The best credit cards for bad credit include the Capital One Platinum Secured Credit Card, the OpenSky® Secured Visa® Credit Card, and the Milestone® Unsecured Mastercard®, among other options. These cards can offer options for people who are finding it challenging to get approved for credit cards that require higher credit scores.
Keep in mind that credit card issuers consider several factors in addition to your credit score and history when considering a credit card application. That said, you may be able to qualify for these cards even with bad or poor credit.
The best credit cards for bad credit in May 2023
- Best for no annual fees: Capital One Platinum Secured Credit Card
- Best for no credit history: OpenSky® Secured Visa® Credit Card
- Best for earning cashback rewards: Credit One Bank Platinum Visa Card
- Best for past credit issues: Milestone® Unsecured Mastercard®
- Best for low APR: DCU Visa®️ Platinum Secured Credit Card
- Best for pre-qualification: Indigo Mastercard®
Comparison of the best credit cards for bad credit
|Card name||Best for||Why it’s special|
|Capital One Platinum Secured Credit Card||$0 annual fee||You can put down a security deposit as low as $49|
|OpenSky® Secured Visa® Credit Card||No credit history||Borrowers can qualify for the card without undergoing a credit check|
|Credit One Bank Platinum Visa Card||Earning cashback rewards||Earn 1% cash back in select spending categories|
|Milestone® Unsecured Mastercard®||Past credit issues||You can qualify for the card even if you declared bankruptcy in the past|
|DCU Visa®️ Platinum Secured Credit Card||Low variable APR||$0 annual fee and a low regular APR|
|Indigo Mastercard®||Pre-qualification||You don't need to make a deposit and you find out the terms before a hard inquiry is performed|
Capital One Platinum Secured Credit Card: Best no-annual-fee card
Although some secured credit cards require you to put down hundreds of dollars as a security deposit, the Capital One Platinum Secured Credit Card has low upfront deposit requirements and a $0 annual fee.
Depending on your credit, your minimum 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 automatically reviews your account and considers 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 1 . Capital One also offers convenient online access to your account through its mobile app.
Read our Capital One Platinum Secured review.
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 could help you build better credit over time.
Read our OpenSky Secured Visa Credit Card review.
Credit One Bank Platinum Visa Card: Best for earning cashback rewards
Credit cards for people with poor or fair credit or no credit history are usually bare-bones, offering few benefits or perks. Finding a rewards credit card is rare, which is why the Credit One Bank Platinum Visa Card is a standout option if you have bad credit or limited credit.
With this cash rewards credit 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.
Read our Credit One Bank Unsecured Platinum Visa review.
Milestone® Unsecured 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® Unsecured 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 bad credit, it doesn’t have extra fees like monthly maintenance fees or program fees.
Among the benefits this credit card offers are free Mastercard fraud protection and 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.
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 16.25% (variable) APR on purchases. The card also has 0% balance transfer fees, and no cash advance fees or foreign transaction fees.
Indigo Mastercard®: Best for pre-qualification
The annual fee for the Indigo 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, the annual fee, and the 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.
Read our Indigo Platinum Mastercard review.
How to choose a credit card for bad credit
Credit cards for bad credit may come with their own limitations or downsides. This is partly because lenders try to safeguard themselves in the event that you are unable to pay back your debt by having these restrictions in place. However, you still have several options to choose from.
Here is how to make up your mind:
- Determine your creditworthiness: Find out what is your credit score before applying for a credit card. You can use this information to figure out what kind of credit cards you may want to apply for.
- Explore various credit card options: There are both secured and unsecured credit cards available for people with bad credit. Find out which type best suits your needs and financial objectives by doing research on each one.
- Think about the credit limit: A credit card for people with bad credit might have a lower credit limit than other credit cards. Make sure to pick a card with a credit limit that satisfies your requirements and enables you to make the purchases you need.
- Choose a card that reports to credit bureaus: Select a credit card that sends reports to the main credit bureaus, including Equifax, Experian, and Transunion, to help you work on your credit score. By paying your debts on time and limiting your credit usage, you can gradually build your credit history.
- Understand your annual percentage rate (APR): A credit card for people with bad credit may have a higher APR than other cards. If you plan to carry a balance, look for a credit card with a lower APR to reduce how much money you pay on interest charges.
- Look for a card that earns rewards: While this shouldn't be your main concern when selecting a credit card for bad credit, rewards can add value and eventually help you save money.
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 Capital One Platinum Secured, 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 ratio, 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 on 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. Many credit-building services also give you access to credit score tracking.
- Know the rules: If you successfully open a new credit card, be sure you understand the card details to help keep your account in good standing. 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 with VantageScore or vice versa. Additionally, keep in mind that credit scores are guidelines and don't guarantee approval for specific cards.
What is the difference between an unsecured and a secured credit card?
You have probably seen two types of 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 Capital One Platinum Secured 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.
Credit cards for bad credit: bottom line
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 other types of credit cards with more benefits and rewards. Responsible use of a credit card can be a tool to help you toward your personal finance goals.
Explore more options for other levels of credit in our lists of the best credit cards for fair credit and the best credit cards for good credit.
To select the best credit cards for bad credit, we looked at 15 different credit cards from a variety of credit card issuers. All of the cards were designed for consumers with low credit scores.
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.
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