Best Credit Cards for Bad Credit of August 2020

Our Picks for the Best Cards to Help You Build Credit

We publish unbiased reviews; our opinions are our own and are not influenced by payments we receive from our advertising partners. Learn about our independent review process and partners in our advertiser disclosure.

The best credit cards for bad credit help people with credit scores below 580 to build credit, save on fees, and maybe even earn rewards. Many of the cards on this list are secured cards, which means you have to put down a deposit to be able to use the card. Usually, you’ll get a credit limit equal to the amount of your deposit, but we’ve found one exception to that general rule. Read on for more about our favorite cards. 

Best Credit Cards for Bad Credit

Discover it® Secured

Best Overall

,

Best for Earning Rewards

,

Best for Avoiding Fees

,

Best for Customer Service

Our Rating Among Cards for Bad Credit
4.5
Discover it® Secured
Current Offer

Discover will match all the cash back you've earned at the end of your first year, automatically.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 22.99% variable
Annual Fee $0
Minimum Deposit to Activate $200
Allows upgrade to unsecured card Yes
Pay deposit in installments No
  • WHY WE CHOSE THIS CARD

    Finding a well-rounded, quality card can be hard when you have bad credit, but this card is definitely a winner. For starters, you’ll earn cash back, and at the end of your first year, your earnings will be doubled. There’s no annual fee or foreign transaction fee, and Discover will even waive your first late fee. The customer service features are great, too. You’ll get free access to your FICO credit score and help monitoring your credit report. And after eight months, Discover will automatically begin considering you for a possible upgrade to an unsecured card.

  • PROS & CONS

    Pros

    • Ability to earn cash-back rewards while building credit
    • Responsible use can lead to automatic unsecured card upgrade
    • No foreign transaction fee
    • Cash-back match as a first year bonus

    Cons

    • Low cap on highest rewards earning rate
    • Mediocre maximum credit limit compared to other secured cards
  • HIGHLIGHTS
    • No annual fee, earn cash back, and build your credit with responsible use.
    • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
    • Automatic reviews starting at 8 months to see if Discover can transition you to an unsecured line of credit and return your deposit.
    • Get 100% U.S.-based customer service and get your free Credit Scorecard with your FICO Credit Score.

Capital One® Secured Mastercard®

Best Security Deposit Features

Our Rating Among Cards for Bad Credit
4.8
Capital One® Secured Mastercard®
Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 26.99% variable
Annual Fee $0
Minimum Deposit to Activate $49
Allows upgrade to unsecured card Yes
Pay deposit in installments Yes
  • WHY WE CHOSE THIS CARD

    If you don’t have much money saved for a deposit, this secured card is for you. It may only require a partial deposit of $49 to access a $200 credit line (depending on your credit), which is unheard of. You can deposit more money before your account opens, too, which offers some flexibility if you need more time to gather funds. Plus, demonstrate good credit use and make your first five monthly payments on time for an additional credit limit increase, possibly up to $1,000.

  • PROS & CONS

    Pros

    • No annual fee
    • Some cardholders only have to deposit $49 or $99 for a $200 credit line
    • Access to a higher credit limit possible—without an additional deposit—once you make six on-time payments

    Cons

    • Maximum credit limit is just $1,000
    • One of the highest ongoing APRs among secured cards
  • HIGHLIGHTS
    • $49, $99 or $200 refundable minimum security deposit. Access to an authorized bank account is required to make your security deposit.
    • Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line.
    • Be automatically considered for a higher credit line in as little as 6 months.
    • Pick your own monthly due date and payment method—check, online or at a local branch.

Green Dot primor® Visa® Gold Secured Credit Card

Best With a Low APR

Our Rating Among Cards for Bad Credit
3.5
Green Dot primor® Visa® Gold Secured Credit Card
Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 9.99% fixed
Annual Fee $49
Minimum Deposit to Activate $200
Allows upgrade to unsecured card No
Pay deposit in installments No
  • WHY WE CHOSE THIS CARD

    If you need to carry a balance, this card can reduce your monthly interest expenses as you rebuild your credit. It boasts an astounding 9.99% fixed APR, which is low even by unsecured card standards. A credit check is not required when you apply for this card either. The minimum required deposit is $200, but you can deposit as much as $5,000 to establish your credit limit, which is generous for a secured card and great if you have extra cash now and want the flexibility to safely carry a balance later.

  • PROS & CONS

    Pros

    • Very low APR for a secured card
    • No credit check required when you apply
    • Pretty high credit limit (as long you supply the matching security deposit)

    Cons

    • High annual fee
    • Miscellaneous fees you’re less likely to find among competitors, including for replacement cards
  • HIGHLIGHTS
    • Whether you put down $200 or $5,000, your credit limit is equal to the amount of the refundable security deposit.
    • Not a prepaid or debit card — spend within your credit limit, then pay your balance monthly, just like a regular credit card. Use everywhere Visa is accepted in the U.S.
    • Relax, good credit or a bank account is not needed to get a card. And, since there’s no credit check, there’s no effect on your credit when you apply.
    • Be sure to make on-time payments and keep your card balance low. Your payment and usage history gets reported to the three major credit bureaus, which can help you build a positive credit file over time.

Credit One Bank® Unsecured Visa®

Best Unsecured Card With Rewards

Our Rating Among Cards for Bad Credit
4.0
Credit One Bank® Unsecured Visa®
Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 17.99% - 23.99% variable
Annual Fee $0 - $99
Rewards Earning Rate 1% cash back on eligible purchases including gas, groceries and phone services.
Foreign transaction fee (%) 3%
  • WHY WE CHOSE THIS CARD

    If you have poor credit and really don’t want a secured card, this is a decent option. You’ll get 1% cash back on all your grocery and gas purchases, and even on several monthly bills (cellphone, internet, cable, and satellite TV). Plus, when you use this card at retailers that participate in the More Cash Back Rewards program, such as Walmart and Costco, you’ll earn up to 10% cash back. Just watch out for some less favorable terms, depending on your credit. You may get hit with an annual fee of up to $99 or have no grace period on interest charges.

  • PROS & CONS

    Pros

    • Low APR for an unsecured card targeting people with poor credit
    • Modest rewards on some everyday expenses
    • Minimum credit limit of $300—more than what some secured cards offer

    Cons

    • Annual fee and other terms won’t be revealed until you’re approved and offered the card
    • Potentially high annual fee, even compared to secured cards
    • Only some cardholders are given a grace period on finance charges
  • HIGHLIGHTS
    • Earning cash back rewards has never been easier. Get 1% cash back rewards on gas and groceries as well as your monthly mobile phone, internet, cable, and satellite TV services.
    • Get rewarded for responsible credit use! Your account will be reviewed regularly for credit line increase opportunities to ensure you get all the credit you deserve.
    • Flexibility to choose a payment due date.
    • Enjoy extra ways to get cash back rewards. You’ll get up to 10% More Cash Back Rewards from participating merchants and new offers are added frequently!
Find Your Credit Card Match When it's your goal to build credit, we believe it's important to seek out credit cards with low fees and features that help you improve your credit score, but we know you might have different priorities. See what suits you best.
My Credit Score is
POOR EXCELLENT
{{ groupWeights[item].display }}
A LITTLE A LOT
{{ filterMessage }}
Your Results

What Is Bad Credit?

Having bad credit is generally defined as having a history of negative items on your credit report such as late payments and tax liens. If you have a FICO credit score lower than 580, you have poor or bad credit. 

Who Needs a Credit Card for Bad Credit?

Generally, you need a credit card designed for bad credit if you can’t get approved for other cards. The new card can help you rebuild your credit to counteract the effect of negative items in the past.

One reason for needing a credit card for bad credit is that you had a recent bankruptcy. You may also have had an issue in the past, but haven't applied for a new card since. So you need a new positive record of credit to upgrade to better cards in the future.

How Do You Use Credit Cards to Improve Your Credit?

When using credit cards to rebuild your credit, start slow. When possible, choose a card that doesn’t have an annual fee. Building a lengthy credit history is important, and if the card doesn’t charge an annual fee, it can be less costly to carry the card long term. 

Try to keep your credit usage below 30% of your credit limit. That means you should avoid charging close to the full credit limit, even if you pay it off each month. You don’t know when during the month credit reports will get pulled for scoring, and FICO considers how close your balance is to your credit limit. Don’t max out your card, even for five days, and make on-time payments.

What Are the Differences Between Secured and Unsecured Credit Cards?

If you have bad credit, you have unsecured and secured credit card options. An unsecured card is a typical credit card with no collateral. A secured card requires you to deposit money into a special account, and your credit limit is generally equivalent to your deposit.

The purpose of a secured card is to help you establish or re-establish credit with little risk to the card issuer. Often the card becomes an unsecured card, and your deposit is returned after you have demonstrated good payment behavior for a period of time. 

How Do You Pick the Best Credit Card for Bad Credit?

If you have bad credit, you shouldn’t have to get a card with an annual fee that takes up a third to half of your credit line. Apply for secured cards or cards that are specifically labeled for bad credit instead. Those are better options than cards with high annual fees. Here's another summary of our top picks for credit cards for people with bad credit:

Best Credit Cards for Bad Credit
Credit Card Category Annual Fee
Discover it Secured Best Overall $0
Capital One Secured Mastercard Best Security Deposit Features $0
Green Dot primor Visa Gold Secured Credit Card Best With a Low APR $49
Credit One Bank Unsecured Platinum Visa Best Unsecured Card With Rewards $0-$99
Discover it Secured Best for Earning Rewards $0
Discover it Secured Best for Avoiding Fees $0
Discover it Secured Best for Customer Service $0

If in doubt about your credit score, find out where it falls on the spectrum of poor to excellent by checking it for free. Your score may not be as bad you think, and many services will offer tips on how to improve it.

What About Store Credit Cards?

Pros
  • Discounts on items at your preferred stores

  • Easier credit approval

  • Special store event invites and rewards programs

Cons
  • High interest rates

  • Temptation to buy too much

  • Lack of flexibility

Pros Explained

  • Discounts on items at your preferred stores: The biggest perk for store cards is a standing percentage off of merchandise in the store and special coupons at different times of the year.
  • Easier credit approval: Store cards often have more flexible approval standards based on credit score and loyalty. Similar to when a bank or credit union offers you a credit card because of your history with their company, stores may recognize through rewards programs that you are a frequent and valued shopper.
  • Special store event invites and rewards programs: You may get invites to friends and family days, free concerts sponsored by the store, and ways to boost savings through rewards programs. 

Cons Explained

  • High interest rates: Store cards are not known for low interest rates. However, they aren’t known for annual fees either. If you pay off your card monthly, they are excellent and cheap cards for building credit.
  • Temptation to buy too much: A credit card that is specifically for your favorite store comes with a lot of temptation. Make sure you pay extra attention to your budget.
  • Lack of flexibility: Purchase flexibility is relegated to a family of stores, at most.

How Do You Apply for a Credit Card for Bad Credit?

The most important thing to remember when applying for a credit card when you have bad credit is to apply slowly and cautiously. Credit scores can drop when you apply for credit too frequently. Avoid applying for cards for which you're likely to get denied until your credit improves. 

The actual application process is simple. You can find a card online, such as one of the cards listed above, and apply online too. You'll need to fill in your personal identification and income, and if you’re applying for a secured card, supply bank account information in order to make the required deposit. 

How Long Does It Take to Rebuild Credit?

You can begin to rebuild your credit in just a few months. However, the exact time it takes to rebuild your credit varies from person-to-person. For example, if you have a bankruptcy on your credit report, it will affect your credit score for seven years or more. 

Methodology

We collect data on hundreds of cards and score more than 55 features that affect your finances. We do this because it's our mission to give you unbiased, comprehensive credit card reviews.

Note

Our reviews are always impartial. No one can influence which cards we review, the way we present them to you, or the ratings they receive.

The scores and reviews come directly from the data we collect and our editorial expertise, and we focus on three areas:

  1. How much does it cost? With credit card debt at an all-time high, we believe you should know the cost of carrying a balance. Because of that, we give regular purchase APRs significant weight in overall scores, and cards receive low marks if they have an array of pricey fees. 
  2. What are the rewards worth? Cards accumulate rewards in different currencies—points, miles, cash back—and their values vary widely. To simplify the problem, we built a system that fairly compares rewards and gives them a dollar value. We do this by looking at the ways you can earn and use rewards, which includes evaluating Americans’ typical spending habits and analyzing common travel patterns. 
  3. Does it make your life easier? Our scoring system favors cards that accept a wide range of credit profiles and offer simple solutions for things like checking your credit score or contacting customer service. Finally, we give preference to credit cards that have several tools for dealing with fraudulent charges. 

For every review on The Balance, we hold the credit cards to these standards, and we set the bar high. While we recognize the appeal of splashy features like six-digit sign-up bonuses, our approach ensures that credit cards with the best combination of value, affordability, and accessibility receive the highest scores. See our full methodology for more details.