Credit Cards for Bad Credit

Simply getting a credit card will not help you build your credit history. Making on-time minimum payments with all of your creditors and keeping account balances low relative to the credit limit are key to receiving positive marks on your credit history. Prepaid debit cards, unlike credit cards, do not provide a line of credit and do not influence your credit history. Choose from secured and unsecured credit cards, and prepaid card offers below - some of them are fee-based.

See offers from our partners below.

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 APPLY ONLINE

at Discover's
secure site

Credit Needed
Fair/New to Credit
  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • A security deposit of $200 or more will establish your credit line (up to the amount we can approve). Automatic monthly reviews starting at 8 months to see if we can transition you to an account with no security deposit.
  • Reports to the three major credit bureaus. Plus, get your FICO® Credit Score for free on monthly statements, on mobile and online.
  • Earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases.
  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • Tools to assist you; email alerts, text reminders and 24/7 customer service.
  • See additional Discover it® Secured Card details
 APPLY NOW

at Discover's
secure site

Credit Needed
Fair/New to Credit
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    10.99% for 6 months
    Regular APR
    23.99% Variable
    Annual Fee
    $0
    Credit Needed
    Fair/New to Credit
 APPLY ONLINE

at First PREMIER® Bank's
secure site

Credit Needed
Fair/Bad Credit
  • Have a checking account? Apply today!
  • A credit card offer for those currently building credit history
  • All credit types welcome to apply!
  • Quarterly FICO score on your monthly billing statement.
  • Chip card technology, so paying for your purchases is more secure at chip-card terminals
  • Make your payments on time each month, and keep your balance low relative to the credit limit, for positive marks on your credit report.
  • The next First PREMIER Bank credit card customer could be you!
  • See additional First PREMIER® Bank MasterCard® Credit Card details
 APPLY NOW

at First PREMIER® Bank's
secure site

Credit Needed
Fair/Bad Credit
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    See Issuer Website
    Annual Fee
    See Issuer Website
    Credit Needed
    Fair/Bad Credit
 APPLY ONLINE

at Credit One Bank's
secure site

Credit Needed
Bad Credit
  • See if you Pre-Qualify without harming your credit score
  • 1% cash back on eligible purchases, terms apply
  • No deposit requirements and opportunities to build your credit
  • Enjoy the flexibility to choose your payment due date. Terms apply.
  • Receive opportunities for credit line increases, a fee may apply
  • See additional Credit One Bank® Cash Back Credit Card details
 APPLY NOW

at Credit One Bank's
secure site

Credit Needed
Bad Credit
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    16.99% - 24.99% Variable
    Annual Fee
    $0 - $99
    Credit Needed
    Bad Credit
 APPLY ONLINE

at Capital One's
secure site

Credit Needed
Limited, Bad
  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide
  • See additional Capital One® Secured Mastercard® details
 APPLY NOW

at Capital One's
secure site

Credit Needed
Limited, Bad
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    24.99% (Variable)
    Annual Fee
    $0
    Credit Needed
    Limited, Bad
 APPLY ONLINE

at Credit One Bank's
secure site

Credit Needed
Bad Credit
  • No security deposit required. Get a 100% unsecured card that can help grow and build credit.
  • Focused on growing or rebuilding your credit? We report account activity to all three major credit bureaus each month to help keep your credit score up-to-date.
  • Find out if you're Pre-Qualified without harming your credit score. It's fast, easy, and secure.
  • Looking for more credit? Get credit line increase opportunities, a fee may apply
  • Get 1% cash back on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV. Terms apply.
  • Your account is safeguarded against unauthorized charges with Zero Fraud Liability at no additional charge
  • Stay in-the-know about your account with custom email and text alerts that remind you of your payment due date, notify you when a payment posts, or warn you if your available credit runs low
  • Show off your style with a premium card design, a fee may apply.
  • See additional Credit One Bank® Unsecured Platinum Visa® details
 APPLY NOW

at Credit One Bank's
secure site

Credit Needed
Bad Credit
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    16.99% - 24.99% Variable
    Annual Fee
    $0 - $99
    Credit Needed
    Bad Credit
 APPLY ONLINE

at First PREMIER® Bank's
secure site

Credit Needed
Fair/Bad Credit
  • Must have checking account to qualify.
  • Unlike some other issuers, we may approve those currently building their credit history.
  • Monthly reporting to the major Consumer Reporting Agencies.
  • Issued by FDIC-insured First PREMIER® Bank.
  • Only you can build a good credit history. Make your payments on time each month, and keep your balance low relative to the credit limit, for positive marks on your credit report each month.
  • Top 20 Issuer of MasterCard Credit Cards
  • See additional First PREMIER® Bank Credit Card details
 APPLY NOW

at First PREMIER® Bank's
secure site

Credit Needed
Fair/Bad Credit
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    See Issuer Website
    Annual Fee
    See Issuer Website
    Credit Needed
    Fair/Bad Credit
 APPLY ONLINE

at Capital Bank's
secure site

Credit Needed
No Credit Check
  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search "OpenSky Card" in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
  • *View our Cardholder Agreement located at the bottom of the application page for details of the card.
  • See additional OpenSky® Secured Visa® Credit Card details
 APPLY NOW

at Capital Bank's
secure site

Credit Needed
No Credit Check
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    18.39% (Variable)
    Annual Fee
    $35
    Credit Needed
    No Credit Check
 APPLY ONLINE

at Celtic Bank's
secure site

Credit Needed
Bad Credit
  • All credit types welcome to apply!
  • Monthly reporting to the three major credit bureaus
  • Initial Credit Limit of $500.00!* (subject to available credit)
  • Fast and easy application process; results in seconds
  • Use your card at locations everywhere that Mastercard® is accepted
  • Free online account access 24/7
  • Checking Account Required
  • See additional Surge Mastercard® Credit Card details
 APPLY NOW

at Celtic Bank's
secure site

Credit Needed
Bad Credit
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    See Terms*
    Annual Fee
    See Terms*
    Credit Needed
    Bad Credit
 APPLY ONLINE

at Mid America Bank & Trust's
secure site

Credit Needed
Bad/Fair
  • Checking Account Required
  • Fast and easy application process; response provided in seconds
  • A genuine VISA card accepted by merchants nationwide across the USA and online
  • Manageable monthly payments
  • If approved, simply pay a Processing Fee to open your account and access your available credit
  • Reports monthly to all three major credit bureaus
  • Select your favorite card design from our gallery, for free!
  • No-Fee credit line increase opportunities!
  • See additional Total VISA® Unsecured Credit Card details
 APPLY NOW

at Mid America Bank & Trust's
secure site

Credit Needed
Bad/Fair
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    See Terms*
    Annual Fee
    See Terms*
    Credit Needed
    Bad/Fair
 APPLY ONLINE

at Credit One Bank's
secure site

Credit Needed
Bad Credit
  • See if you Pre-Qualify without harming your credit score.
  • This fully unsecured credit card with no deposit requirement can be helpful in growing or building credit. Your account activity will be reported monthly to all three major credit bureaus.
  • All the features you want in a credit card are included. Get 1% cash back on eligible purchases, take advantage of free online credit score tracking, and enjoy credit line increase opportunities. Terms apply.
  • See additional Credit One Bank® Unsecured Visa® Credit Card details
 APPLY NOW

at Credit One Bank's
secure site

Credit Needed
Bad Credit
  • Purchases Intro APR
    N/A
    Balance Transfers Intro APR
    N/A
    Regular APR
    16.99% - 24.99% Variable
    Annual Fee
    $0 - $99
    Credit Needed
    Bad Credit
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Taking out a Credit Card and Other Tips for Building Credit

OK, so your credit isn’t its best.

Maybe you don’t have much experience with paying bills, or perhaps you’ve had a couple of late payments. Well, we’ve got your back.

It may seem counterintuitive, but the best and fastest way to firm up that sagging credit is with a credit card. That’s right. Believe it or not, with the right credit card, you can improve your credit in a few short months. The trick is to know how.

We’ll tell you what you need to know and how to do it so that there aren’t any surprises along the way. But first…

What is a bad credit score?

The score you’ll need to pay the most attention to is the FICO, the scoring model most used by lenders.

This score’s scale is 300-850, with 850 as the best. To get a good or excellent rating, you’ll want to shoot for at least 700. Below that and you’ll be offered higher interest rates and other not-amazing financial products. (More on that later.)

That’s the bad news. The good news is that it takes a few short months of good consumer behavior to improve your score. But beware: Once you’re on the path to good financial habits, you’ll want to keep it up, because one misstep can drop your score quickly, in fact considerably more quickly than when you were improving your credit.

Why should I care about my credit score?

If you are a recent graduate or you are accustomed to paying bills with cash or checks, it’s easy to ask why you should care about your credit score.

The truth is even if you plan to live off the grid the rest of your life on Montana farmland you own free and clear, credit matters. That’s because it isn’t only lenders who keep an eye on your credit. Landlords, utility companies, even employers, check your credit. They want to make sure you’ll pay on time and that you are reliable.

And remember that Montana farmland? You need auto insurance to drive to town for propane and supplies, right? Well, insurance companies look at a specific scoring model to decide what rate to charge you.

The higher the score, the nicer your apartment, the better your job, the lower your insurance payment, the better your auto loan’s interest rate – you get the picture. And you can save hundreds a year because of that great credit score.

How do I improve my credit?

Not sure where to start on how to improve your credit? It’s easier than you think.

The easiest and fastest way to build your credit is with a credit card. It has to do with how the FICO model is set up. That may strike fear in your heart if you’ve had a bad run with your finances. But breathe deeply and repeat this mantra: Pay on time and in full each month.

But first things first.

Right away, you’ll want to check your credit reports. Three major credit bureaus – Equifax, Experian and TransUnion – receive data on you from a variety of sources, primarily lenders. You can check each report for free once a year at AnnualCreditReport.com. Plan to pull one of the three every four months. Pull your first one today.

Each report have a little different format, but the information is basically the same – your personal information, whether you are paying on time and which accounts you hold. Check for inaccuracies or accounts you don’t recognize. Contact the credit bureau with any issues, and clear up with the lenders any outstanding charges.

So, why do the credit reports matter? FICO uses them to assess your score. Actually, if you are regularly checking your credit reports and all is well, it isn’t necessary to frequently check your credit score.

CreditCards.com offers a free score.

Finally, you’ll want to start looking at cards. We’ll talk in more detail about what to look for later, but suffice it to say that you need to keep in mind that your new financial product is for building credit ONLY, not a long-term loan. With that in mind, plan to make one small charge on your card each month to keep the account active, and pay in full and on time. Within a few short months your credit will improve.

What has the most effect on your credit score?

The most valuable aspect of the FICO scoring model, the model most used by lenders, is payment history, making up 35% of your score. That’s why it’s so important that you pay your bills on time each month. Here are the 5 main parts of your FICO score:

  • Payment history – 35%. Pay on time each and every month!
  • Amounts owed – 30%. The second most important part of your score, this is why you want to pay your credit cards in full each month. That keeps your utilization ratio as close to 0% as possible. The utilization ratio is how much you owe by how much credit you have available. So, if you have $1,000 credit available and you owe $100, your ratio is at 10%. You want the ratio to be as low as possible.
  • Length of credit history – 15%. To a lesser extent, how long accounts have been open plays a role on your credit. FICO loves it when you have decade-old accounts with good paying habits.
  • New credit – 10%. Every time you apply for a credit card, the credit bureaus know. And if you apply for multiple cards in a short amount of time or just before you take out a loan, creditors start to wonder if you are desperate for cash. That’s why you should do your research on a card before applying, making sure you have the credit score to get it.
  • Credit mix – 10%. FICO likes it when you have different types of credit, maybe a credit card (called revolving credit) and an auto loan or mortgage (called an installment loan). That’s not to say that you should apply for an installment loan in your bid for good credit if you can’t afford it – good credit habits and a credit card should do the trick.

What is the difference between a prepaid and a debit card?

A prepaid card acts like a credit card, but you “load” money in it periodically for spending purposes, so it isn’t truly a credit card, which lends you the money for charges. A debit card is a card attached to an account with cash in it. Neither the prepaid card nor the debit card helps your credit. For that you need a credit card.

There’s one type of credit card that is relatively easy to get, and can help you build your credit – the secured card. With this card, you pay a deposit and have a credit limit equal to the deposit, typically a small amount, such as $200.

Do prepaid cards help build credit?

Prepaid cards are not credit cards, and they don’t help you build credit. If you want to build credit, a secured credit card is a good start. Here’s how it works: You pay a refundable deposit of say, $200, and you basically borrow off of the amount. Just make sure you put a small charge on the card each month to keep the account open and active. And of course, pay in full and on time so that you take full advantage of your credit building. Also, make sure the card issuer reports to all three major credit bureaus, and research fees, because there can be some hidden ones.

Can you build up your credit with a debit card?

A debit card, which is attached to a bank account, cannot be used for building credit. Instead, consider a secured credit card.

With the secured card, you pay a refundable deposit in exchange for the ability to draw that amount for charges. This is an excellent way to build credit, provided you maintain good financial habits and the card issuer is reporting those habits to all three major credit bureaus.

Research thoroughly, because they can vary. There is even one secured card that pays you cash back, although that is of limited value while you are building credit, because you want to keep your charges as low as possible so that your credit utilization ratio remains as close to 0% as possible.

The credit utilization ratio is your balance compared to your available credit. So, if you have $200 in available credit and you owe $20, your ratio is 10%. This ratio makes up 30% of your FICO score.

What is the difference between a secured and an unsecured credit card?

A secured card requires a deposit that you borrow off of. An unsecured card provides you with a credit limit based on your credit score – the higher the score and income, the higher the limit typically is.

Secured cards are almost entirely for credit building. They have few other features, although a couple have no annual fee, one gives you access to a higher credit limit for good credit habits, and one works with you to transition up to a better card after several months. Another allows you to pre-apply without impacting your credit score.

Unsecured cards have a multitude of features, from cash back to travel benefits to gas and shopping rewards. You usually need a higher credit limit for those kinds of cards, but there are exceptions, so do your research. There is the occasional unsecured card for credit building, but while your score is low, the annual fee can be up to $99.

While an unsecured rewards card can save you hundreds of dollars a year, they require some willpower and the ability to budget and manage your credit card accounts. You don’t want to get a card, borrow off of it and carry the balance month to month because you can’t afford to pay the bill in full. Make sure you have good credit habits before taking out a rewards card.

Do secured credit cards help your credit score?

Secured credit cards are an excellent way to build your credit score when it’s not at its best. That said, beware of fees and make sure the card issuer will report your credit habits to all three major credit bureaus.

Here’s how a secured card works: You pay a refundable deposit that you will be borrowing off of. Make sure you pay in full and on time each month and put a small charge on the card each month to keep the account open and active.

There aren’t many special benefits on a secured card, but if you build your credit over the course of a year, you should be able to get a rewards card once your FICO score is over 700.

Do bank accounts affect your credit score?

Technically bank accounts don’t affect your credit score, because they don’t report to the three major credit bureaus.

However, your score can be impacted if you fail to pay fees and the financial institution sells your debt to a collection agency. If that happens, pay the bill immediately and ask the collection agency to inform the credit bureaus that you have done so.

Also, many financial institutions report to ChexSystems any negative information about your bank account. In most cases, you’ll need a clear report to open a new checking account. Heads up that banks also sometimes check your credit score before you open an account.

Do credit unions help you build credit?

While your checking account with your credit union won’t help you build credit, credit unions can help you build credit in a number of other ways:

  • You might be able to get a secured credit card, which gives you a credit limit based on a refundable deposit you pay. If the card issuer reports to the three major credit bureaus, you will be able to build credit by paying in full and on time each month.
  • Some credit unions offer credit builder loans. With an unsecured (meaning no collateral is needed) credit builder loan you can pay a lump sum upfront that can be used for a car repair, new appliance or medical expense, according to CreditCard.com’s Allie Johnson. Another type, which freezes the loan proceeds until the total amount has been paid off, forces you to save.
  • Because FICO likes it when you have a variety of credit types, you might consider taking out a car loan with your credit union. The interest rates are usually more favorable, and it will give you access to an installment loan, which is different from a credit card, which has revolving credit.

How do you get a credit card with bad credit?

If you have bad, thin or no credit, don’t despair.

There is a card for pretty much every circumstance, from great credit to none. You just need to make sure you apply for the right card for your credit.

Check your credit at MyFICO.com for about $20. If your score is below 700 out of a scale of 300-850, then look at fair or average credit cards. There are a few fair credit cards with cashback benefits, if you are looking for that. Anything below 650, and you’ll want to look at credit cards for bad or no credit.

Choose your card carefully, checking for fees and making sure the card issuer reports to all three major credit bureaus. Don’t apply for multiple cards in rapid succession, because that can drive down your credit score even further.

How do credit inquiries affect your credit score?

All credit inquiries are not created equal.

There are “hard pulls,” which is when a creditor checks your credit, and they can affect your credit temporarily. “Soft pulls” do not.

If you are applying for a car loan or a mortgage, you can have up to 3 pulls within a certain amount of time, usually 30 days, without an impact to your credit. That’s because the credit bureaus recognize that you may want to shop for a better interest rate.

However, if you are applying for a credit card, you do not want to apply for multiple cards at once, because that most certainly will affect your credit. Instead, do your research and choose carefully, based on your current credit score and the details of the card, including fees.

How do I clear my bad credit history?

You can’t “clear” your bad credit history, but you can build good habits that improve your credit score.

Let’s say you were late on a couple of bills or you had an emergency medical procedure that you haven’t paid off. You may now have a bad credit history, and you’ll want to do something about that.

First things first: Check your credit report at AnnualCreditReport.com for free. Look for errors, such as inaccurate personal information or accounts you don’t recognize. Get the credit bureaus to correct the errors as soon as possible.

Also look for negative issues, such as unpaid bills. Pay the bills immediately and ask the creditor to send the updated information to the credit bureaus. This negative activity will remain on your account for several years, but the older it is, the less important it is to your credit. If you begin to always pay on time and in full, your credit will improve in no time.

Finally, taking out a credit card is the fastest and easiest way to improve your credit. You will probably need to take out a secured credit card. Just make a small charge each month and pay it off on time, and your score will improve within months.

How to use a credit card wisely

There are a few rules to responsible card use. To use your credit card wisely, do this:

  • Don’t take out a credit card with an annual fee unless you need it to build credit or you are planning to maximize points or benefits.
  • Never carry a balance from month to month. Credit cards are not for long-term loans. Interest rates on credit cards average 15% APR, which means if you carry $500 on your card, it will take you 24 months to pay the minimum amount and you will pay $78.98 in interest.
  • If you are building credit, put a small charge on your card each month to keep the account active and open, and pay in full and on time.
  • Once you have built your credit to at least a FICO score of 700, only take out a rewards card if you have a working budget and you feel you can accurately track your charges and payments.

What is a good credit utilization ratio?

A good credit utilization ratio is as close to 0% as possible.

Credit utilization is your credit card balance by your available credit. So, if you have $1,000 in available credit, and you owe $300, then your credit utilization ratio is 30%. Some experts say you should try to keep your ratio under 30 percent, but the truth is, there is no hard and fast rule about this.

FICO doesn’t require a certain ratio; instead, it just wants the ratio to be a low as possible. That’s why it’s important to pay in full each month. In fact, some consumers pay in full multiple times a month, since you don’t know when during the month the card issuer will send your information to the credit bureaus.

How long does it take to build your credit?

In a few short months you can build your credit. The trick is to be diligent about paying in full and on time.

You want to shoot for a FICO score of at least 700 out of a scale of 300-850, with 850 as the best. FICO is the scoring model most used by lenders.

To achieve that score, take out a credit report every four months from AnnualCreditReport.com and check for errors or any missed payments. Have errors corrected and pay any outstanding bills you have.

With a secured credit card, and consistent, monthly payments, your credit will improve in no time. Check your score at the beginning of your journey and again in about a year. You can check for about $20 at MyFICO.com.

Is it bad to cancel credit cards?

Canceling a credit card is not necessarily a bad thing, but you want to do it for the right reasons.

Here’s the deal: FICO looks at how long your credit accounts have been active. The longer they’ve been in place (and well-cared for), the better. For that reason alone, you don’t want to cancel your card. Length of credit history makes up 15% of your FICO score.

Another reason to keep that card: The available credit on the card adds to the available credit of your other cards, allowing you to have a higher balance and still have a good utilization ratio, which is 30% of your FICO score.

Also, if it’s your only credit card, and you are handling it responsibly, it will continue to boost your credit score because it improves your credit mix, which is 10% of your FICO score.

However, if you are paying an annual fee, and there is no reason for that card (for example, you don’t use the card’s travel benefits and you have a very low utilization ratio), you might consider canceling. The good habits of that card’s use will remain on your credit reports for 10 years.