What cards will accept you with a score under 500
A credit score under 500 means most standard credit cards will reject your process. The cards that do accept applicants at this score level are secured credit cards — you deposit cash as collateral, and the card issuer holds that money while you use the card. The deposit becomes your credit limit. You are not borrowing against it; the issuer straightforward holds it as insurance against default.
Secured cards from major issuers like Capital One, Discover, and U.S. Bank report to all three credit bureaus, which means your payment history builds your score over time. Some also offer a path to an unsecured card after 6 to 12 months of on-time payments. A few cards marketed to people rebuilding credit — sometimes called "second chance" cards — may also consider you, though these often carry higher fees and less favorable terms than secured options.
Cards that do not report to credit bureaus, or that charge extremely high upfront fees, will not help you rebuild. The goal is to find a card that costs as little as possible while reporting your responsible use to the bureaus.
Key Takeaways
- Secured credit cards require a cash deposit that becomes your credit limit, and they report to credit bureaus so your payments build your score.
- Deposits typically range from $200 to $2,500, and you control how much you deposit — a smaller deposit means a smaller limit but lower risk.
- Annual fees on secured cards range from $0 to $95; compare the fee against how long you plan to hold the card before upgrading.
- Your payment history matters far more than your current score — cards that report on-time payments to bureaus will raise your score faster than cards that do not.
- After 6 to 12 months of on-time payments, many secured card issuers will convert your account to an unsecured card and return your deposit.
How secured cards work and what they cost
When you open a secured card, you send the issuer a deposit — usually $200 to $2,500 — and that amount becomes your credit limit. You then use the card like any other: make purchases, receive a monthly statement, and pay a bill. The deposit sits in a separate account and earns a small amount of interest (usually 0.01% to 0.5% annually, depending on the issuer). You do not lose the deposit; the issuer straightforward holds it.
The cost of a secured card comes from the annual fee, not the deposit. Most secured cards charge $0 to $95 per year. Some charge nothing in year one and then charge a fee in later years. Others charge a flat fee every year. A few charge both an annual fee and an upfront processing fee. Before you explore, add up the total cost: annual fee plus any processing fee, then divide by how long you plan to keep the card. If you plan to upgrade to an unsecured card in 12 months, a $95 annual fee costs you roughly $8 per month. If you plan to keep it for three years, that same fee costs about $2.50 per month.
Interest rates on secured cards are typically higher than on standard cards — often 18% to 24% APR. This matters only if you carry a balance. If you pay your statement in full each month, you pay no interest regardless of the APR. Paying in full is the fastest way to rebuild your score.
Comparing secured card options at your score level
| Card | Minimum Deposit | Annual Fee | Reports to Bureaus | Path to Unsecured |
|---|---|---|---|---|
| Capital One Secured Mastercard | $200 | $0 first year, then $39 | Yes, all three | Yes, typically 6 months |
| Discover it Secured Credit Card | $200 | $0 | Yes, all three | Yes, typically 6 months |
| U.S. Bank Secured Visa Card | $500 | $25 | Yes, all three | Yes, typically 7 months |
| OpenSky Secured Visa | $200 | $35 | Yes, all three | No automatic upgrade |
The Discover and Capital One cards are the most common choices because they have no annual fee in year one and a clear upgrade path. The U.S. Bank card requires a higher deposit but charges a lower fee. OpenSky does not require a credit check and reports to all three bureaus, but it does not offer an automatic upgrade to unsecured status — you would need to explore for a different card after building your score.
How to choose a deposit amount
You control how much you deposit, and the deposit becomes your credit limit. A $200 deposit gives you a $200 limit; a $1,000 deposit gives you a $1,000 limit. There is no rule that says you must deposit a certain amount. Deposit what you can afford to lock away for 6 to 12 months without needing it.
A smaller deposit ($200 to $500) is enough to rebuild your score if you use the card responsibly. Credit bureaus care about your payment history and how much of your limit you use each month — called your utilization ratio. Using $50 of a $200 limit (25% utilization) looks better than using $500 of a $2,000 limit (25% utilization), even though the ratio is the same. Keeping your utilization below 30% helps your score rise faster.
A larger deposit ($1,000 or more) gives you more room to spend without hitting high utilization, but it also means more of your money is locked away. If you only plan to spend $200 to $300 per month, a $500 deposit is usually sufficient. If you plan to use the card for larger purchases, a higher deposit makes sense.
What happens after you prove yourself
Most secured card issuers review your account after 6 to 12 months of on-time payments. If you have paid every bill on time and kept your utilization low, they will often convert your account to an unsecured card. When this happens, your deposit is returned to you — usually within 5 to 10 business days — and your credit limit may increase. Your account history stays the same, so the positive payment record you built continues to help your score.
Some issuers do not automatically upgrade; you may need to request it or explore for a different unsecured card from the same company. Read the card's terms before you explore so you know what to expect. If the issuer does not offer an upgrade path, you can still use the secured card to build your score, then explore for an unsecured card from another issuer once your score improves.
After you upgrade or switch to an unsecured card, keep the secured card open if the issuer allows it. Closing the account removes that positive payment history from your active accounts, which can temporarily lower your score. Keeping it open — even if you do not use it — helps your score over time.
Using the card to actually rebuild your score
Opening a secured card does not rebuild your score by itself. Your score rises because of what you do with the card after you open it. The most important action is paying your full statement balance on time, every month. A single late payment can drop your score by 50 to 100 points and will stay on your credit report for seven years. Set up automatic payments for at least the minimum due, or better yet, the full balance.
The second most important action is keeping your balance low relative to your limit. If your limit is $500, try to keep your balance below $150 at any point in the month. This shows lenders you can manage credit responsibly. Bureaus typically report your balance on the day your statement closes, so if you make a large purchase early in the month, pay it down before your statement date.
Do not close other accounts or stop using them just because your score is low. The length of your credit history matters — older accounts help your score even if they are not active. If you have other cards or loans, keep making payments on those as well. A mix of credit types (a card, a loan, a store card) helps your score more than a single card alone.
Red flags to avoid when shopping for cards
Some cards marketed to people with low scores are designed to extract fees rather than help you rebuild. Avoid cards that charge upfront processing fees of more than $50, or that charge monthly maintenance fees on top of an annual fee. Avoid cards that do not report to all three credit bureaus — Equifax, Experian, and TransUnion — because payment history that is not reported does not help your score.
Avoid cards that require you to buy a "starter package" of checks or other products before you can use the card. Avoid cards that offer a very low credit limit (under $100) relative to the deposit you are putting down — this suggests the issuer is not confident in the product. Avoid any card that promises to "fix" your credit or "remove" negative items from your report; no card can do this, and companies making these claims are often scams.
The safest approach is to stick with cards from established issuers — Capital One, Discover, U.S. Bank, and similar — that have been offering secured cards for years and have clear terms published on their websites.
Frequently Asked Questions
Will a secured card hurt my score when I explore?
A hard inquiry will lower your score by a few points temporarily, usually 5 to 10 points. This dip fades within a few months. Opening the new account also lowers your average account age slightly, but the positive payment history you build will outweigh this loss within 6 to 12 months. The long-term benefit of a secured card far exceeds the short-term dip from explore.
Can I use a secured card for everyday purchases?
Yes. A secured card works exactly like a regular card at the point of sale. Merchants cannot tell it is secured. You can use it for groceries, gas, online shopping, and any other purchase. The only difference is that your deposit backs the credit line instead of your creditworthiness.
What if I cannot afford a $200 deposit right now?
Some secured cards allow deposits as low as $200, but if even that is out of reach, you have other options. A credit-builder loan from a credit union or online lender lets you borrow a small amount (usually $300 to $1,000) and make monthly payments; the lender reports your payments to bureaus and you get the money back after you finish paying. This costs less upfront than a secured card deposit.
How long until my score improves enough to get a regular card?
Most people see a 50 to 100 point increase within 6 months of on-time payments on a secured card. After 12 months, increases often slow down because the impact of recent positive history levels off. You may be able to move to an unsecured card after 6 to 12 months, depending on the issuer and how much your score has improved. Some issuers will upgrade you even if your score is still under 600.
What happens to my deposit if I miss a payment?
If you miss a payment, the issuer will not automatically take your deposit. They will charge late fees and report the late payment to credit bureaus, which will hurt your score. If you continue to miss payments and default on the card, the issuer may use your deposit to cover the debt. This is why the deposit exists — to protect the issuer, not to penalize you for a single missed payment. If you are struggling to make a payment, contact the issuer before the due date to discuss options.