Getting a credit card with bad credit: Everything you need to know

Advertiser Disclosure: Content provided by www.redventures.com. Fox Business and its content partners earn compensation from the affiliate companies that appear below. This content does not include all available financial offers, and compensation may impact how and where links appear in the content.

Having bad credit can make it hard to get approved for loans, credit cards, apartments, and even some jobs.

The good news? There are options for getting a credit card even if your credit score is low. The less-good news? It may take a bit more work to find the right one.

While you may not get approved for the best card out there, opening one is still a smart idea. Opening a credit card is the first step toward rebuilding and improving your credit over time.

Here’s how to do it.

What’s considered a bad credit score?

Your credit score plays a significant role in whether you’ll get approved for a credit card and what your interest rate will be. The most commonly used credit scoring model, FICO, ranges from 300 to 850.

• 800-850: Excellent
• 740-799: Very good
• 670-739: Good
• 580-669: Fair
• Under 579: Poor

Before applying for a credit card, it’s crucial to get an idea of your credit score. You can often check your credit score for free by logging into your bank or credit card issuer’s website. You can also request a free copy of your credit report from annualcreditreport.com.

How a bad credit score can affect you

A FICO score below 580 is generally considered poor — or bad — credit. If you have a poor credit score, you'll have limited options for credit cards and may have to accept less favorable terms like high interest rates, low credit limits, and fees.

Consequences of poor credit include:

• Higher interest rates on loans and credit cards
• Lower credit limits
• Difficulty getting approved for financing
• Paying more for insurance
• Trouble renting apartments
• Paying fees and deposits for utilities

Improving your credit score can help avoid these issues, widen your options, and save you money over the long run.

What credit cards can I get with bad credit?

If your score falls in the fair credit range or lower, you'll have a more challenging time qualifying for the best travel credit cards or premium rewards cards.

While your options will be more limited, there are still some credit cards you can qualify for. This includes:

• Secured cards require an upfront cash deposit, which acts as your credit limit. That deposit makes these cards easier to qualify for. Your payment history will get reported to the major credit bureaus, like any other card, which can help build your score.
• Subprime unsecured cards are available to borrowers with fair or poor credit. These cards don't require a deposit but may have different lending criteria, often focused on your income and existing debts. Some may not ask for your credit score at all.
• Student cards are designed for college students who are often new to credit. These starter cards help students establish payment history while managing small monthly balances — vital for credit building. Remember, you must be enrolled in a school to get approved.
• Store credit cards can often only be used at a specific merchant or retailer. These cards are often easier to qualify for but have higher interest rates and limited rewards.

The best credit cards to get with bad credit

Whether you have poor credit — or no credit history — there are some card options for you. Here are the best credit cards for those with bad credit.

Capital One Platinum Credit Card

This basic, no-frills card is one of the best cards for rebuilding credit. It requires fair or good credit for approval and doesn't charge an annual fee. Benefits include credit limit increase reviews and access to tools that track your credit score.

OpenSky® Secured Visa® Credit Card

This secured card doesn’t require a credit check, making it possible to get it if you don’t have a score. Benefits include a lower-than-average variable APR, higher credit limits, and the ability to graduate to an unsecured card after making consistent on-time payments.

Chime Credit Builder Secured Visa® Credit Card

This card also has no credit check, comes with low fees, and has one of the highest potential credit limits compared to other secured cards. Keep in mind that you must maintain a Chime Checking Account alongside your linked bank account.

Petal 2® "Cash Back, No Fees" Visa® Credit Card

This unsecured card offers cash back on eligible purchases and reports on-time payments to the major credit bureaus. Other benefits include no annual fees or late fees, with potential credit limit increases over time.

Capital One Quicksilver Secured Cash Rewards Credit Card

This is another secured card that comes with a cash back program. You’ll earn 1.5% on all purchases and 5% back on hotels and rental cars booked through Capital One Travel. This card charges no annual fee, and you’ll need a minimum security deposit of just $200 to open an account.

How to apply for a credit card with bad credit

Here are some steps to help you apply for a credit card when you have less-than-ideal credit.

1. Check your credit report. The first step is to check your credit reports from Equifax, Experian, and TransUnion. Reviewing your reports helps you understand where you stand — and can help you identify any errors you need to dispute.
2. Compare potential card offers. Next, research which credit card companies offer subprime cards. Compare interest rates, fees, credit limits, and other terms to find your top picks. Target issuers most likely to approve you based on your credit score.
3. Prepare your documents. Be ready to provide income verification documents, like recent pay stubs, when you submit your application.
4. Complete and submit your application. Only apply for one or two cards simultaneously — too many applications can hurt your score.
5. Accept the best offer. Once approved, thoroughly review the terms and conditions to ensure it’s the right card for you.
6. Use your card smartly. This includes keeping your credit utilization under 30%, paying balances in full and on time every month, and reviewing your statements for errors. The right credit card combined with responsible use provides a path to rebuild credit over time.

If you don’t have a credit score

Getting approved for credit with no credit history at all is very difficult. Without a track record of previous borrowing and repayments, card issuers can't assess how creditworthy you may be.

Your best option is often to apply for a secured credit card, which requires an upfront refundable deposit. After six months of consistent on-time payments with a secured card, you can often qualify for unsecured cards.

There are also credit cards designed for those with no credit history, like the Petal 2® "Cash Back, No Fees" Visa® Credit Card, which doesn’t require a credit check to get approved.

How to increase your chances of approval for a credit card

Here are some general tips to keep in mind.

• Check your credit report and dispute any errors you find — getting inaccuracies removed can help boost your score.
• Many card issuers review your income alongside your credit score — showing proof of employment or cash flow can help boost your odds.
• Pay down existing debt balances on credit cards and loans. This can help improve your credit utilization ratio, which makes up a sizable portion of your credit score.
• Avoid applying for multiple cards, as too many inquiries may result in denials and can affect your credit score.
• Consider adding your rent payment history to your credit report, if possible. This helps establish a positive payment history.
• Apply for a secured card if you don’t qualify for an unsecured card, which is often easier to qualify for and can help you build your score.

How to rebuild your credit score with a credit card

Once you’re approved for a card, it’s essential that you use this card responsibly. That way, you can start building your score.

The most important thing to do is to pay your credit card bill on time each month. Making regular, on-time payments is the best way to increase your score. Ideally, you should be paying it off in full, but making at least the minimum payment will help you avoid late fees and penalties.

Keep in mind that if you carry a balance, you’ll have to pay interest on the unpaid amount. Credit cards charge high interest rates, which can add up quickly. Carrying a balance can also hurt your credit utilization ratio, a measure of how much of your available credit you’re using. The higher this ratio, the worse it is for your credit score.

You’ll want to avoid behaviors that would further damage your credit, like:

• Making late payments
• Going over your credit limit
• Closing unused cards soon after opening them
• Applying for more credit too often

Give yourself at least six months of responsible use before applying for another card. As your score improves, consider requesting a credit limit increase, which can help reduce your credit utilization ratio and improve your score.

The bottom line

A bad credit score doesn’t have to hold you back forever — with the right credit card and smart money habits, you can start building your score.

Compare all of your options to find the best card for you. It may take some time to build your score, but the effort is well worth being able to qualify for premium cards and loans with favorable terms down the road.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.