What cards will accept a low credit score
Banks and card issuers do issue credit cards to people with low credit scores, but the cards come with trade-offs: higher interest rates, lower credit limits, and annual fees. The most common options are secured credit cards, which require a cash deposit, and unsecured cards designed for rebuilding credit, which don't require a deposit but charge higher fees.
A low credit score typically means under 580 on the 300–850 FICO scale, though different issuers set their own thresholds. Some cards marketed for "fair credit" (usually 580–669) may also consider you. The key difference between these cards and standard ones is that issuers are taking on more risk, so they protect themselves through higher costs to you.
Getting approved for one of these cards is realistic. The harder part is using it in a way that actually improves your score rather than making it worse. That means understanding what each type of card does and what it costs.
Key Takeaways
- Secured cards require a cash deposit (usually $200–$2,500) that becomes your credit limit, while unsecured rebuilding cards do not require a deposit but charge annual fees of $25–$99.
- Interest rates on both types are typically 18–36% APR, so carrying a balance costs significantly more than on standard cards.
- The goal of either card is to build payment history and lower your credit utilization, both of which improve your score over time.
- After 6–12 months of on-time payments, many issuers will convert a secured card to unsecured or increase your limit without requiring more deposit money.
How secured cards work and what they cost
A secured credit card works like this: you deposit money into a savings account held by the card issuer, and that deposit becomes your credit limit. If you deposit $500, your limit is $500. You then use the card like any other card, and the issuer reports your payments to the three credit bureaus (Equifax, Experian, and TransUnion).
The deposit stays in the account and earns little to no interest. It is not used to pay your bill automatically — you still make monthly payments from your regular bank account. The deposit is there only as collateral, so the issuer knows they can recover their money if you don't pay.
Costs vary by issuer. Annual fees range from $0 to $95. Interest rates typically run 18–36% APR. Some cards charge monthly maintenance fees of $5–$10 on top of the annual fee. Before you open an account, add up the annual fee, any monthly fees, and estimate what interest would cost if you carried a balance for a month. That total is your real cost of entry.
The deposit requirement is both a barrier and a feature. It keeps people with very low scores from being rejected outright, but it also means you need cash on hand. If you don't have $200–$500 to set aside, a secured card isn't an option yet.
Unsecured cards for rebuilding credit and their drawbacks
An unsecured rebuilding card does not require a deposit. You are approved based on your credit history alone, which makes it appealing if you don't have cash to deposit. But the trade-off is that these cards almost always charge annual fees and often charge them upfront.
Annual fees on unsecured rebuilding cards typically range from $25 to $99, and some charge additional fees: monthly maintenance fees ($5–$10), fees for going over your limit, or fees just to set up the account. A card with a $99 annual fee and a $300 credit limit means you're paying one-third of your limit just to have the card for a year.
Interest rates are similarly high, usually 18–36% APR. Because these cards target people rebuilding credit, issuers often start you with a very low credit limit — sometimes $300 or less — which makes it straightforward to accidentally use a high percentage of your limit and hurt your score.
The advantage is that you don't need cash upfront. The disadvantage is that the fees eat into any benefit you get from building credit. If you can save $200–$300 for a secured card deposit, you'll usually come out ahead, because secured cards often have lower annual fees and you get your deposit back later.
How using either card improves your credit score
Both secured and unsecured rebuilding cards improve your score through two mechanisms: payment history and credit utilization.
Payment history is the largest factor in your credit score (about 35% of the FICO score). Every on-time payment you make gets reported to the credit bureaus and shows lenders that you can follow through on a commitment. If you've missed payments in the past, on-time payments now gradually outweigh those missed ones. This takes time — usually 6–12 months of consistent on-time payments before you see a meaningful score bump.
Credit utilization is the second factor (about 30% of your score). It's the percentage of your available credit that you're using. If your limit is $500 and you carry a $250 balance, your utilization is 50%. Scores improve when utilization stays below 30%. So if you have a $500 limit, keeping your balance under $150 helps your score. This is why low limits on rebuilding cards can work against you — it's straightforward to accidentally use 50% or 60% of a $300 limit just by making normal purchases.
The best strategy is to use the card for small, regular purchases (groceries, gas, a coffee) and pay the full balance every month. This shows payment history without interest charges and keeps utilization low. If you can't pay the full balance, pay as much as you can above the minimum — interest charges will otherwise erase the benefit of building credit.
When to move from a rebuilding card to a standard card
After 6–12 months of on-time payments, your credit score will likely improve enough to open a standard card with better terms. Many issuers of secured cards will also convert your account to an unsecured card and return your deposit, which frees up that cash.
Watch for conversion offers from your card issuer — they often come by mail or in your online account. If your issuer doesn't offer conversion, you can request it. Some will convert after 6 months; others wait 12 months or longer. There's no harm in asking.
Once you're approved for a standard card, you don't have to close the rebuilding card when ready. Keeping it open (even unused) helps your score because it preserves your credit history length and keeps your total available credit higher, which lowers your utilization ratio across all cards. Just make sure you're not paying annual fees on cards you're not using.
Comparing secured cards, unsecured rebuilding cards, and alternatives
| Card Type | Deposit Required | Typical Annual Fee | Typical APR | Best For |
|---|---|---|---|---|
| Secured card | $200–$2,500 | $0–$95 | 18–36% | People with cash to deposit and very low scores |
| Unsecured rebuilding card | None | $25–$99 | 18–36% | People without deposit savings but with some credit history |
| Becoming an authorized user | None | None | N/A | People with a family member or friend willing to add them to an existing account |
A third option exists if you have a family member or close friend with good credit: becoming an authorized user on their card. You get a card linked to their account, and their payment history and credit limit get reported on your credit report. You don't need to be approved separately, and there's no cost to you. The risk is that if the primary account holder misses a payment or runs up a high balance, it hurts your score too. This only works if you trust the person completely.
If you don't have cash for a deposit and don't have a trusted person to add you to their account, an unsecured rebuilding card is your entry point, despite the fees. The fees are real costs, but they're temporary — once your score improves, you can move to a card with no annual fee.
What to avoid when using a rebuilding card
The most common mistake is carrying a balance and paying interest. If you use a $500 limit card and carry a $300 balance at 24% APR, you'll pay about $6 per month in interest alone. Over a year, that's $72 in interest on top of your annual fee. You're paying to build credit, which defeats the purpose.
The second mistake is missing a payment. A single missed payment can drop your score 100+ points and will stay on your credit report for seven years. Set up automatic payments for at least the minimum due, even if you can't pay the full balance. Missing a payment is far more damaging than carrying a small balance.
The third mistake is opening multiple cards at once. Each process triggers a hard inquiry, which temporarily lowers your score by a few points. Multiple inquiries in a short time can signal to lenders that you're desperate for credit, which makes approval harder. Space out applications by at least 3–6 months.
Finally, don't close the card once your score improves. Closing it removes available credit from your report and shortens your average account age, both of which lower your score. Keep it open and use it occasionally, or just leave it in a drawer.
Frequently Asked Questions
Will a secured card hurt my credit score when I open it?
Opening any credit card triggers a hard inquiry, which temporarily lowers your score by a few points (usually 5–10 points). This dip is temporary and recovers within a few months. The on-time payments you make after opening the card will more than make up for it, so the net effect is positive over time.
What happens to my deposit if I miss a payment?
The issuer will not automatically take your deposit to cover a missed payment. Instead, they'll report the missed payment to the credit bureaus, which damages your score. However, if your account goes into default (usually after 120–180 days of non-payment), the issuer may use your deposit to cover what you owe. Read your card agreement to see the exact policy.
Can I increase my credit limit on a secured card?
Yes, in two ways. You can deposit more money into the account, which increases your limit by that amount. Or, after 6–12 months of on-time payments, the issuer may increase your limit without requiring additional deposit. Some issuers do this automatically; others require you to request it.
How long does it take to rebuild my credit score with a card?
Most people see a 50–100 point improvement within 6 months of on-time payments, and larger improvements within 12 months. The exact timeline depends on how low your score was to start and what caused the damage. Missed payments and collections take longer to recover from than high balances.
Should I pay off my balance in full or carry a small balance to build credit faster?
Pay in full every month. Carrying a balance does not build credit faster — it only costs you interest. Credit bureaus see on-time payments whether you pay $10 or $500, so there's no benefit to paying interest. The only thing that matters is that you pay by the due date.