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Updated: Oct 31, 2022, 8:57pm Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. When you have a credit score that’s less than stellar, it can be a challenge to get approved for a credit card. And when you apply for a card and get rejected that can further ding your credit score because of the credit inquiry reductions that come with any application. Borrowers facing poor credit still have several ways to gain access to credit. We’ve put together a list of our top card recommendations for “subprime borrowers” and created a guide to help you navigate receiving approval for a secured or unsecured credit card despite bad credit. You typically have two options when you have subpar credit and you’re seeking a credit card: a secured card, where you put down a security deposit equal to the line of credit you’re seeking or an unsecured credit card designed for those with poor credit. If you balk at the idea of putting down a deposit, know that many unsecured cards for people with bad credit often come laden with fees and sky-high APRs. If you go with a secured card, try to choose one that reports to all three major credit bureaus so your on-time payments can help build your credit score as quickly as possible. Whatever you choose, aim to use the new line of credit as a building block towards a stronger credit profile so you can qualify for better cards and rates on your other loans in the future. Show Summary The Best Credit Cards For Bad Credit
The Best Credit Cards For Bad CreditBest OverallPetal® 1 “No Annual Fee” Visa® Credit CardRegular APR22.99% - 32.49% (Variable) Why We Picked It Those whose credit score is less than perfect may be able to build a stronger credit profile by using the Petal 1 Visa Credit Card responsibly. It’s one of a tiny batch of credit cards aimed at those without great credit that don’t require an upfront security deposit. Pros & Cons
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Best Credit Union Card For Bad CreditNavy FCU nRewards® Secured Credit Card *Credit ScoreBad/Poor (0 - 649) Why We Picked It A secured card with no annual fees, no balance transfer fees and rewards, the NRewards is a solid choice for those who qualify and are eligible for the Navy Federal Credit Union. Pros & Cons
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Best for Newcomers to the U.S.Tomo Credit Card *Regular APRNo interest charges Credit ScoreNo credit check or credit history required Why We Picked It The Tomo Credit Card considers alternative metrics when evaluating your application, so it's worth considering if you don't have prior credit history. And, since this card reports to the three major consumer credit bureaus, using it responsibly can help you build good credit. Pros & Cons
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Best for No Credit CheckOpenSky® Secured Visa® Credit CardNo Rewards The OpenSky® Secured Visa® Credit Card does not earn rewards on purchases. Regular APR20.39% (variable) Credit ScoreNo credit check Why We Picked It OpenSky offers a solid path to rebuilding credit, with no credit check or bank account required. However, you'll have to come up with a minimum of $200 for the security deposit. Pros & Cons
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Best for First-Year BonusDiscover it® Secured Credit CardUp to 2% Reward Rate Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earnRead More Welcome BonusCashback Match™ Regular APR25.99% Variable APR Credit ScoreNew/Rebuilding Credit Why We Picked It In the secured credit world, the Discover it® Secured Credit Card stands above the competition. With an unlimited 1% cash back rate on all purchases, plus 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, no penalty APR and no annual fee, we love this card for those who need to rebuild their credit. The matching cash back reward at the end of your first year is a sweet bonus. Pros & Cons
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Best for Everyday RewardsBank of America® Customized Cash Rewards Secured Credit Card *Up to 3% Reward Rate Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores or home improvementRead More Regular APR26.99% variable Credit ScoreBad/Poor (0 - 649) Why We Picked It A secured card with no annual fee and the ability to earn rewards, this Bank of America card can provide a way forward for those needing to build their credit profile. Pros & Cons
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Here's a Summary of The Best Credit Cards For Bad CreditBest Credit Cards For Bad CreditMethodologyForbes Advisor analyzed dozens of credit cards marketed toward subprime borrowers. Factors taken into consideration for each category included the annual fee, any monthly fees, security deposit requirements, annual percentage rate (APR) and other benefits that come with card ownership like rewards and other extras. Best Credit Cards for Bad CreditBad credit is common. Consumers develop credit issues for a wide variety of reasons—most of which don’t involve any real wrongdoing on the part of the individual. Sometimes it’s nothing more than bad luck. Try explaining that to a credit card issuer, though! These companies tend to look at applicants as a calculation of risk vs. reward; on the scale that they work, a handful of metrics for creditworthiness sum up each individual. Embellishing a credit card application is a bad idea (and a crime) and there are simply no shortcuts, tricks or ways around hard numbers. This leaves subprime borrowers with two main options: a secured credit card, which typically requires a security deposit equal to the credit sought or an unsecured card specifically marketed to those with poor credit. Each option has its own pros and cons, and which to pursue, if either, depends on each individual’s goals and financial circumstances. What Is a Bad Credit Score?There are many different credit scoring models and each lender may have a particular version it prefers to use. This means the definition of what constitutes a bad credit score can vary among lenders. While there’s not exactly one-size-fits-all number marking the threshold between “bad” and “good” credit, a FICO score below 580 is generally considered very poor and “fair” usually describes scores between 580 and 669. Credit Cards and Credit ScoresThe lower your credit score, the more limited your options when it comes to credit cards. Typically, consumers with bad credit will only be able to receive approval for a secured card or a card with higher-than-average interest rates and other additional fees. Not only does a credit score play a central role in your application prospects, it can also have a direct impact on how favorable the terms of your eventual credit card plan are. Causes of Bad CreditBad credit doesn’t always happen overnight. Commonly, consumers end up with damaged credit because they repeatedly miss payments or default on what they owe for existing credit cards, loans, mortgages and the like. Any carrying of a credit card balance can have an impact, including paying late or making only the minimum payments on bills. Other actions can lower your score include filing for bankruptcy, repeatedly applying for out-of-reach credit cards, maxing out credit cards and even simply using a significant portion of your credit limit, which increases your credit utilization ratio. How To Tell If You Need a Credit Card for Bad CreditIf you aren’t quite sure whether or not a credit card for bad credit is your most suitable option, here are a few points to consider. Determine Your Credit ScoreIf you’re looking to apply for a credit card and aren’t quite sure what you might qualify for, you should check your credit score first to get an idea of where you stand. Depending on your results, it may be best to focus on cards with more lenient underwriting circumstances and work on improving your credit so you can apply for a better card down the line. If you’re not sure what to make of your credit score, find a way to talk with a financial expert about what exactly the numbers mean for you or check out our guide to good credit scores for background information. Consider Your Credit HistoryIf you already know you’ve had some major financial missteps—a bankruptcy, a loan default, a rocky history with credit card use—a credit card marketed to consumers with bad credit will likely be your most realistic option. Because of card issuers’ risk management practices, the most generous credit card plans are mainly accessible to borrowers with solid, developed credit histories. As with a credit score, a good credit history indicates “creditworthiness,” or trustworthiness with borrowing money, to the lender. If you’re unsure where your credit profile stands, you can get a free credit report once a year from each of the three major credit reporting agencies at annualcreditreport.com. How To Choose Credit Cards for Bad CreditGetting a credit card may actually be one of your best opportunities to start improving your credit profile. Here’s what to look for in cards designed for consumers with bad credit.
How To Get a Credit Card with Bad CreditKnowing where you stand on the credit spectrum is only the beginning. It’s equally important to have a clear sense of your goals in acquiring a credit card and an understanding of what’s realistically attainable. Secured vs. Unsecured Credit CardSecured Credit CardsWith a secured credit card, a refundable deposit or “collateral” is paid upfront and often acts as the cardholder’s credit limit, helping mitigate the risk assumed by the lender. This can be a good deal for credit card issuers (it’s what leads them to consider subprime borrowers in the first place) but for the same reasons it offers less value to the cardholder as it lacks some of the conventional benefits of borrowing. Why are secured credit cards even considered a line of credit in the first place? For the cardholder, secured credit cards function more like a debit or ATM card, with the plastic serving in day-to-day practice only as a convenient way to access money they already have. Technically speaking, however, credit is still being extended with secured cards. The issuer simply has the “collateral account” on hand if the cardholder falls short. Importantly, this means a secured credit card allows the cardholder to build credit. A secured card isn’t inherently any better at improving credit, but its accessibility makes it one of the simplest and most effective ways to get on the right track. This depends on one critical factor: The card will still in fact be paid off in full and on time. Secured cards also pose risk of further harm to your credit if bills go unpaid and, despite all credit being secured by deposit, high interest charges for late payments. Unsecured Credit CardsIf you simply lack credit history or haven’t built credit for long enough to earn a good credit score, secured cards can still be a rewarding option. An unsecured card may also be attainable in these cases and is often preferred by those without the means to provide a security deposit. Many unsecured cards are available and some are available to those without great credit. Be aware that not all unsecured cards for bad credit are created equal. Many of these cards come with high annual fees, which act like yearly subscription charges for use of the card. That’s in addition to other common fees such as account opening fees that can eat away at your available credit, raise your credit utilization rate and further negatively impact your credit. Unsecured cards for bad credit also typically come with sky-high annual percentage rates, or “APRs,” which heavily penalize carrying a balance and make this option riskier to the cardholder. Whatever you choose, aim to use the new line of credit as a building block toward a stronger credit profile so you can qualify for better cards and rates on other loans down the road. If you’re not sure you’ll be able to keep up with your bills regardless of which card you carry, it may be worth reconsidering a credit card for the time being in order to avoid debt and further harm to your credit. How To Get a Secured Credit Card with Bad CreditA secured credit card is typically easier to get for those with bad credit than an unsecured credit card with decent terms. Each is different and comes with its own minimum and maximum credit limits, typically requiring a minimum opening deposit between a few hundred and a few thousand dollars. (This figure depends on the card’s maximum limit and how big of a deposit you’re willing or able to part with). Secured cards are offered by nearly all major issuing banks and some smaller ones. If you know already what bank or other lender you’re interested in using, secured cards are most easily pursued through the issuer’s website. We recommend comparing at least several different options online and checking out other trusted resources for recommendations or general advice, such as our guide to the best secured credit cards. How To Get an Unsecured Credit Card with Bad CreditIn general, unsecured credit cards are harder to see approval for without good credit, but that’s where the cards specifically for subprime borrowers come in. Aside from credit cards that rely on a cosigner, the process for obtaining this type of unsecured credit card is similar to that of your average card, though applicants will have fewer options overall. If approved, the cardholder can then enjoy a relatively normal credit card product, so long as they are willing to put up with the drawbacks and risks that these cards tend to carry, such as high APRs. Again, the best place to start for most applicants is online, including the materials provided on the bank or other issuer’s website. We recommend checking out our current guides to the best cards for rebuilding credit and the best second chance cards with no security deposit. Credit Cards After BankruptcyStarting over financially after bankruptcy can be tricky. You can’t apply for a card until your bankruptcy is discharged. But once this has happened, your best bet is to apply for a card as soon as the bankruptcy process is completed so you can start rebuilding your credit right away. There are steps you can take to rebuild your credit after bankruptcy, but depending on what type of bankruptcy you filed for, the bankruptcy will remain on your credit report for seven to 10 years. Still, a bankruptcy doesn’t completely eliminate all credit card prospects. There are a small handful of credit cards you can get even with a bankruptcy on your credit report, including options that don’t require a credit check. Make sure to read the terms and conditions of any card you’re interested in to see if your financial circumstances match the card’s requirements and restrictions. These cards typically have extremely strict terms. How To Get Approved for Credit Cards with Bad CreditThere’s no guaranteed method of receiving approval for a credit card, especially with bad credit. You can improve your odds of success by knowing where you stand and by only applying for a card that’s both practical and attainable for your specific financial circumstances—even if it means waiting longer to get a credit card. Put some thought into deciding whether or not your situation lends itself to either a secured or an unsecured credit card and make sure to read the fine print of any plan you wish to apply for. Finally, don’t be tempted to embellish or falsify any of the information you submit through an application, as it’s not worth the potential consequences. How To Prequalify for Credit Cards with Bad CreditIf an issuer offers prequalification for one or more of its credit cards, it’ll typically show it on its website. To see if you prequalify, you’ll be asked to enter a few details about yourself. You’ll usually need to provide your name, address and the last four digits of your Social Security number so the issuer can run what’s known as a soft check of your credit. This type of credit check, unlike a hard pull of your credit, won’t have any impact on your score. Running a soft check doesn’t mean you’re officially starting the application process either, but it does allow an issuer to get an idea of what among its offerings you may or may not qualify for. Overall, there’s no downside to having an issuer prequalify your application. In fact, you may end up finding out you have a shot at a card you didn’t think your current credit score merited. Prequalifying is not a guarantee of approval. An important note: be sure you have complete trust in any website or service asking for sensitive information for prequalification (or to determine any other kind of eligibility). Be wary of initiating this process through links provided by online or email advertisements and through unsolicited phone calls, as the entity on the other end may not actually represent who they claim to. You can always decline, note information and follow up yourself through the credit card issuer’s official channels. Claims that “this is your only opportunity” to act on an offer should raise red flags. How To Use a Credit Card to Build CreditBuilding better credit is synonymous with improving your credit score. There’s no silver bullet, but there are concrete actions you can take to get on the right track. For starters, do your very best to pay your bills on time—your payment history makes up 35% of your credit score. If you simply find it challenging to remember due dates, you can use autopay to eliminate the risk of missed bills. Building credit also relies on keeping your credit utilization ratio to less than a third of your total credit limit. This measurement compares your credit card balances—what you spend—to the maximum amounts your credit limits allow. Lenders can use this ratio to gauge risk—as an indicator for how well a borrower manages finances. A ratio of less than 30% is generally considered good but below 10% is even better. Applying for too many new lines of credit can also hurt your credit score, so managing this effectively is important to building credit. A hard credit check can drop your score by one to five points and, if approved, lower your average account age, which also can drop your credit score. If possible, try to avoid applying for too many lines of credit when working on improving your score. Bottom LineGetting a credit card when you have bad credit is possible and can be a good stepping stone towards building better credit. Not all credit cards for those without great credit are great credit credit cards. Choosing the right card will depend on a combination of your personal financial history and your financial goals. Watch out for high fees, interest charges and unreasonably low credit limits that’ll keep your credit utilization high and your credit low. Frequently Asked QuestionsWhat is the easiest credit card to get with bad credit?The easiest card for a “subprime borrower” will be either a secured credit card or an unsecured card marketed to those with bad credit. If you have the money on hand for a secured card’s deposit collateral, this will likely be the easiest, safest-for-your-credit and most straightforward option. There’s a relatively low bar for approval with secured cards and the collateral mitigates risk for the issuer, meaning you can even find secured cards with rewards. If coming up with the money upfront is unachievable, reconsider getting a card if at all possible, an unsecured card designed for subprime lenders will be the most accessible option. How can I get an American Express card with bad credit?Though Amex’s products do not appear to be marketed toward those with poorer credit and the company is known for its high-end, luxury cards with plentiful benefits, there are other ways to gain access to Amex cards despite poorer credit. Among these alternative routes are becoming an authorized user on a trusted family member or friend’s account or applying with a cosigner. You could also consider one of American Express’ debit products such as BlueBird or Serve. Where can I get a credit card with bad credit?Many banks and other card issuers offer secured credit card options. It’s recommended to search for and compare cards using information from these companies’ official websites rather than via unsolicited offers or advertisements. Cards marketed towards subprime borrowers may be comparatively harder to find, but with some help from your dear friends at Forbes Advisor, the process can be painless. Representatives from credit card issuers may be able to provide information about product offerings through a phone call, but are often limited in their ability to “recommend” any particular product for one credit situation or another. How can I get a high limit credit card with bad credit?You may be able to find a secured credit card with a higher-than-average maximum deposit amount, but this will still be capped at the value of the collateral deposit, so it’s unlikely you’ll find one with a limit beyond a few thousand dollars. Unsecured cards geared toward subprime borrowers typically set credit limits low, as the issuer is looking to reduce risk by whatever means possible beyond collateral. Can you do a balance transfer with bad credit?If you have subprime credit, it can be challenging to qualify for a card with a 0% APR balance transfer offer or a lower interest rate than your current card. Typically, these types of cards are available to those with good or better credit. Balance transfers from another bank are a way for credit card issuers to take on new customers, but first the lender will evaluate the perceived level of risk in extending credit. If your credit score deems you too risky to an issuer, your balance transfer won’t be approved. If you’re looking for help taming a high-interest credit card balance and your credit doesn’t qualify you to transfer your balance to another card, consider a personal loan, which may have more favorable rates. You can also speak to a credit counselor who might be able to help you work through your options for improving credit and paying down your debt. What should I look for in a credit card for bad credit?If you have bad credit, getting a credit card can be an opportunity to improve your credit profile. One characteristic you’ll want in your credit card is that the issuer reports on-time payment behavior to the major credit bureaus—Equifax, Experian and TransUnion—and ideally all three of them. If possible, you’ll also want to avoid cards with high annual fees and other charges like account opening fees. Finally, it can be a benefit to choose a card that will allow you to “graduate” to an unsecured card after several months of good payment behavior so you won’t have to open another account once your credit has improved. Other Credit Cards To Be ConsideredInformation provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results. Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
Chauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tractor, but has learned that opportunity is where he finds it and discomfort is more interesting than complacency.
Robin Saks Frankel is a credit cards and personal finance writer for Forbes Advisor. Previously, she covered credit cards and related content at other national web publications including NerdWallet, Bankrate and HerMoney. She's been featured as a personal finance expert in outlets including CNBC, Business Insider, CBS Marketplace, and has appeared on or contributed to Fox News, CBS Radio, ABC Radio, NPR, International Business Times and NBC, ABC and CBS TV affiliates nationwide. Follow her on Twitter at @robinsaks.
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