Best Credit Cards for Bad Credit

Jason Steele

Updated June 10, 2022

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

People with bad credit may think that getting approved for a credit card is out of their reach. Fortunately, there are credit cards that are available to those with bad credit. Since using a credit card responsibly can actually help to improve your credit score, getting a card may be something that people with bad credit should consider, even if it seems challenging.To choose the best cards for bad credit, we looked for issuers that are marketing their cards to those who have bad credit. We then looked for certain features that could potentially help improve your credit score even further, opportunities to increase your credit limit, reporting to all three credit bureaus, and no or low annual fees. Most cards for bad credit do not have many rewards or benefits, but there are a select few that do.

How We Chose the Best Credit Cards for Bad Credit

To find the best credit cards for bad credit, we first divided the market into the following six categories:

Rewards credit cards for bad credit
Credit cards for bad credit issued by a major retail bank
Credit cards for bad credit for international travel
Cards for bad credit with low APRs
Credit cards with no credit check
Credit cards that automatically raise your credit line

Then we looked at more than a dozen major card issuers and credit unions to find the best cards in each of these six categories. We included only cards that anyone can be considered for, leaving out products offered by credit unions that not everyone can join. And for each category, we looked at the most relevant factors. For example, the top cards for bad credit for international travel should have no foreign transaction fees. Meanwhile, the best cards that automatically raise your credit line should allow for a credit line increase without requiring an additional security deposit. While credit card terms may change from time to time, the following rankings reflect information that was accurate in May 2022. Recommended: Credit Card Terminology, Explained

How Secured Cards Work

There are two types of credit cards for bad credit, secured cards and unsecured cards. Secured cards require a security deposit, while unsecured cards do not.Any unsecured card for people with bad credit will probably charge extraordinarily high fees and interest rates. Because of the high risk of loaning money to people with a history of major credit problems, it’s not uncommon for these cards to charge annual fees and other fees of more than $100 per year and have interest rates that are at least double the national average. Secured cards, however, rarely have excessive fees and ultra-high interest rates. And many secured cards now have no annual fee. Instead, these cards require customers to submit a refundable security deposit when they open the account.Otherwise, secured cards work just like standard credit cards. You still have to make a payment each month, and your security deposit is only used if you default on your debt. The secured credit cards typically look just like any other credit cards. So when you use your secured card, no one will know that it’s not a standard, unsecured card. What’s more, after a year of responsible use and on-time bill payments, many secured card users find that their credit has improved enough to qualify for a standard, unsecured card. If your secured card issuer also offers unsecured cards, you may receive a refund of your security payment when you get the new card. Otherwise, you can apply for an unsecured card from another issuer, and close your secured card account. Either way, you’re always entitled to a refund of your security payment when you’ve paid off your balance and closed your account. Since unsecured cards for people with bad credit generally charge large, non-refundable fees, it makes more sense to get a secured card instead. Although the deposit may be a little larger than the fees, at least you’ll receive the deposit back when you close your account. That’s why all of our top cards for people with bad credit are secured cards.

Best Credit Card for Bad Credit and Rewards

The majority of credit cards available to applicants with bad credit don’t offer rewards. However, there are a few that do. When looking at rewards cards for bad credit, it’s important to find a card that offers opportunities to earn cash-back rewards for purchases that you frequently make.

If You Want a Card for Bad Credit With Rewards: Discover it® Secured Credit Card

The Discover it Secured card offers good rewards for those with bad credit. The card earns an impressive 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and an unlimited 1% cash back on all other purchases. During your first year as a cardholder, the card’s Cashback Match feature automatically matches an unlimited dollar-for-dollar of all the cash back you've earned at the end of your first year.The card has a refundable security deposit starting at $200. After eight months, you may automatically qualify to convert to an unsecured card and get your deposit back. There is a 10.99% introductory APR offer for six months for balance transfers that post to your account by September 10, 2022. After that, the standard 23.74% APR applies. There’s no annual fee for this card.

Pros:

The card provides a good opportunity for rewards.
The first year is especially valuable, with dollar-for-dollar matching.
You’re eligible to convert to an unsecured card after eight months of responsible use.

Cons:

The card requires a security deposit.
The standard APR is on the high side.
Rewards earnings have a cap.

Best Credit Cards for Bad Credit From a Major Retail Bank

Holding a credit card from a major retail bank can be appealing to those with bad credit or people who have had issues with online banks or credit cards in the past. When your credit card is connected to a major retail bank, you can connect directly to your checking or savings account, and you can go to a physical location if a problem arises.

If You Want a Card for Bad Credit From a Major Retail Bank: BankAmericard® Secured

If you want a card from a major retail bank but have bad credit, the BankAmericard Secured Credit Card is a solid option. The card requires a refundable security deposit between $300 and $4,900. Your maximum credit limit will be determined by the amount of the security deposit you provide, your income, and your ability to pay the credit line established. Bank of America will periodically review your account to see if you qualify to have your security deposit returned. There is a standard APR of 23.74%. This card doesn't have an annual fee.

Pros:

The card has no annual fee.
The security deposit is refundable.
It’s offered by Bank of America.

Cons:

The minimum deposit is $300.
There’s no intro APR offer.
The card offers no rewards.

Best Credit Cards for Bad Credit for International Travel

People with bad credit may like or need to travel internationally. If so, it’s important to have a credit card that offers valuable benefits for international travel and no foreign transaction fees.

If You Want a Card for Bad Credit for International Travel: Capital One Platinum Secured Credit Card

The Capital One Platinum Secured Credit Card is one of the few cards without foreign transaction fees that is available to applicants with bad credit. Plus, the card requires only a $49, $99 or $200 refundable minimum security deposit. Access to an authorized bank account is also required to make your security deposit. Once you make the minimum required security deposit, you get an initial credit line of $200. If you deposit more money before your account opens, you can get a higher credit line. Cardholders can also be automatically considered for a higher credit line in as little as six months. This card has a 26.99% variable APR. Capital One offers international travelers emergency card replacement, and there are no annual fees with this card. And unlike most cards for people with bad credit, there are also no foreign transaction fees imposed on charges processed outside the United States.

Pros:

There are no foreign transaction fees.
The card asks for a low security deposit.
You’re automatically considered for a higher credit line in as little as six months.

Cons:

The card has a high APR.
There are few benefits.
The initial credit line is only $200.

Best Credit Cards for Bad Credit With Low APR

Many credit cards for bad credit have high APRs, which can really start to add on to your debt if you need to carry a balance. To find the top credit cards for bad credit with low APR, we looked for a rate that’s lower than average for this kind of credit card.

If You Want a Card for Bad Credit With Low APR: First Progress Platinum Prestige Mastercard® Secured Credit Card

The First Progress Platinum Prestige Mastercard® Secured Credit Card offers a low variable APR to those with bad credit. The card has a 10.74% variable APR, which is a great rate for any card, not just one for people with bad credit. Plus, a credit history or minimum credit score is not required for approval, making this a good option for those with bad credit. A refundable deposit of between $200 and $2,000 is required and becomes your credit limit. If you pay off your balance, you can receive your deposit back at any time. There is a $49 annual fee for this card.

Pros:

The card has a low APR.
No credit history or minimum credit score is needed.
Your deposit and credit line can go as high as $2,000.

Cons:

The card has an annual fee.
It offers few rewards.
There’s no introductory APR offer.

Best Credit Cards for Bad Credit With No Credit Check

Having bad credit can make it difficult and intimidating to get approved for a credit card that involves a credit check. If you want a credit card to build credit but are having trouble getting approved for one, a credit card that doesn't require a credit check may be a good option for you.

If You Want a Card for Bad Credit With No Credit Check: OpenSky® Secured Visa® Credit Card

The OpenSky® Secured Visa® Credit Card doesn’t require a credit check when you apply, which can be helpful for those with bad or no credit. This card also doesn’t require you to have a bank account. With this card, you can choose your credit line with a one-time refundable deposit, starting at $200. The card reports to all three major credit bureaus, which can also help improve your credit. There is a 17.64% variable APR. The card has an annual fee of $35.

Pros:

There’s no credit check to get this card.
No bank account is required.
The annual fee is relatively low.

Cons:

There is an annual fee.
The card offers few rewards.
There’s no introductory APR.

Best Credit Cards That Automatically Raise Your Credit Line

Increasing your credit limit may positively impact your credit score. While most cards available to applicants with bad credit have a low starting credit limit, if you use the card responsibly, some will automatically increase your credit limit without requiring an additional deposit.

If You Want a Card That Automatically Raises Your Credit Line: Merrick Bank Double Your Line® Secured Visa®

The Merrick Bank Double Your Line Secured Visa card is a great card if you want to easily raise your credit limit. The initial deposit of $200 becomes your credit line. Your credit line can be doubled to $400 without another deposit if you make at least your minimum payment on time each month for the first seven months your account is open. There’s a standard rate APR of 17.70%, based on creditworthiness. The card reports to all three major credit bureaus. There is an annual fee of $36, billed $3 per month after the first year.

Pros:

The card increases your credit line in a few months if you use it responsibly.
It reports to all three major credit bureaus.
The annual fee is relatively low.

Cons:

The card has an annual fee.
There are few additional benefits.
The initial deposit and initial credit line are limited to only $200.

The Takeaway

Credit cards may not be for everyone with bad credit, but they can help improve your credit score if you use them responsibly. Paying your bill on time and avoiding debt are the best things you can do to strengthen your credit history. If you think you’re ready for a credit card but have bad credit, there are good cards out there that you can qualify for.When you’re looking for credit cards, Lantern by SoFi can help with multiple offers from our network of lending partners.

Photo credit: iStock/damircudicDisclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (https://www.consumer.ftc.gov/topics/credit-and-loans)The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.SOLC0921194

About the Author

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.

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