card
Although some secured credit cards require you to put down hundreds of dollars as a security deposit, the Secured MasterCard from Capital One has low deposit minimums and a $0 annual fee. Depending on your credit, your security deposit could be $49, $99, or $200, and your initial credit line will be $200. You'll need to have access to an authorized bank account to transfer the money for the deposit.
Capital One will automatically review your account and consider you for a credit line increase after just six months, potentially giving you a higher credit limit and more spending power. Plus, the card has benefits like travel accident insurance, extended warranty protection, and rental car insurance. Capital One also offers convenient online access to your account through its mobile app.
OpenSky Secured Visa Credit Card: Best no-credit-check card
If you have poor credit or no credit at all, the OpenSky Secured Visa Credit Card may be a good option for you. Unlike other cards, the OpenSky Secured Visa does not perform a credit inquiry during the application process. Instead, you choose your own credit line and secure it by making a refundable deposit. With this card, your line of credit can be between $200 and $3,000 — you decide how much spending power you want to have.
The OpenSky card does have a $35 annual fee, but it doesn’t have monthly maintenance fees or program fees.
OpenSky reports your account activity to the major credit bureaus every month, so your responsible credit habits can help improve your credit over time.
DCU Visa Platinum Secured Credit Card: Best for low APR
Although you ideally should never carry a balance on a credit card, it may not always be possible to pay off your statement balance in full each month. In addition, it is pretty rare for a credit card for poor credit to offer any sort of intro APR. So if you may carry a balance on your credit card from time to time, check out the DCU Visa Platinum Secured Credit Card.
Although this Visa card is a secured card and requires a refundable security deposit, it has a $0 annual fee and it has a comparatively low interest rate on purchases. The card also has no balance transfer fees, cash advance fees, or foreign transaction fees.
Indigo Platinum Mastercard
The annual fee for the Indigo Platinum Mastercard is unique. The amount of the fee is determined by your creditworthiness. Upon approval, you could be assigned an annual fee of $99 ($75 the first year), $59, or $0. The better your credit, the better your chances of getting a $0 fee.
The Indigo also has the unique feature of offering a pre-qualification step. During the online application, you'll be asked to enter basic information, including contact info and Social Security number. The card you qualify for, annual fee, and interest rate will then be given to you to consider before deciding if you want to submit a complete application. This means you can decide whether or not the card you qualify for will be a good fit before you have a hard inquiry done to your credit report.
How we chose these cards
To select the best credit cards for poor credit, we looked at 15 different credit cards from a variety of credit card issuers. All of the cards were designed for consumers with poor or bad credit.
To narrow down our selection, we eliminated cards that charged monthly maintenance fees and program fees, as cards that charge those fees can be prohibitively expensive. From the remaining cards, we chose cards based on their benefits, regular APR, and credit requirements.
How a credit card can help you improve your credit score
Over time, the responsible use of credit cards designed for people with poor credit or bad credit — even secured cards — can help you improve your credit score. Credit cards, such as the primor Visa Gold Secured Credit Card, report your on-time payments to each of the three credit bureaus which helps build your credit. Additionally, many secured cards allow you to graduate to an unsecured card over time and will even refund your security deposit. Once you achieve a good credit score, many more credit card products will become available to you as well.
If you want to learn how to improve your credit score, follow these tips:
- Set up payment reminders. Your payment history makes up 35% of your FICO score. To improve your credit, set up automatic monthly payments or create calendar reminders to ensure you never miss a due date and always make on-time payments.
- Keep your balance low. Both VantageScore and FICO look at your credit utilization, or how much of your available credit line you use, when determining your score. Credit experts recommend using no more than 30% of your available credit. If you have a $300 credit limit, that means you should keep your balance under $90.
- Limit new credit applications. Opening new accounts can cause your credit score to drop. If you feel a need to have multiple credit cards, try to spread out your new credit applications to minimize the number of hard inquiries and there also the impact to your credit score.
- Regularly check your credit score: You can get free credit score access through services like Credit Karma or Experian Boost. You can also request a free credit report through AnnualCreditReport.com.
- Know the rules: If you successfully open a new credit card account, be sure you understand all the details of the card. Read the cardholder agreement so you understand any applicable fees and deadlines. The last thing you want when you're trying to build credit is to make an accidental late payment or incur charges simply because you didn't know how the card worked.
What is a bad or poor credit score?
There are different credit scoring models, so what constitutes a bad or poor credit score depends on what credit score model a lender uses. One of the most commonly used models is the FICO score, which ranges from 300 to 850. According to the FICO scale, a poor credit score ranges between 300 and 579.
VantageScore is another scoring model that ranges from 300 to 850. Unlike FICO, VantageScore distinguishes between very poor and poor credit. Very poor is a score that falls between 300 and 499, whereas poor credit is a score between 500 and 600.
FICO and VantageScore use the same information from your credit reports from the three main credit bureaus: Experian, Equifax, and TransUnion. However, your score can vary between scoring models because they weigh the information differently, so your score may be higher with FICO than VantageScore or vice versa.
What is the difference between an unsecured and a secured credit card?
You have probably seen two types of credit cards that are available: unsecured and secured cards. With a secured card, you deposit a fixed amount of money into an account. The credit card company holds onto your deposit as collateral and extends you a credit line that is typically equal to your deposit amount (the Secured MasterCard from Capital One is an exception to this). Similar to a regular credit card, once you reach the credit limit, you can’t use your card again until you make a payment.
Unsecured cards work quite differently. Unlike secured cards, they don’t require a deposit. Instead, credit card companies issue a credit line limit based on your credit score record and income.
Is a credit card or a prepaid debit card better?
Prepaid debit cards are similar to traditional debit cards. But instead of being tied to a bank account, a prepaid card is its own account. You can only spend the money you’ve loaded into that account.
Prepaid cards can be a great alternative to credit cards if you’re worried about overspending. You can load them with a set amount based on your budget so you don’t accidentally spend more than you should.
A prepaid card will not help you when it comes to building credit, though, and they often charge a lot of fees. That said, if qualifying for a credit card is just not happening for you, some of the best prepaid debit cards do offer low fees and rewards programs.
Although having a poor or bad credit score can limit your credit card options, there are cards available that you can use for building credit and establishing good financial habits. Over time, using the best credit cards for poor credit can help you with rebuilding credit and maybe even allow you to graduate to unsecured cards with more benefits and rewards. Responsible use of a credit card can be a tool to help you toward your personal finance goals.