What to look for in a card when your credit score is below 620
A card designed for low credit scores will have a higher interest rate and lower credit limit than cards for people with excellent credit. That is the trade-off: the card issuer takes on more risk, so you pay more. What matters is finding one that reports to all three credit bureaus—Equifax, Experian, and TransUnion—because that's how you rebuild your score.
The best cards in this category charge a reasonable annual fee (under $100), do not require a security deposit, and offer a path to a regular card after you demonstrate responsible use. Some issuers will lower your rate or waive the fee after 6 to 12 months of on-time payments. Read the terms carefully: a card that charges $95 a year plus 28% APR is not the same as one charging $0 annually at 24% APR, even though both serve the same purpose.
Avoid cards that charge process fees, processing fees, or monthly maintenance fees beyond the annual fee. These eat into your credit limit and make it harder to build credit without spending money just to hold the card.
Key Takeaways
- Cards for low credit scores report to all three bureaus, which is how your score improves over time.
- Annual fees typically range from $0 to $99, and some issuers waive or reduce the fee after six months of on-time payments.
- Interest rates on these cards are usually between 18% and 36% APR, depending on the issuer and your specific credit profile.
- You do not need a security deposit for most low-credit cards, though secured cards are an alternative if you want to put down cash upfront.
Unsecured cards versus secured cards
An unsecured card is a regular credit card that does not require you to deposit money. You get a credit limit based on the issuer's assessment of your risk, and you pay interest on what you borrow. Most cards marketed to people with low credit scores are unsecured. The issuer is betting that you will make payments; if you do not, they absorb the loss.
A secured card requires you to deposit cash into a savings account held by the bank. That deposit becomes your credit limit. If you deposit $500, you get a $500 limit. You still pay interest on purchases, and you still make monthly payments. The difference is that the bank's risk is lower because they hold your money. Secured cards often have lower annual fees and sometimes lower interest rates, but they tie up your cash. After 12 to 24 months of on-time payments, most issuers convert the card to unsecured and return your deposit.
Choose unsecured if you do not have cash to set aside. Choose secured if you have $300 to $2,500 available and want the fastest path to rebuilding credit—secured cards often approve people with scores below 550, while unsecured cards typically require a score of 550 or higher.
How annual fees and interest rates compare
| Card Type | Typical Annual Fee | Typical APR Range | Requires Deposit |
|---|---|---|---|
| Unsecured low-credit card | $0–$99 | 18%–36% | No |
| Secured card | $0–$49 | 18%–27% | Yes ($300–$2,500) |
| Store card (low credit) | $0 | 24%–29% | No |
The annual fee is a fixed cost you pay once per year, whether you use the card or not. The APR is the interest rate you pay only on balances you carry month to month. If you pay your full balance each month, the APR does not matter—you pay no interest. If you carry a balance, the APR matters a lot.
A card with a $99 annual fee and 20% APR is cheaper than a $0 annual fee card at 29% APR if you plan to carry a balance. But if you pay in full each month, the $0 annual fee card is better. Know your own habits before you choose.
What happens after you open the account
After approval, you will receive the card in the mail within 5 to 10 business days. You must set up it before you can use it—most issuers let you set up online or by phone. Some cards require you to make a small purchase within 30 days to confirm the account is active.
Your first statement arrives 30 to 45 days after your first purchase. The statement shows your balance, minimum payment due, and the due date. Pay at least the minimum by the due date every month. Paying the full balance is better because it avoids interest, but even paying the minimum on time helps your credit score.
After 6 to 12 months of on-time payments, contact the issuer and ask about a credit limit increase or a conversion to a regular card with a lower rate. Many issuers do this automatically, but some require you to ask. Each time your limit increases or your rate drops, your credit score gets a small boost because your credit utilization (the percentage of your limit you are using) improves.
Common mistakes to avoid
Do not max out the card. Using more than 30% of your credit limit hurts your score, even if you pay on time. If your limit is $500, try to keep your balance under $150. This is one of the fastest ways to improve your score without waiting for time to pass.
Do not miss a payment. A single late payment stays on your credit report for seven years and can drop your score by 100 points or more. Set up automatic payments for at least the minimum if you struggle to remember due dates. Missing a payment is far more damaging than carrying a small balance.
Do not close the card after your score improves. Closing an account lowers your average account age and reduces your total available credit, both of which hurt your score. Keep the card open and use it occasionally, even after you move to a better card.
Do not explore for multiple cards at once. Each process triggers a hard inquiry, which lowers your score slightly. Space applications out by at least three months. One card is enough to rebuild credit; adding more cards too quickly looks risky to lenders.
Store cards and other alternatives
Store credit cards—issued by retailers like Target, Walmart, or Best Buy—often have lower approval thresholds than bank cards and may accept scores below 600. They charge no annual fee and report to the credit bureaus. The downside is that they usually have higher interest rates (24% to 29%) and smaller credit limits ($300 to $1,000). Use them only if you cannot get approved for a bank card, or if you shop at that store regularly and can pay the balance in full each month.
Credit builder loans are another option. You borrow a small amount (usually $300 to $1,000) and make monthly payments into a savings account. After you finish paying, you get the money. The lender reports your payments to the credit bureaus, building your score without the risk of debt. Credit builder loans work well if you want to avoid credit cards entirely, but they take 12 to 24 months and do not give you access to credit during that time.
Becoming an authorized user on someone else's card is faster but riskier. If the primary cardholder misses a payment, it damages your score too. Only do this if you trust the person completely and they have a strong payment history.
How to read the terms before you open an account
Before you accept any card offer, read the Schumer Box—the table of fees and rates that every issuer must display. Look for the APR range (it will say something like "18% to 36% based on creditworthiness"), the annual fee, and any other fees like late payment fees or balance transfer fees. If the terms do not match what the marketing materials promised, do not open the account.
Check whether the card reports to all three bureaus. The issuer's website or the terms document will say "reports to Equifax, Experian, and TransUnion" or list only one or two. If it reports to only one bureau, your score will improve more slowly. If it reports to all three, your score will improve faster.
Look for a grace period—the number of days between your statement date and your payment due date. A longer grace period (usually 21 to 25 days) gives you more time to pay without interest. Most cards offer this, but some do not.
Frequently Asked Questions
Will opening a low-credit card hurt my score?
Yes, but only temporarily. The hard inquiry and new account will lower your score by 5 to 10 points for a few months. After that, on-time payments will raise your score faster than the initial dip lowered it. Over 6 to 12 months, most people see a net improvement of 50 to 100 points.
What credit score do I need to get approved?
Unsecured cards for low credit typically require a score of 550 to 650. Secured cards often approve scores below 550. If you are below 550 and cannot get approved for an unsecured card, a secured card or credit builder loan is your fastest option.
Can I use the card right away or do I have to wait?
You can use the card as soon as it arrives and you set up it. Some issuers require a small purchase within 30 days to confirm the account is active. Check your welcome materials for any set up requirements.
How long does it take to rebuild my credit with one of these cards?
Most people see a 50 to 100 point improvement within 6 to 12 months if they make all payments on time and keep their balance below 30% of the limit. Larger improvements take longer and depend on what else is on your credit report.
What if I get denied?
If you are denied for an unsecured card, explore for a secured card instead. If you are denied for both, a credit builder loan or becoming an authorized user are your next options. Do not explore for multiple cards in quick succession—space applications at least three months apart.