Credit Cards That Are Easy to Get With Bad Credit
The Best Credit Cards For Bad Credit Of August 2022
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When you have a credit score that's less than stellar, it can be a challenge to find a credit card you can get approved for. And, if you apply for a card and get rejected, that can further impact your score as each credit inquiry goes on your credit report.
You typically have two options when you have subpar credit and you're seeking a credit card:
a secured card, where you put down a security deposit equal to the line of credit you're seeking or an unsecured credit card designed for those with poor credit.
If you balk at the idea of putting down a deposit, know that many unsecured cards for people with bad credit often come laden with fees and sky-high APRs. If you go with a secured card, try to choose one that reports to all three credit bureaus so your on-time payments can help build your credit score as quickly as possible.
Whatever you choose, aim to use the new line of credit as a building block towards a stronger credit profile so you can qualify for better cards and rates on your other loans in the future.
Show Summary
The Best Credit Cards For Bad Credit
- Petal® 1 "No Annual Fee" Visa® Credit Card: Best Overall
- OpenSky® Secured Visa® Credit Card: Best for No Credit Check
- Discover it® Secured Credit Card: Best for First-Year Bonus
- Navy FCU nRewards® Secured Credit Card *: Best Credit Union Card For Bad Credit
- Tomo Credit Card *: Best for Newcomers to the U.S.
- Credit One Bank® Platinum Visa® for Rebuilding Credit *: Best for Rebuilding Credit
- Bank of America® Customized Cash Rewards Secured Credit Card *: Best for Everyday Rewards
Best for Everyday Rewards
Bank of America® Customized Cash Rewards Secured Credit Card *
Up to 3X Reward Rate
Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores or home improvementRead More
Regular APR
26.24% variable
Credit Score
Bad/Poor (0 - 649)
Why We Picked It
A secured card with no annual fee and the ability to earn rewards, this Bank of America card can provide a way forward for those needing to build their credit profile.
Pros & Cons
- No annual fee
- Earns cash-back rewards on eligible purchases
- Potential for an upgrade to an unsecured card
- The rewards system can be complicated to track
- An opening deposit of $200 is required
- There's a foreign transaction fee
Card Details
- Add your Bank of America® credit card to your mobile device then shop in-store or in-app using Apple Pay®, Google Pay™ or Samsung Pay
- 26.24% variable for APR on purchases and balance transfers
- No annual fee
- Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement & furnishings
- Earn 2% cash back at grocery stores and wholesale clubs
- Earn unlimited 1% cash back on all other purchases
- You'll earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%
- A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account
- Now, you can access your FICO® Score updated monthly for free, within your Mobile Banking app or in Online Banking
Here's a Summary of The Best Credit Cards For Bad Credit
Methodology
Forbes Advisor analyzed dozens of credit cards marketed toward subprime borrowers. Factors taken into consideration for each category included the annual fee, any monthly fees, security deposit requirements, annual percentage rate (APR) and other benefits that come with card ownership like rewards and other extras.
Best Credit Cards For Bad Credit
What Is a Bad Credit Score?
There are many different credit scoring models and each lender may have a particular version they use which means that the definition of a bad credit score may vary somewhat between lenders. While there's no exact number that counts as the threshold between "bad" and "good" credit, generally a FICO score below 580 is considered very poor and between 580 and 669 is generally considered fair.
Credit Cards and Credit Scores
The lower your credit score, the more limited your options when it comes to credit cards. Someone with bad credit will typically only be able to get approved for a secured card or a card with higher-than-average interest rates and other additional fees.
What causes bad credit?
Bad credit doesn't happen overnight. Typically someone ends up with a damaged credit score because they repeatedly miss payments or default completely on what they owe. Filing for bankruptcy will also have a negative impact on your credit score. Other actions that can lower your score include maxing out your cards, repeatedly making just the minimum payments or paying late multiple times.
How to Tell if You Need a Credit Card for Bad Credit
If you aren't quite sure whether or not a credit card for bad credit is the most suitable for your circumstances, here are a few things to consider.
Determine Your Credit Score
If you're looking to apply for a credit card and aren't quite sure what you might qualify for, you should check your credit score first to get an idea of where you stand. Depending on your results, it may be best to get a card with more lenient underwriting circumstances and work on improving your credit so you can apply for a better card down the line.
Consider Your Credit History
If you already know you've had some major financial missteps like a bankruptcy or loan default, it's likely that a credit card for bad credit will be a more realistic option than applying for a card designed for those with good or better credit. If you aren't clear on what your credit profile might look like, you can get a free credit report once a year from each of the three major credit reporting agencies at annualcreditreport.com.
How to Choose Credit Cards for Bad Credit
If you have bad credit, getting a credit card can be an opportunity to improve your credit profile. Here's what to look for in a card for bad credit:
- Reporting on-time payment behavior. You should choose a card that reports to at least one of the three major credit bureaus: Equifax, Experian and TransUnion. Over time, consistent payments will show up on your credit report and can help improve your credit standing. It's even better if you choose a card that reports to all three credit bureaus.
- Light on fees. Most cards for bad credit come with punishing fees like sky-high annual fees that can eat away at your credit limit, account opening fees or even fees for requesting a higher credit limit. Aim for a card that seeks to minimize your out-of-pocket costs just owning it.
- Ability to upgrade. Some secured cards will allow you to "graduate" to an unsecured card after several months of good payment behavior. This can be beneficial since you won't have to open another account once your credit has improved. Opening and closing new credit lines can have a negative effect on your score and undo some of your hard work.
How to Apply for Credit Cards With Bad Credit
If you know you have bad credit and are looking to apply for a credit card, you should still know where you stand in the spectrum of bad credit and have an idea of what your goals are in acquiring a credit card and what's realistically attainable.
Secured Credit Cards for Bad Credit
When you're brand new to credit or you've had some big credit missteps in your past, a secured credit card might be your best bet. Lenders who may be hesitant to issue credit to borrowers who have struggled financially may be more likely to approve applicants for a secured credit card, as it requires a deposit that can be seized if the debt is unpaid. That makes the borrower less of a risk to the lender.
Each secured card is different and comes with its own minimum and maximum credit limits, typically starting at a minimum required opening deposit of a few hundred dollars up to several thousand dollars, depending on the card maximum limit and how big of a deposit you're willing and able to part with.
Unsecured Credit Cards for Bad Credit
If you're simply lacking credit history or you haven't been building credit long enough to earn a good or better credit score, an unsecured card may be attainable. There are several unsecured cards on the market aimed at those without great credit. Just be aware that not all unsecured cards for better credit are created equal. Many of these cards come with annual fees and/or other fees like account opening fees that can eat away at your available credit. Unsecured cards for bad credit typically will also come with sky-high APRs which can make it expensive to carry a balance.
Credit Cards After Bankruptcy
Starting over financially after bankruptcy can be tricky. You can't apply for a card until your bankruptcy is discharged. But once it is, your best bet is to apply for a card as soon as the bankruptcy process is completed, so you can start rebuilding your credit right away.
There are steps you can take to rebuild your credit after a bankruptcy but depending on what type of bankruptcy you filed for, it will show up on your credit report for seven to ten years. However, that doesn't completely eliminate all credit card prospects.
There are a small handful of credit cards you can get even with a bankruptcy on your credit report, including ones that don't require a credit check. Make sure to read the terms and conditions of any card you're interested in to see if your financial circumstances match with the card's requirements and restrictions.
How to Get Approved for Credit Cards With Bad Credit
There's no guaranteed method of getting approved for a credit card. But you can improve your odds of success by knowing where you stand and only applying for a card that's designed for someone with your specific financial circumstances.
How to Prequalify for Credit Cards With Bad Credit
If an issuer offers prequalification for one or more of their credit cards, they'll typically show it on their website. To see if you prequalify, you'll be asked to enter a few details about yourself like your name, address and the last four digits of your Social Security number. This is so the issuer can run what's known as a soft check of your credit. This type of credit check, unlike a "hard" pull of your credit, won't have any impact on your score. Running a soft check doesn't mean you're starting the application process either, but it does allow an issuer to get an idea of what you may or may not qualify for when it comes to the cards they offer.
How to Improve Your Credit Score
Improving your credit score is synonymous with building better credit. There's no quick fix but there are moves you can make to get on the right track. For starters, always pay your bills on time. Your payment history makes up 35% of your credit score. If you're finding it a challenge to remember the due dates you can use autopay to keep you on track.
You should also do your best to keep your credit utilization ratio below 30%. This is measured by comparing your credit card balances to your overall credit card limit. Lenders use this ratio to evaluate how well you manage your finances. A ratio of less than 30% and greater than 0% is generally considered good.
Applying for too many new lines of credit can also hurt your credit score. Each time you apply for credit, the lender will run a hard credit check. This can drop your score by one to five points and if approved, lower your average account age which also can drop your credit score.if possible try to avoid applying for too many lines of credit when working on improving your score.
Bottom Line
Getting a credit card when you have bad credit is possible and can be a good stepping stone towards building better credit habits. However, not all credit cards targeting those without great credit are created equally. Choosing the right card for you will depend on a combination of your personal financial history and your financial goals.
Frequently Asked Questions
Can I get a credit card with bad credit?
You can get a credit card with bad credit but your choices will be limited to either a secured credit card or one of a small handful of unsecured credit cards available to those with bad credit.
If you do choose one of these options, a worthy goal is to use the card to help build your credit so you can eventually qualify for a card with better rewards and perks.
What should I look for in a credit card for bad credit?
If you have bad credit, getting a credit card can be an opportunity to improve your credit profile. The main things you want in a credit card designed for those without great credit is that the card reports on-time payment behavior to the major credit bureaus (Equifax, Experian and TransUnion) and ideally all three of them.
You also want to try and avoid cards that come with high annual fees and other charges like account opening fees. Finally, it can be a benefit to choose a card that will allow you to "graduate" to an unsecured card after several months of good payment behavior so you won't have to open another account once your credit has improved.
Can you do a balance transfer with bad credit?
If you're applying for a card with a 0% APR balance transfer offer or a lower interest rate than your current card has, it will be challenging to qualify with bad credit. Typically, these types of cards are available to those with the best credit.
When an issuer allows a cardholder to transfer a balance from another bank, it's a way for them to take on new customers. But an issuer takes a risk on anyone they extend a line of credit to. If your credit score deems you too risky to an issuer, you aren't likely to be approved for a balance transfer.
If you're looking for help taming a high-interest credit card balance and your credit doesn't qualify you to transfer your balance to another card, consider a personal loan, which may have more favorable rates. Or, speak to a credit counselor who might be able help you work through options to help improve your credit and pay down your debt.
What is a good APR for a credit card?
A good APR is generally one that is at or below the current average credit card interest rate. As of August 2021, the average credit card interest rate was 17.13%, according to data from the Federal Reserve. Someone with excellent credit can likely expect to qualify for a rate at or below the average. Someone with bad credit will likely have an APR higher than the average.
Other Credit Cards To Be Considered
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