You can get a credit card with poor credit, but you will pay higher interest rates and may need to put down a cash deposit

A poor credit score does not lock you out of credit cards entirely. Banks and card issuers offer products specifically for people rebuilding credit, though the terms are less favorable than cards for borrowers with strong credit. Most require either a cash deposit (called a secured card) or accept applicants with lower scores but charge higher annual percentage rates (APR). The key is understanding which type fits your situation and what each lender actually requires before you apply.

Your credit score matters, but it is not the only thing lenders look at. They also check your income, employment history, and whether you have any recent late payments or collections accounts. Even with a low score, you may be approved if your recent payment history is clean and your income is stable.

Key Takeaways

  • Secured cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and most convert to unsecured cards after 12 to 24 months of on-time payments.
  • Unsecured cards for poor credit exist but typically charge APRs between 25% and 36%, annual fees of $39 to $99, and offer no rewards.
  • Your credit score alone does not determine approval; lenders also review income, employment, and recent payment history.
  • Applying to multiple cards in a short time period will lower your score further, so research thoroughly before submitting applications.
  • The goal is to use the card responsibly for 12 to 24 months, then move to a better card with lower rates and no annual fee.

Secured credit cards: how they work and what to expect

A secured credit card is the most straightforward path if your credit score is very low (below 580) or you have recent negative marks like late payments or charge-offs. You deposit cash with the card issuer, and that deposit becomes your credit limit. If you deposit $500, your limit is $500. The card issuer holds the deposit in a separate account and earns interest on it, which is why they are willing to take the risk.

The deposit is not a fee — it is your own money sitting in an account. You still make monthly payments on purchases you charge to the card, just like a regular credit card. If you stop paying, the issuer can take the deposit to cover the debt, but the deposit itself is not spent unless you default.

Most secured cards convert to unsecured cards after 12 to 24 months of on-time payments. When that happens, the issuer returns your deposit and you keep the card with a higher credit limit. This is the primary reason to use a secured card: it is a documented path to a better card. Lenders can see that you completed the program successfully, which matters more than your original score.

Secured cards do charge annual fees, typically $25 to $99, and APRs between 18% and 24%. These are higher than standard cards, but lower than unsecured cards for poor credit. Some secured cards offer cash back or other rewards, though most do not.

Unsecured cards for poor credit: higher rates, no deposit required

An unsecured card for poor credit does not require a deposit. Instead, the issuer approves you based on your income and recent payment history, accepting the higher risk by charging a much higher APR. These cards typically charge between 25% and 36% APR, plus annual fees of $39 to $99. Most offer no rewards or cash back.

The trade-off is clear: you avoid putting down cash upfront, but you pay significantly more in interest if you carry a balance. If you plan to pay off your balance in full each month, the high APR matters less. If you carry a balance, the interest charges will accumulate quickly.

Unsecured cards for poor credit are harder to find than they were before 2008. Most major issuers have moved toward secured cards for this market. Capital One, Discover, and a few smaller issuers still offer unsecured options, but you will need to search their websites directly or call to confirm current offerings, as these products change frequently.

What lenders look for beyond your credit score

Your credit score is important, but lenders also examine your income, employment history, and recent payment behavior. If you have been employed for at least two years and have no late payments in the past 12 months, you have a better chance of approval even with a low score.

Recent negative marks hurt more than old ones. A late payment from six months ago will weigh more heavily than one from three years ago. If you have a collection account or charge-off, lenders want to see that you have made payments toward it or settled it since then.

Lenders also check how much debt you already carry relative to your income. If you have high credit card balances or multiple recent hard inquiries (which happen when you apply for credit), approval becomes less likely. This is why applying to many cards in a short period backfires: each application triggers a hard inquiry, which lowers your score and signals to lenders that you are desperate for credit.

Steps to take before you apply

First, get your credit report from all three bureaus (Equifax, Experian, and TransUnion) at annualcreditreport.com, which is the only free source authorized by federal law. Check for errors — incorrect late payments, accounts you did not open, or wrong balances. Dispute any errors directly with the bureau; this can take 30 to 45 days but can raise your score.

Second, check your credit score through your bank, credit card issuer, or a free service like Credit Karma or NerdWallet. These scores are estimates and may differ slightly from the score a lender sees, but they give you a realistic range. If your score is below 580, a secured card is your best option. If it is between 580 and 650, you may be approved for an unsecured card for poor credit, though a secured card is still safer.

Third, research specific cards before applying. Visit the issuer's website directly and look for the APR range, annual fee, and conversion timeline (for secured cards). Read recent reviews on sites like Bankrate or NerdWallet to see what other users experienced. Do not rely on ads or comparison sites that may be outdated.

Fourth, gather your documents. You will need your Social Security number, current income (recent pay stubs or tax returns), and employment information. Some issuers ask for proof of address. Have these ready before you start the application.

What happens after you are approved

Once approved, use the card responsibly. Charge small purchases you would make anyway — groceries, gas, a subscription — and pay the full balance each month. This builds a positive payment history without costing you interest.

Keep your credit utilization low. If your limit is $500, try not to charge more than $150 in any month. High utilization signals financial stress to lenders, even if you pay on time. Lenders look at both your payment history and your utilization ratio when deciding whether to increase your limit or convert your card.

For a secured card, mark your calendar for the conversion review date (usually 12 to 24 months after approval). Contact the issuer a few months before to confirm the timeline and what you need to do. Some issuers convert automatically; others require you to request it. After conversion, your deposit is returned within 5 to 10 business days.

After 12 to 24 months of on-time payments, you will be in a position to apply for better cards with lower rates and no annual fee. This is the end goal: the poor-credit card is a stepping stone, not a permanent solution.

Common mistakes to avoid

Do not apply to multiple cards in a short time period. Each application triggers a hard inquiry, which lowers your score by a few points. Multiple inquiries in 30 days signal desperation and make approval less likely. Space applications out by at least three months.

Do not close the card after it converts or after you move to a better card. Closing accounts lowers your credit score because it reduces your total available credit and shortens your average account age. Keep the old card open with a small balance or a single charge per year to keep it active.

Do not carry a balance on a high-APR card unless absolutely necessary. The interest charges will outpace the benefit of building credit. If you must carry a balance, make it temporary and pay it down as quickly as possible.

Do not miss a payment, even by one day. Late payments are the most damaging thing you can do to your credit score at this stage. Set up automatic payments for at least the minimum due, or set a phone reminder a few days before the due date.

Frequently Asked Questions

Can I get approved for a credit card with a score below 500?

A secured card is your best option below 500. Some issuers will approve unsecured cards for poor credit down to a score of around 550, but secured cards are designed for this range and have clearer approval odds. Your recent payment history and income matter more than the exact score at this level.

How much should I deposit for a secured card?

Deposit the amount you can afford to lock up for 12 to 24 months. Most issuers allow deposits between $200 and $2,500. A $300 to $500 deposit is common for someone rebuilding credit. The deposit becomes your credit limit, so a larger deposit gives you more room to build history, but only if you can afford to lose access to that cash temporarily.

Will applying for a credit card hurt my credit score?

Yes, each application triggers a hard inquiry, which lowers your score by a few points. Multiple inquiries in a short time period have a larger impact. However, the damage is temporary — hard inquiries fall off your report after 12 months and stop affecting your score after two years. One or two applications spaced out over time is manageable.

What if I am denied for a secured card?

Denial is rare for secured cards because your deposit covers the risk. If you are denied, the issuer will send a letter explaining why. Common reasons include a very recent bankruptcy, active fraud alerts, or an issue with your income verification. Wait a few months, resolve any issues, and try again with a different issuer.

Can I use a secured card to build credit if I already have other credit cards?

Yes. A secured card adds to your credit mix (having different types of credit accounts), which helps your score. It also gives you another account with on-time payments, which is the most important factor. If your other cards have high balances, a new secured card with a low balance can actually lower your overall utilization ratio and help your score.