What credit card options exist for people with low credit scores
If your credit score is below 620, most standard credit cards will reject your application. But you have real options: secured credit cards, credit-builder cards, and cards designed for fair credit (typically scores between 580 and 669). Each works differently and costs you different amounts in fees and interest.
A secured card requires you to put down a cash deposit, usually $200 to $2,500, which becomes your credit limit. You use it like a normal card, pay the bill each month, and the bank reports your payment history to the three credit bureaus. After 6 to 18 months of on-time payments, many issuers convert you to an unsecured card and return your deposit.
A credit-builder card is designed to help you rebuild. It often comes with a higher annual fee (sometimes $25 to $99) and a lower credit limit, but you do not need a deposit. A fair-credit card sits between the two: it may have an annual fee and require a deposit, or just one of those two.
Key Takeaways
- Secured cards require a cash deposit equal to your credit limit, but they report to all three credit bureaus and often convert to unsecured cards after consistent on-time payments.
- Credit-builder cards charge an annual fee instead of requiring a deposit, making them useful if you do not have several hundred dollars to set aside.
- Fair-credit cards fall between secured and standard cards in terms of fees, deposits, and credit limits, and are available from issuers like Capital One and Discover.
- Annual percentage rate (APR) on low-credit cards ranges from 18% to 36%, so carrying a balance costs significantly more than it would on a standard card.
- Checking your own credit report before you apply helps you understand why your score is low and spot errors that may be dragging it down.
Secured cards: how the deposit works and when to use one
When you open a secured card, you deposit money into a savings account held by the bank. That deposit amount becomes your credit limit. If you deposit $500, you get a $500 limit. You then use the card to make purchases, receive a monthly bill, and pay it like any other card. The bank does not touch your deposit unless you stop paying your bill.
The deposit stays frozen for as long as you hold the card. You cannot withdraw it or use it to pay your bill. This protects the bank if you default, but it also means you need cash you can afford to lock away. After 6 to 18 months of on-time payments, the issuer reviews your account. If your payment history is clean, they convert the card to unsecured, return your deposit, and often raise your credit limit.
Secured cards usually charge an annual fee ($0 to $95, depending on the issuer) and carry an APR between 18% and 24%. Examples include the Capital One Secured Mastercard, the Discover it Secured Credit Card, and the U.S. Bank Altitude Go Visa Secured Card. Each has different fee structures and conversion timelines, so compare before you apply.
Credit-builder cards and fair-credit cards: fees instead of deposits
A credit-builder card does not require a deposit. Instead, you pay an annual fee upfront—typically $25 to $99—and the issuer gives you a credit limit, usually $300 to $750. You use it normally, pay your bill each month, and the issuer reports to the credit bureaus. After a year of on-time payments, many credit-builder cards waive the annual fee or lower it.
Fair-credit cards are marketed to people with credit scores in the 580–669 range. They may charge an annual fee, a deposit, or both. Capital One Quicksilver Secured Cash Rewards and the Discover it Secured Credit Card are examples that straddle both categories. The trade-off is that you avoid locking up a large deposit, but you pay the fee whether you use the card or not.
Both types report to all three bureaus and help you build history. The choice between them depends on whether you have cash to deposit. If you do, a secured card often has lower ongoing costs. If you do not, a credit-builder card is the faster path to approval.
APR, fees, and what these cards actually cost you
Low-credit cards are expensive. An APR of 20% to 36% is standard. If you carry a $500 balance for a year, you will pay $100 to $180 in interest alone. Add an annual fee of $50, and your true cost is $150 to $230 for that year of borrowing.
The real value of these cards is not in borrowing—it is in building credit history. If you use the card for small purchases and pay the full balance each month, you avoid interest entirely and pay only the annual fee (if there is one). Over 12 to 18 months, you report on-time payments to the bureaus, your score rises, and you become may be able to access for standard cards with lower APRs and no annual fees.
Before you apply, calculate the total cost: annual fee plus the APR on any balance you expect to carry. If you plan to pay in full each month, the annual fee is your only cost. If you expect to carry a balance, the APR matters far more than the credit limit.
How to check your credit report before you apply
Your credit score is built from information in your credit report, held by Equifax, Experian, and TransUnion. You can view your report for free once per year at AnnualCreditReport.com, the official site run by the three bureaus. Do this before you apply for a card.
Look for errors: accounts you did not open, late payments you made on time, or balances that are wrong. If you find an error, dispute it directly with the bureau that reported it. Errors can drag your score down by 50 to 100 points, so fixing them before you apply increases your chances of approval and may lower your APR.
You will also see your payment history, current balances, and the age of your oldest account. If you have no credit history at all (no prior cards, loans, or bills in your name), a secured card or credit-builder card is your only realistic option. If you have history but a low score, the report will show you why—missed payments, high balances, or collections accounts—so you know what to focus on rebuilding.
What happens after approval: using the card to raise your score
Once you have the card, your goal is simple: use it for small purchases and pay the full balance by the due date, every month. This shows lenders you can manage credit responsibly. Payment history accounts for 35% of your credit score, so 12 months of on-time payments will raise your score noticeably.
Keep your balance low relative to your credit limit. If your limit is $500, try to keep your balance below $150 (30% of the limit). This ratio, called utilization, accounts for 30% of your score. High utilization signals financial stress, even if you pay on time.
Do not close the card once it converts to unsecured or once you move to a better card. Closing it removes a line of credit from your history and can lower your score. Instead, keep it open and use it occasionally. After 18 to 24 months of consistent on-time payments, your score should rise enough to may have access to for a standard card with no annual fee and a lower APR.
Comparing secured, credit-builder, and fair-credit cards side by side
| Card Type | Deposit Required | Annual Fee | Typical APR | Credit Limit | Conversion Timeline |
|---|---|---|---|---|---|
| Secured | $200–$2,500 | $0–$95 | 18%–24% | Equals deposit | 6–18 months |
| Credit-Builder | None | $25–$99 | 20%–36% | $300–$750 | 12–24 months |
| Fair-Credit | $0–$500 (varies) | $0–$99 (varies) | 18%–29% | $300–$1,000 | 12–18 months |
Frequently Asked Questions
Will applying for a low-credit card hurt my score?
Yes, but only slightly and temporarily. Each application triggers a hard inquiry, which lowers your score by a few points for about three months. Multiple applications in a short time have a larger impact. Apply to one or two cards you are genuinely interested in, not five at once.
Can I get a credit card with no credit history at all?
Secured cards and credit-builder cards are your best options if you have never had credit. Standard cards require some credit history. A secured card is often easier to get approved for because your deposit protects the bank.
What if I cannot afford a deposit for a secured card?
A credit-builder card is the right choice. You pay an annual fee instead of locking up cash. The fee is usually $25 to $99, which is less than a deposit and does not tie up money you might need.
How long does it take to rebuild my credit with one of these cards?
Most people see a 50 to 100 point increase within 6 to 12 months of on-time payments. Larger increases take 18 to 24 months. The speed depends on what caused your low score—recent missed payments take longer to recover from than older ones.
Can I use a low-credit card to pay off existing debt?
You can, but it is usually not the best strategy. Low-credit cards have high APRs, so transferring a balance to one costs more in interest than paying it down with your current card. Use the low-credit card for new small purchases while you pay down existing debt separately.