Cards that review applications from people with poor credit history
If your credit score is below 580, most standard credit cards will decline your process. But several card issuers specifically review applications from people with lower scores, and some approve without requiring a deposit. The cards that do this tend to charge higher interest rates and annual fees, but they report to the three major credit bureaus — meaning on-time payments build your score over time.
The main issuers who review bad-credit applications are Discover, Capital One, Chime, and LendingClub. Each has different approval odds, fee structures, and credit-building features. Your choice depends on whether you can afford an annual fee, how much credit limit you need, and whether you want a secured card (backed by a cash deposit) or an unsecured one.
Key Takeaways
- Discover and Capital One offer unsecured cards for bad credit without requiring a deposit, though interest rates run 24% to 36% APR.
- Secured cards from Capital One and Discover require a cash deposit ($200 to $2,500) that acts as collateral, and typically have lower approval odds than unsecured options.
- Annual fees range from $0 to $99 depending on the card, and some cards waive the fee in the first year or if you meet spending thresholds.
- All major bad-credit cards report payment history to Equifax, Experian, and TransUnion, so consistent on-time payments will raise your score over 6 to 12 months.
- Your approval odds improve if you have a checking account with the issuer, a co-signer, or proof of recent income.
Unsecured cards that do not require a deposit
Discover it Secured and the Discover it Student Cash Back both review applications from people with scores below 580. Discover it Secured has no annual fee and offers 1% cash back on all purchases. The card requires a $200 minimum deposit, which becomes your credit limit. After seven months of on-time payments, Discover reviews your account to convert it to an unsecured card and return your deposit.
Capital One Platinum is unsecured and has no annual fee, making it one of the easiest bad-credit cards to obtain. It reports to all three bureaus and typically offers a credit limit between $300 and $500 at approval. The APR is usually 26.99%, and there is no cash back or rewards. Capital One also offers the Capital One Quicksilver Secured, which requires a deposit but includes 1.5% cash back on all purchases.
Chime Credit Builder Visa is issued through Chime's banking platform and requires a Chime checking account. It has no annual fee and no interest rate because you load money onto the card before spending it — it functions like a prepaid card. Chime reports to all three bureaus, so it builds credit history without the risk of debt.
Secured cards backed by a cash deposit
A secured card requires you to deposit cash with the issuer, and that deposit becomes your credit limit. You then use the card like any other credit card, making monthly payments. After 6 to 18 months of on-time payments, the issuer converts the account to unsecured and returns your deposit. Secured cards typically have higher approval odds than unsecured cards for people with bad credit.
Capital One Secured Mastercard requires a deposit between $200 and $2,500 and charges a $39 annual fee. The APR is 26.99%. After six months of on-time payments, you may be considered for conversion to an unsecured card. Discover it Secured works the same way but has no annual fee, making it the lower-cost secured option.
The main trade-off with secured cards is that your deposit is locked up for months or years. If you need that cash, an unsecured card like Capital One Platinum is a better choice, even though approval odds are slightly lower. If you have $200 to $500 you can afford to tie up, a secured card typically converts faster and builds credit more reliably.
Annual fees and interest rates compared
| Card | Annual Fee | APR | Deposit Required | Cash Back |
|---|---|---|---|---|
| Capital One Platinum | $0 | 26.99% | No | None |
| Discover it Secured | $0 | 24.99% | $200–$2,500 | 1% all purchases |
| Capital One Secured Mastercard | $39 | 26.99% | $200–$2,500 | None |
| Chime Credit Builder Visa | $0 | N/A (prepaid) | No | None |
| LendingClub Credit Builder | $0 | N/A (prepaid) | No | None |
Interest rates on bad-credit cards range from 24.99% to 36% APR. The lowest rates go to people with scores above 650, so if your score is below 600, expect to land near the higher end. Annual fees vary from $0 to $99, and some issuers waive the first-year fee or reduce it if you meet spending targets.
Prepaid cards like Chime and LendingClub have no interest rate because you load money first and then spend it. They carry no risk of debt but also no opportunity to build credit through revolving credit use — they report to bureaus as prepaid accounts, which has a smaller impact on your score than a traditional credit card.
How to improve your odds of approval
Bad-credit card issuers review more than just your credit score. Having a checking account with the same bank increases approval odds significantly. If you bank with Capital One, Discover, or Chime, mention that in your process. Issuers also look at your current income, employment status, and whether you have recent late payments or collections accounts.
A co-signer with good credit can improve your odds on some cards, though most bad-credit cards do not offer co-signer options. Capital One Platinum and Discover it Secured do not require a co-signer, but having one may help during the review process if you can provide their information. Recent income documentation — a recent pay stub or tax return — also strengthens your process.
If you are denied, ask the issuer which factors led to the decision. Common reasons include recent bankruptcy, active collections accounts, or too many recent hard inquiries. Waiting 6 to 12 months after a negative event improves your odds. In the meantime, a secured card or prepaid card will still report to bureaus and begin rebuilding your score.
Building credit while using a bad-credit card
The goal of a bad-credit card is to demonstrate that you can borrow responsibly. On-time payments matter most — a single late payment can set back months of progress. Set up automatic payments for at least the minimum due, or set a phone reminder a few days before the due date. Paying the full balance each month avoids interest charges and builds credit faster than carrying a balance.
Keep your credit utilization low. If your card has a $300 limit, try to use no more than $30 to $90 per month. High utilization signals financial stress to credit bureaus, even if you pay on time. After 6 to 12 months of on-time payments and low utilization, your score should rise enough to may have access to for a standard card with better terms.
Do not close the card once you upgrade to a better one. Closing an account lowers your average account age and reduces your total available credit, both of which hurt your score. Keep the old card open with occasional small purchases to maintain activity and show a long credit history.
Alternatives if you cannot get approved
If you are denied by all major issuers, a prepaid card or secured card through a credit union may be your next option. Credit unions often have more flexible approval standards than national banks and may offer secured cards with lower deposits. You can find a credit union near you through CO-OP, a network of 30,000 ATMs and branches nationwide.
A credit-builder loan is another path. You borrow a small amount ($300 to $1,000) from a credit union or online lender, and the lender holds the money in a savings account while you make monthly payments. Once you finish paying, you get the money back. This builds credit history without the risk of revolving debt and typically costs less than a bad-credit credit card.
Becoming an authorized user on someone else's credit card can also help. If a family member or friend with good credit adds you to their account, their payment history may appear on your credit report. This works only if the primary cardholder has a strong history and low utilization — if they miss payments or carry high balances, it will hurt your score instead.
Frequently Asked Questions
Will explore for a bad-credit card hurt my score?
Yes, each process triggers a hard inquiry, which lowers your score by a few points. Multiple applications in a short time have a larger impact. Space applications out by at least two weeks, and limit yourself to two or three cards. The score recovery from a hard inquiry typically takes three to six months.
Can I get a bad-credit card with no annual fee?
Yes. Capital One Platinum, Discover it Secured, Chime Credit Builder, and LendingClub all have $0 annual fees. Capital One Secured Mastercard charges $39 per year. If you want to avoid fees entirely, Capital One Platinum or Discover it Secured are your best options.
How long does it take to convert a secured card to unsecured?
Most issuers review your account after six months of on-time payments. Conversion typically happens between six and 18 months. Discover it Secured converts faster than Capital One Secured Mastercard on average, though timing depends on your individual payment history and credit score improvement.
What is the difference between a secured card and a prepaid card?
A secured card is a credit card backed by a deposit — you borrow money and make payments, building credit through revolving credit use. A prepaid card is not a credit card; you load money first and then spend it. Secured cards have a bigger impact on your credit score because they show you can manage borrowed money responsibly.
Do I need to carry a balance to build credit?
No. Paying your full balance each month builds credit just as effectively as carrying a balance, and it saves you interest charges. Credit bureaus care about on-time payments and low utilization, not whether you carry a balance. Paying in full is always the better choice.