What credit cards are available to people with low credit scores
If your credit score is below 620, most standard credit cards will reject your process. But you have real options: secured credit cards, credit-builder cards, and cards designed for people rebuilding credit all exist specifically for this situation. These cards come with higher interest rates and lower credit limits than cards for people with excellent credit, but they work the same way — you charge purchases, receive a bill, and build payment history as you pay it back.
The key difference between these options is what they cost you and what they require upfront. A secured card asks you to deposit cash as collateral. A credit-builder card charges you a monthly fee but doesn't require a deposit. Cards marketed for "bad credit" or "fair credit" typically require neither, but charge higher interest rates to offset the risk to the issuer. Understanding which type fits your situation and budget matters, because choosing wrong can cost you hundreds of dollars in fees over a year.
Key Takeaways
- Secured credit cards require a cash deposit (usually $200 to $2,500) that becomes your credit limit, and they report to all three credit bureaus to build your payment history.
- Credit-builder cards charge a monthly fee (typically $5 to $15) but don't require a deposit, and the card issuer holds your payments in a savings account you access after you've made all payments on time.
- Unsecured cards for low credit scores exist but charge annual fees and interest rates that can reach 30% or higher, making them expensive unless you pay your balance in full each month.
- Your payment history matters far more than your current score — making every payment on time, even for a year, can move your score up enough to open doors to better cards.
How secured credit cards work
A secured card requires you to put down a cash deposit with the card issuer. That deposit becomes your credit limit. If you deposit $500, your credit limit is $500. You then use the card like any other — charge purchases, receive a monthly bill, and pay it back. The deposit sits in a separate account and stays there; the issuer uses it only if you stop paying your bills entirely.
The appeal is straightforward: issuers see the deposit as insurance, so they're willing to take the risk on someone with a low score. You build a payment history that reports to Equifax, Experian, and TransUnion — the three credit bureaus. After 6 to 18 months of on-time payments, many issuers will convert your secured card to an unsecured one and return your deposit. Some let you request the conversion earlier if your score improves.
The cost depends on the card. Some secured cards charge no annual fee. Others charge $25 to $95 per year. Interest rates typically range from 18% to 24%, though this varies by issuer. If you carry a balance, you'll pay interest on top of your annual fee. The math works in your favor only if you pay your full balance each month — otherwise, the interest charges quickly exceed what you'd pay on an unsecured card.
Credit-builder cards and how they differ from secured cards
A credit-builder card doesn't require a deposit. Instead, you pay a monthly fee — usually $5 to $15 — and the issuer holds that money in a savings account. After you've made all your monthly payments on time (typically 12 to 24 months), the issuer releases the savings account to you. So if you pay $10 a month for 24 months, you'll have $240 in a savings account at the end, minus any fees the issuer charged.
The trade-off is that you're not actually borrowing money in the traditional sense. You're paying a fee to build credit history. Your credit limit is usually very low — often $300 to $500 — and you can't charge more than you've already paid into the account. This makes credit-builder cards safer for issuers but less useful for you if you need to actually use the card for purchases.
Credit-builder cards report to all three credit bureaus, just like secured cards do. The monthly fee structure means your total cost is predictable — you know exactly how much you'll pay over the life of the card. This makes them cheaper than secured cards if you'd otherwise pay interest, but more expensive if you can pay your secured card balance in full each month.
Unsecured cards for people with low credit scores
Some issuers offer unsecured cards to people with low credit scores — no deposit required, no monthly fee. These cards sound appealing until you look at the cost. Annual percentage rates (APRs) often start at 24% and can reach 35% or higher. Annual fees range from $39 to $99. Some cards also charge monthly maintenance fees on top of the annual fee.
The math only works if you pay your full balance every month and never carry a balance forward. If you charge $500 and pay it off in full before the due date, you pay nothing in interest. But if you carry even $100 forward to the next month on a card with a 30% APR, you'll owe roughly $2.50 in interest that month alone. Over a year, that $100 costs you $30 in interest — before any annual fee.
These cards do report to the credit bureaus, so they build your payment history the same way secured and credit-builder cards do. The question is whether the higher interest rate is worth it to avoid putting down a deposit or paying a monthly fee. For most people with low scores, a secured card or credit-builder card is the cheaper choice.
What to look for when comparing cards
Start by deciding whether you can afford to put down a deposit. If yes, compare secured cards on three things: annual fee, interest rate, and conversion timeline. A card with no annual fee and a 19% APR that converts after 6 months of on-time payments is better than one charging $95 per year and converting after 18 months, even if the interest rate is lower. Calculate the total cost: annual fee plus (interest rate × average balance) over the time you expect to hold the card.
If you can't put down a deposit, compare credit-builder cards on monthly fee and account release timeline. A $10 monthly fee for 12 months costs $120 total. A $5 monthly fee for 24 months costs $120 total. The difference is how long you're locked into the card. Shorter timelines let you move to a better card sooner.
For unsecured cards, add up the annual fee, any monthly fees, and estimate your interest cost. If you plan to pay in full each month, focus on the annual fee alone. If you might carry a balance, the interest rate matters more than the annual fee — a card with a $39 annual fee and 24% APR is cheaper than one with a $99 annual fee and 35% APR if you carry a balance.
How using a low-score card actually improves your credit
Your credit score is built from five factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%). A new card helps with three of these. Payment history is the biggest — making every payment on time, even if it's just the minimum, shows lenders you follow through. Amounts owed improves because you're using only a small portion of your available credit (if your limit is $500 and you charge $50, you're using 10%, which is good). Length of credit history grows straightforward by keeping the card open.
The improvement isn't when ready. Most credit bureaus update monthly, so you'll see movement in your score 30 to 45 days after your first on-time payment. After 6 months of on-time payments, the improvement is usually noticeable — often 50 to 100 points, depending on where you started. After a year, many people see their score move from the low 600s into the mid-700s, assuming they haven't missed any payments and haven't taken on new debt.
The catch is that one missed payment can erase months of progress. A single late payment stays on your credit report for seven years and can drop your score 100 points or more. This is why choosing a card you can actually afford to use matters — if the monthly fee or interest charges strain your budget, you're more likely to miss a payment.
Common mistakes to avoid
The biggest mistake is explore for multiple cards at once. Each process triggers a hard inquiry, which temporarily lowers your score by a few points. More importantly, multiple inquiries in a short time signal to lenders that you're desperate for credit, which makes them less likely to approve you. Space applications out by at least three months.
The second mistake is maxing out your credit limit. If your limit is $500 and you charge $450, you're using 90% of your available credit. This hurts your score, even if you pay on time. Keep your balance below 30% of your limit — so on a $500 card, charge no more than $150 at a time. This is true even if you pay in full each month; the balance reported to credit bureaus is the balance on your statement, not what you owe after paying.
The third mistake is closing the card after your score improves. Closing it removes available credit from your total, which can hurt your score. It also shortens your average account age if it's one of your older accounts. Keep the card open and use it occasionally — a small charge every few months, paid in full, keeps the account active without costing you anything.
When to move to a better card
Most people can move to a standard unsecured card once their score reaches 650 to 670. At that point, you'll find cards with lower interest rates, no annual fee, and better rewards. Check your score before explore — you can get a free score from your credit card issuer, from Credit Karma, or from AnnualCreditReport.com, which is the official site for free credit reports.
If you started with a secured card, contact the issuer after 6 to 12 months of on-time payments and ask about conversion. Some issuers convert automatically; others require you to request it. When they convert, your deposit is returned to you — usually within 5 to 10 business days.
If you started with a credit-builder card, you'll automatically receive your savings account once the term ends. At that point, you can close the card and move to a standard card, or keep it open as a second account to maintain your credit mix.
Frequently Asked Questions
Will getting a credit card hurt my credit score?
The process itself causes a small, temporary drop — usually 5 to 10 points — from the hard inquiry. But once you start making on-time payments, your score will rise. After 6 months of on-time payments, the initial dip is usually erased and your score is higher than it was before you applied.
Can I use a secured card at the same time as another card?
Yes. Having multiple cards actually helps your score by improving your credit mix and lowering your overall utilization rate. If you have a $500 secured card and a $300 credit-builder card, your total available credit is $800. Spreading $200 in charges across both cards means you're using only 25% of your total credit, which is better than using 40% on one card.
What happens if I miss a payment on a low-score card?
The issuer will report the missed payment to the credit bureaus, and it will stay on your report for seven years. Your score will drop significantly — often 100 points or more. The issuer may also charge a late fee (typically $25 to $35) and increase your interest rate. If you miss a payment on a secured card, the issuer may use your deposit to cover the debt.
How long does it take to rebuild my credit with a new card?
Most people see noticeable improvement within 6 months of on-time payments. Reaching a score of 650 to 670 — the threshold for standard cards — typically takes 12 to 24 months, depending on how low your starting score was and whether you have other negative items on your report.
Is it better to get a secured card or a credit-builder card?
Secured cards are better if you can afford the deposit and want to actually use the card for purchases. Credit-builder cards are better if you can't put down a deposit or want a predictable monthly cost. Both build credit equally well; the choice depends on your budget and whether you need the card for spending.