Best Overall, Best for Cash Back: Discover it® SecuredRating Among Cards for Bad Credit Show
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
Why We Chose This Card The Discover it Secured card is our choice for the best overall credit card for those with bad credit as well as the best option for cash-back rewards. It charges no annual fee and even offers an introductory offer on balance transfers in case you're paying high interest on another credit card. While not low, the long-term interest rate is more consumer-friendly than most cards aimed at the lower end of the credit score spectrum. Discover will also automatically review your account after eight months of responsible use for possible upgrade to an unsecured card. With Cashback Match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically. Pros and Cons Pros
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Best for Students New to Credit: Discover it® Student Cash BackRating Among Cards for Bad Credit 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 Fair - Excellent
Why We Chose This Card We chose the Discover it Student Cash Back as the best card option for students just starting out with credit who haven't had an opportunity to establish a credit history while in college. With excellent acceptance, no annual fee, and relatively low interest rates, it's a natural fit for the student market. Plus, in addition to helping build credit, the Discover it Student Cash Back card allows students to earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Earn 1% cash back on all other spending. Pros and Cons Pros
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Best for Reasonable APR and $0 Fees: nRewards® Secured Credit CardRating Among Cards for Bad Credit
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
Why We Chose This Card The Navy Federal credit card is designed for those looking to rebuild their credit as well as new credit card users and those looking to establish their credit. The card has no annual fee but also no rewards program. This card is a great option for Navy Federal members with no credit or bad credit. Pros and Cons Pros
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Best Account Features: BankAmericard Secured Credit CardRating Among Cards for Bad Credit 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
Why We Chose This Card The purpose of the BankAmericard Secured Credit Card is to help you rebuild, establish, or strengthen your credit. It comes with no annual fee and a free FICO score. This card has a relatively high minimum deposit requirement of $300 which is required to open the account. However, based on your overall credit history, you may be able to qualify to have your deposit returned. Be aware that not all customers will qualify. Pros and Cons Pros
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Best Unsecured: Capital One Platinum Credit CardRating Among Cards for Bad Credit 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
Why We Chose This Card We chose the Capital One Platinum Mastercard as the best unsecured option for credit-impaired applicants because it has very low fees and reasonable interest relative to the competition. There is no rewards program but also no annual fee or foreign transaction fees. There is, however, a high interest rate. If you pay off your balances in a timely manner, the Capital One Platinum is a solid option for building credit and, with consistently responsible use, can be a gateway to a broad array of reward-card options from Capital One once credit scores improve. On Capital One's website, they list this card as being for "fair" credit, but that is defined by Capital One as those with a limited credit history or a loan default in the last five years, which meets many lenders' definition of bad credit. Pros and Cons Pros
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Final VerdictEven if you have bad credit, you still have access to a selection of credit credits. The credit cards on this list are made for people who want to repair their bad credit or establish credit in the first place. The Discover it Secured is our top pick for the best credit card for bad credit and the best credit card for cash back. It wins because it has no annual fee, outstanding rewards for a secured credit card, and the potential to upgrade to an unsecured card if you meet eligibility criteria after a period of responsible usage. The Discover it Student Cash Back card is another great option that is specifically designed for students who want to start building their credit. Compare the Best Credit Cards for Bad CreditEditorial Picks for Best Credit Cards for Bad CreditDiscover It SecuredBest Overall, Best for Cash Back Discover it Secured is our top choice for those looking to repair their credit. It comes with no annual fee, an excellent rewards program, and the possibility of upgrading to an unsecured card. (Read the Full Discover it Secured Review.) Discover It Student Cash BackBest for Students Those who are just starting out on their credit journey should check out the Discover it Student Cash Back card. With excellent acceptance, no annual fee, and relatively low interest rates, it’s a great fit for the student market. (Read the Full Discover it Student Cash Back Review.) nRewards Secured Credit CardReasonable APR, $0 Fees A solid secured credit card for members of the Navy Federal Credit Union who are looking to build or repair their credit. This card offers low fees and a reasonable long-term APR to help you stay on track. BankAmericard Secured Credit CardAccount Features BankAmericard Secured Credit Card is a secured card with no annual fee and access to free FICO scores. While it doesn’t offer a rewards program or bonus, it does provide an automatic review that allows some cardholders to retrieve their security deposit. (Read the Full BankAmericard Secured Credit Card Review.) Capital One Platinum Credit CardUnsecured An unsecured card with no annual fee, no foreign transaction fees, and no penalty APRs. The Capital One Platinum Credit Card also offers an automatic credit line review to be eligible for a higher credit limit in as little as six months. (Read the Full Capital One Platinum Credit Card Review. ) What to Look for in a Credit Card for Bad CreditWhile credit cards designed for people with poor or bad credit generally don’t come with the same generous terms as those for lower-risk consumers, there are still some critical features to look for when reviewing options and choosing one to apply for.
Bad credit is generally defined in terms of a person’s credit score. The most widely used credit score is the FICO score. FICO scores range between 300 and 850. Bad credit is generally considered anything at 579 or lower. Fair credit is 580 to 669. Bad credit is often caused by things like failing to pay your bills on time or defaulting on a loan. Having bad credit can make it more difficult to get a credit card or obtain a loan. How Many People Have Bad Credit?As mentioned above, FICO credit scores range between 300 and 850. According to the credit bureau Experian, in 2021 about 16% of Americans had what FICO classifies as very poor credit (a score under 580), while another 17% had fair or subprime credit (a score between 580 and 669). The full distribution of how Americans fall into the score ranges is below:
If Your Application Is DeclinedYour credit card application can be denied for a number of reasons. For instance, if you have too much debt, if you have no or limited credit history, or if your credit score is too low to qualify you for that particular card. If you apply for a credit card and your application is denied, there are a few things you can do:
How to Improve Your Credit Score Using a Credit CardThere are several ways you can use a credit card to improve your credit score, including:
How Long Does It Take to Rebuild Credit? Correcting
errors on your credit report can pay off within a matter of months. Other credit behaviors, like paying your bills on time, can take longer to improve your score. What’s more, some aspects of your credit history, such as any bankruptcies or charge-offs, can take up to a decade to disappear from your report. According to
Experian, the following actions can have an impact on credit scores in these general time frames.
Special ConsiderationsCard issuers never promise to approve anyone’s application, regardless of their credit score. That said, issuers have designed card products for different segments of the market, and that includes the subprime market for people with bad (or no) credit. As mentioned above, secured cards can be a good place to start if you have some cash to deposit with the card issuer. These cards typically report to all three major credit bureaus, which can help you build a solid credit history. Another option, which doesn’t require a security deposit, is to apply for one or more store credit cards from national retailers like Sears, Target, Kohl’s, or Best Buy. These types of cards can only be used with those respective retailers, unlike cards issued by banks that carry the Visa or Mastercard logo or that are issued directly through Discover or American Express, which can be used anywhere that accepts those credit cards. Store credit cards should only be considered a stepping stone to build credit, however, as they tend to have very small credit lines and charge high interest rates. While there are numerous unsecured Visa and Mastercard options targeting people with bad credit, they can be a needlessly expensive option. These types of cards tend to have limited credit lines, very high interest rates, and numerous fees. The Credit Card Accountability, Responsibility, and Disclosure Act of 2009, also known as the CARD Act, sought to reign in these abusive products (sometimes referred to as “fee harvester” cards) by outlawing any annual fee that exceeds 25% of the credit line. However, issuers have gotten around that by exploiting a loophole that allows them to charge “processing” fees that are as bad or worse than the previously predatory annual fees. So, buyer beware with these types of subprime cards. As mentioned, secured cards from major issuers like Discover or Citi can be a much less expensive option until your credit score rises above the 600 mark and better, unsecured options become available to you. Another thing to think about is the ability to transfer balances with bad credit. Unfortunately, few, if any, credit cards designed for people with bad credit allow balance transfers, especially at interest rates that would prove advantageous. If you find one that does, it might make sense to transfer your balance if your current card is charging penalty rates of 36%, for example, and you can move the funds to a card that charges a rate in the mid-20% range. While that rate would still be high, it could save you money in interest charges (not accounting for likely transfer fees of 5%), if the new issuer can provide a large enough credit line to absorb the transfer. Before you consider a balance transfer, however, it would be worth contacting your current card issuer to see if you can simply negotiate a lower rate. What Causes Bad Credit?Bad credit can be caused by several factors, including:
How Do You Know You Have Bad Credit?The only way to know for sure whether you have bad credit is to check your credit score. There are free sources for checking your score online that only require the last four digits of your Social Security number. One indicator of bad credit is a FICO score between 300 to 579. This score is considered by FICO to be very poor. A score between 580 to 669 is considered to be fair. If you don’t know your current credit score, you can visit AnnualCreditReport.com for a free credit report. Checking your credit score won’t affect your credit. What Happens When You Have Bad Credit?Having bad credit means that you will have significantly less access to any type of credit, and any loans or credit cards you do qualify for will be much more expensive in terms of interest rates and fees. Other credit card features that are commonly offered to people with better credit, such as rewards and promotional APR offers, will likely not be available. Credit scores also serve as a proxy for trustworthiness in our society and are sometimes used by employers, landlords, cell phone providers, and insurance companies to determine how much of a risk you represent. They may set their prices accordingly or decline to do business with you altogether. How Can You Recover From Bad Credit?Regardless of how bad your credit is, there is almost always a path to move things in a better direction. Building a positive credit history can take time, but it is certainly possible with responsible credit behavior and some patience. Simply avoiding the behaviors that cause bad credit can go a long way. Other things you can do to recover from bad credit include:
Can I Still Get a Credit Card If I Have Bad Credit?Yes, you can still get a credit card if you have bad credit. While your credit card options will be more limited, there are still plenty of cards to choose from. Credit cards for bad credit are cards that are typically easy to qualify for and can be used to help you rebuild your credit. Some of the credit cards you can apply for if you have bad credit include:
MethodologyTo arrive at our list of best credit cards for bad credit, we filtered our list of nearly 300 credit cards for cards that consider applications from people with credit scores below 600. From this list, we then objectively chose the best cards in each subcategory based on their star ratings and feature quality. A weighted algorithm was used to determine which cards would be included in our final list. When choosing the best credit cards for bad credit we considered variables including the card fees, if it charged a reasonable interest rate, and if the card offered any rewards. We also looked into the card security and whether or not the card issuer provided solid customer service. Part of our methodology also included continuous monitoring of data for credit card issuers to ensure we provide the most up-to-date rankings. MEET OUR CREDIT CARDS EXPERTBen Woolsey is Investopedia's Associate Editorial Director of financial products and services, including credit cards. He has more than 30 years of experience in the financial services industry, including marketing for banking and financial institutions such as Associates First Capital and Bank One. Prior to Investopedia, he managed credit card content for CreditCards.com and Bankrate.com. What credit card should I get to fix my credit?Best Credit Cards for Bad Credit (November 2022): Capital One Platinum Secured Credit Card: Best for rebuilding credit. Mission Lane Visa® Credit Card: Best for low annual fee. Discover it® Secured Credit Card: Best secured card with rewards.
What is the fastest way to rebuild bad credit?7 Ways to Help Rebuild Credit. Review Your Credit Report. Your credit score is affected by a number of factors. ... . Pay Your Bills on Time. ... . Catch Up on Overdue Bills. ... . Become an Authorized User. ... . Consider a Secured Credit Card. ... . Keep Some of Your Credit Available. ... . Stay on Top of Your Progress.. What cards can help me build credit?Best Credit Cards to Build Credit of November 2022. Best overall. Capital One Platinum Credit Card.. Cash back rewards. Capital One QuicksilverOne Cash Rewards Credit Card.. Balance transfers. Discover it® Secured Credit Card.. Low APR. ... . Dining rewards. ... . Secured card with a low APR. ... . Secured card with a low deposit. ... . Students.. Can I get a credit card to fix my credit?There are two types of credit cards that you can get with a poor credit score: secured credit cards and unsecured credit cards for people with bad credit. Both types report account information to the major credit bureaus each month, which means either can help you rebuild your credit if used responsibly.
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