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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.
Key takeaways
- Many of the best credit cards for bad credit include secured credit cards, which require a security deposit. There are also some unsecured credit cards available with less strict eligibility requirements.
- Some credit cards provide pre-qualification tools to help see if you might be approved for a credit card before applying and initiating a hard credit inquiry.
- The credit cards we recommend may help improve your credit score by using them responsibly and making timely payments. This may help you qualify for credit cards with stricter requirements.
The best credit cards for bad credit in April 2024
- 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 |
|
$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 |
|
Earning cashback rewards | Earn 1% cash back in select spending categories |
|
Past credit issues | You can qualify for the card even if you declared bankruptcy in the past |
|
Low variable APR | $0 annual fee and a low regular APR |
|
Pre-qualification | You don't need to make a deposit and you find out the terms before a hard inquiry is performed |
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Capital One Platinum Secured Credit Card: Best for no annual fee
- $0 annual fee
- Security deposit is refundable
- Opportunities for credit line increases and upgrade to an unsecured card
- Reports to the three major credit bureaus
- Requires $49, $99, or $200 minimum security deposit
Why we like it: You don’t have to put a lot of money down for a security deposit with the Capital One Platinum Secured. This card has a $0 annual fee, which makes it easy to keep it year after year.
It’s also nice that the security deposit is refundable, and you might have opportunities for credit line increases in as little as six months. If you continue using your card responsibly, such as making on-time payments, you may be able to upgrade to an unsecured version.
What we don’t like: Even though it’s a refundable security deposit, you still have to put money down to have a line of credit with this card.
Learn more in our Capital One Platinum Secured review.
OpenSky® Secured Visa® Credit Card: Best for no credit history
- No credit check to apply
- Security deposit is refundable
- Credit line evaluations every six months
- Reports to the three major credit bureaus
- $35 annual fee
- $200 minimum security deposit
Why we like it: There’s no credit check required to apply for the OpenSky Secured Visa. Your positive payment history is reported to the three major credit bureaus.
Even better, your credit line can increase through card evaluations that happen every six months. It’s also possible to graduate to an unsecured card in as little as six months if you use it responsibly and make on-time payments.
What we don’t like: There’s a $35 annual fee on top of the $200 minimum security deposit. Fortunately, the security deposit is refundable.
Learn more in our OpenSky Secured Visa Credit Card review.
Credit One Bank Platinum Visa Card: Best for earning cashback rewards
- Offers opportunities to earn cash back on eligible purchases
- No security deposit required
- Minimum credit line of $300
- $39 annual fee
Why we like it: As an unsecured cash rewards credit card, you don’t have to worry about putting down money for a security deposit. You’re also guaranteed a credit line of at least $300.
You can use the Credit One Bank Platinum Visa to earn 1% cash back on eligible gas, grocery, mobile phone service, internet service, and cable and satellite TV service purchases. Finding a credit card for poor or fair credit that offers rewards is rare, which is where the Credit One Bank Platinum Visa Card stands out.
What we don’t like: While you don’t have to put down a security deposit, you have to pay a $39 annual fee.
Learn more in our Credit One Bank Unsecured Platinum Visa review.
Milestone® Unsecured Mastercard®: Best for past credit issues
- Designed for people with challenging credit histories
- No security deposit required
- Fraud protection
- At least a $35 annual fee
Why we like it: The Milestone Unsecured Mastercard is an unsecured credit card, meaning your credit line isn’t tied to a security deposit.
It’s typically more difficult to qualify for unsecured credit cards, but the Milestone Mastercard doesn’t have strict eligibility requirements. People with credit history issues may still be able to qualify. You can determine your approval odds by pre-qualifying for this card online without affecting your credit score.
This credit card offers fraud protection and reports your payment activity to the three major credit bureaus (Equifax, Experian, and TransUnion). That means it can help you build credit.
What we don’t like: You have to pay at least a $35 annual fee, but it could go higher. Depending on your credit profile: $35, $59, or $75 the first year; $35, $59, or $99 thereafter.
DCU Visa®️ Platinum Secured Credit Card: Best for low APR
- $0 annual fee
- Relatively low 16.75% (variable) APR and 0% balance transfer fee
- Extended warranty protection
- Travel accident insurance
- Must be a credit union member
- $500 minimum security deposit
Why we like it: The DCU Visa Platinum Secured Credit Card has a $0 annual fee, a 0% balance transfer fee, and a relatively low 16.75% (variable) APR.
We generally don’t recommend carrying a balance and paying interest charges on a credit card, but having a lower APR could be helpful in certain situations.
The DCU Visa Platinum Secured also has no foreign transaction fees and provides these useful Visa benefits:
- Extended warranty protection
- Travel accident insurance
What we don’t like: You don’t have to be a DCU member to apply, but you’ll have to join the credit union if you’re approved and want your card. You also have to put down a $500 minimum deposit.
Indigo Mastercard®: Best for pre-qualification
- Allows you to pre-qualify with no impact to your credit score
- No security deposit requirement
- Variable annual fee
Why we like it: The Indigo Platinum Mastercard makes it easy to see your chances of qualifying through a pre-qualification step. During the online application, you'll be asked to enter basic information, including your personal information and Social Security number.
The card you qualify for, the annual fee, and the interest rate will be provided before you decide whether you want to submit a complete application. This gives you a chance to know if you qualify and what you qualify for before placing a hard inquiry on your credit report.
The Indigo Platinum is an unsecured credit card, so you don’t have to put down a security deposit.
What we don’t like: The annual fee varies depending on your credit profile. The annual fee could be as high as $99 (annual fee varies depending on which card you qualify for; it could be $0, $59, or $99 ($75 the first year)).
Learn more in 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, desired perks, 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 higher 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 card balance, look for a credit card with a lower APR to reduce how much money you pay on interest charges. Some cards may also offer 0% intro APR for a certain period of time.
- 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 that borrowers use 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: Account opening 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.
FAQ
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.
Methodology
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.
Help Build Your Credit
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OpenSky® Secured Visa® Credit Card
Current Offer
Apply in less than 5 minutes
Annual Fee
$35
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