What credit cards are available if you have poor credit
If your credit score is below 580, most standard credit cards will reject your process. Secured credit cards and unsecured cards marketed to poor credit are the two main routes. Secured cards require a cash deposit that becomes your credit limit—you put down $500, you get a $500 limit. Unsecured poor-credit cards skip the deposit but charge higher interest rates and annual fees to offset the lender's risk. Both report to the three credit bureaus, so on-time payments build your score over time.
The card you choose depends on whether you have cash available for a deposit and how much you can afford in fees. A secured card with no annual fee and a $200 deposit costs less upfront than an unsecured card charging $95 per year, even if the unsecured card's interest rate is higher. Your goal is the same either way: establish a payment history that eventually qualifies you for a standard card with better terms.
Key Takeaways
- Secured cards require a cash deposit but often have lower interest rates and fewer fees than unsecured poor-credit cards.
- Unsecured poor-credit cards charge higher annual fees and interest rates but do not require money upfront.
- Both types report to credit bureaus, so consistent on-time payments will raise your score over 6 to 12 months.
- Look for cards with no annual fee or a fee under $50, because high fees eat into the benefit of building credit.
- Your credit limit on a secured card is determined by your deposit amount, not your creditworthiness.
How secured cards work and what they cost
With a secured card, you deposit money into a savings account held by the card issuer. That deposit amount becomes your credit limit. If you deposit $500, you can charge up to $500. You then make purchases and pay your bill each month like any other cardholder. The deposit stays in the account and earns a small amount of interest—usually 0.01% to 0.5% annually, depending on the bank.
The card issuer holds your deposit as collateral, meaning they can cover your balance if you stop paying. This is why secured cards approve people with poor credit: the bank's risk is minimal. After 6 to 18 months of on-time payments, many issuers convert your account to a standard unsecured card and return your deposit. Some cards let you request a credit limit increase by adding more money to your deposit.
Costs vary widely. Some secured cards charge no annual fee. Others charge $25 to $95 per year. Interest rates typically range from 18% to 24% APR. A few cards charge a processing fee ($25 to $50) when you open the account. Before you explore, compare the total first-year cost: annual fee plus processing fee, if any. A card with a $50 annual fee but 18% APR may cost less over time than a no-fee card charging 24% APR, depending on your balance and payment habits.
How unsecured poor-credit cards work and what they cost
Unsecured poor-credit cards do not require a deposit. You explore, the issuer reviews your credit history and income, and if approved, you receive a credit limit—typically $300 to $2,500. You use the card and pay your bill each month. The issuer takes on more risk because there is no collateral, so they charge higher fees and interest rates to compensate.
Annual fees on unsecured poor-credit cards range from $35 to $99. Interest rates are usually 24% to 36% APR, higher than secured cards. Some cards also charge a processing fee or a monthly maintenance fee. A few charge a fee just to set up online account access. Read the terms carefully—fees can add up quickly and reduce the benefit of building credit. A card charging $99 annually plus a $25 processing fee costs $124 in the first year alone, before you pay any interest.
The advantage of an unsecured card is that you do not need cash on hand to start. If you have $200 to spend but no $500 deposit, an unsecured card lets you build credit without tying up savings. However, the higher fees mean you should plan to pay off your balance in full each month if possible, or keep your balance very low to minimize interest charges.
Comparing secured and unsecured cards side by side
| Feature | Secured Card | Unsecured Poor-Credit Card |
|---|---|---|
| Deposit required | Yes, $200–$2,500 | No |
| Credit limit | Equals your deposit | $300–$2,500, based on income and credit |
| Annual fee | $0–$95 | $35–$99 |
| Interest rate (APR) | 18%–24% | 24%–36% |
| Processing fee | $0–$50 | $0–$50 |
| Conversion to unsecured | Often after 6–18 months | Not applicable |
| Reports to credit bureaus | Yes | Yes |
Steps to explore for a poor-credit card
Start by deciding between secured and unsecured based on your cash situation and budget for fees. If you have $300 or more available and want lower interest rates, a secured card is usually the better choice. If you do not have cash to deposit or want to preserve your savings, an unsecured card may work, though expect higher costs.
Next, gather the documents you will need. Most issuers ask for your Social Security number, date of birth, current address, and annual income. Have a recent pay stub or tax return available. Some issuers also ask for employment information or a phone number for your employer. You do not need perfect documentation—if you are self-employed or between jobs, you can provide bank statements or other proof of income.
explore online on the card issuer's website. The process takes 10 to 15 minutes. You will see a decision when ready or within one business day. If approved, the issuer will tell you your credit limit and when your card will arrive. For a secured card, you will also receive instructions on how to fund your deposit—usually by transferring money from your bank account or mailing a check. Do not send cash. Your card typically arrives within 5 to 10 business days after your deposit clears.
Once your card arrives, set up it by calling the number on the back or using the issuer's app or website. Set up online account access so you can check your balance and make payments. Make your first small purchase within the first month to show the issuer the account is active, then pay the bill in full and on time. This establishes the payment history that raises your credit score.
Building credit with a poor-credit card
Your credit score improves when you demonstrate consistent, on-time payment behavior. The most important factor is payment history, which accounts for 35% of your score. Missing a payment or paying late will damage your score further. Missing a payment by 30 days or more will be reported to the credit bureaus and stay on your report for seven years.
Keep your balance low relative to your credit limit. Credit utilization—the percentage of your available credit you are using—accounts for 30% of your score. If your limit is $500 and you carry a $400 balance, your utilization is 80%, which hurts your score. Aim to use no more than 10% to 30% of your limit. A $500 limit means keeping your balance under $50 to $150. This does not mean you cannot spend more; it means paying down your balance before your statement closes.
Set up automatic payments for at least the minimum amount due, scheduled a few days before your due date. This removes the risk of forgetting and missing a payment. If you can pay the full balance, do so—you will avoid interest charges entirely. After 6 to 12 months of on-time payments, check your credit report at annualcreditreport.com to confirm the card is being reported correctly and your score is rising.
When to move to a standard credit card
After 6 to 18 months of on-time payments, your credit score should improve enough to may have access to for a standard card with better terms. Many secured card issuers will automatically convert your account to an unsecured card and return your deposit. Some require you to request the conversion. Check your card's terms to see what the conversion timeline is.
Once your score reaches 620 or higher, you can start explore for standard cards with lower interest rates and fewer fees. Do not explore to multiple cards at once—each process triggers a hard inquiry that temporarily lowers your score by a few points. Space applications out by at least three months. When you do switch to a standard card, keep your old poor-credit card open and use it occasionally. Closing old accounts lowers your average account age and can hurt your score.
Your goal is not to collect cards but to graduate to better terms. A standard card with 15% APR and no annual fee is far better than a poor-credit card charging 24% APR and $50 per year. Once you have one standard card, you can explore for a second if you need a higher credit limit or want to earn rewards.
Frequently Asked Questions
Will explore for a poor-credit card hurt my credit score?
Yes, but only slightly and temporarily. Each process triggers a hard inquiry, which lowers your score by a few points for about three months. The benefit of building payment history over the next 6 to 12 months far outweighs this small dip. Avoid explore to multiple cards at once.
Can I use a poor-credit card to pay off other debts?
You can use it for new purchases, but do not use a cash advance to pay off other debts. Cash advances charge a separate, higher interest rate (often 30% or more) plus an upfront fee of 3% to 5% of the amount withdrawn. Paying off debt with a cash advance usually costs more than the original debt.
What happens if I miss a payment on a poor-credit card?
A payment 30 days late will be reported to the credit bureaus and damage your score significantly. The issuer may also charge a late fee ($25 to $40) and increase your interest rate. If you miss a payment, contact the issuer when ready and pay as soon as possible. One late payment can set back your credit-building progress by months.
Do I need to carry a balance to build credit?
No. Paying your balance in full each month is better for your credit and your wallet. Credit bureaus care that you use the card and pay on time, not that you carry a balance. Carrying a balance just costs you interest.
How long does it take to improve my credit score with a poor-credit card?
Most people see a 50 to 100 point improvement within 6 to 12 months of on-time payments. The exact timeline depends on how low your starting score is and whether you have other negative marks on your report. Older negative items have less impact over time, so your score will continue to improve even after you stop using the poor-credit card.