Best credit cards for bad credit in 2021

Everything you need to know about credit cards for bad credit

A bad credit score can be a result of insufficient credit history, past financial mistakes, a high debt balance or a combination of circumstances. Whatever the reason, a low credit score can prevent you from getting many credit cards. Credit cards for bad credit typically come with fewer qualification requirements, different fee structures and specific features to help your credit-building journey along. The key is to choose one that best fits where you are financially and where you want to go. Many cards for bad credit are secured, meaning they require an initial deposit that often serves as your credit limit, but they are otherwise similar to a traditional credit card. The more commonly-carried option, unsecured cards, are available for bad credit as well, but avoiding the initial deposit often leads to higher interest rates and unfortunate fees.

Personal finance experts at Bankrate have evaluated today’s best credit cards for bad credit and chosen the top options. We also offer tips on qualifying for a credit card and improving your credit score. Use this information to make the best choice for your financial future.

Compare Bankrate’s best cards for bad credit

A closer look at top credit cards for bad credit

Secured Mastercard® from Capital One

Best for rebuilding credit

• This card is a good fit for: Someone who wants a simple, minimal-fee path to a better credit score and isn’t concerned with earning rewards.
• This card is not a great choice for: Anyone who refuses to pay a security deposit or wants to earn cash back.
• What makes this card unique?The Secured Mastercard® from Capital One is one of the only secured cards with a deposit requirement that could be lower than your limit. This card also comes with an option to pay the opening deposit in installments over a 35-day period.
• Is the Secured Mastercard® from Capital One worth it? If your primary goal is to build credit, this card is an excellent choice. With an automatic credit line review after six months and a security deposit that’s lower than most annual fees, the Secured Mastercard® from Capital One is an affordable and efficient credit-building tool.

Read our Secured Mastercard® from Capital One review.
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Self – Credit Builder Account + Secured Visa® Credit Card

Best for building credit with savings

• This card is a good fit for: Someone whose goal is to build their savings along with their credit history.
• This card is not a great choice for: Those looking for a line of credit immediately. You won’t actually receive a credit card until you’ve saved $100 in your Credit Builder Account and made three on-time monthly payments in a row.
• What makes this card unique? This savings account and credit card combination is pretty unique on its own, but even more so because the process doesn’t require a hard inquiry on your credit report.
• Is the Self – Credit Builder Account + Secured Visa® Credit Card worth it? If saving money is part of your financial plan and you’re fine with waiting a few months to gain access to the credit card, the Self Visa is a viable option. The ability to have two lines of credit (the credit builder account, which is a loan, and a credit card) without a hard inquiry on your report is pretty remarkable.

Read our Self – Credit Builder Account + Secured Visa Credit Card review.
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OpenSky® Secured Visa® Credit Card

Best for credit educational support

• This card is a good fit for: Someone who wants to choose their own credit limit, which will be equal to the amount you provide as a security deposit (from as low as $200).
• This card is not a great choice for: Rewards seekers and those who want to avoid an annual fee.
• What makes this card unique? The OpenSky Secured Visa does not do a credit check or even require you to have a checking account, a lifeline for someone in a credit jam who is trying to get a credit card. Plus, they provide credit tips and a dedicated credit education page on their website to support your journey.
• Is the OpenSky® Secured Visa® Credit Card worth it? The ability to choose your own credit limit based on the security deposit you provide is useful. However, the fact that you have to pay an annual fee on top of a security deposit detracts from the card’s overall value.

Read our OpenSky® Secured Visa® Credit Card review.
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Credit One Bank® Platinum Visa® for Rebuilding Credit

Best unsecured credit card with rewards

• This card is a good fit for: Frugal spenders who want to earn rewards on the everyday essentials.
• This card is not a great choice for: Someone who wants to avoid an annual fee. It’s only $75 for the first year, but it’s $99 for each year after that.
• What makes this card unique? Purchases that are eligible for earning 1% cash back include gas, groceries, mobile phone, internet, cable TV and satellite TV services (terms apply).
• Is the Credit One Bank® Platinum Visa® for Rebuilding Credit worth it?If you’re not thrilled about the idea of fronting several hundred dollars for a security deposit, this card offers the tradeoff of a $75 annual fee for the first year, then $99. Plus, the opportunity to earn cash back on everyday purchases can help reduce the financial burden of the annual fee.

Read our Credit One Bank® Platinum Visa® for Rebuilding Credit review.
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Discover it® Secured Credit Card

Best secured card with rewards

• This card is a good fit for: Those who want to earn cash back and can put down a security deposit of as little as $200.
• This card is not a great choice for: Someone without a bank account, which is a requirement to apply.
• What makes this card unique? If you don’t have a robust credit history, finding a card that offers a substantial rewards program can be difficult. With the Discover it® Secured Credit Card, you’ll earn cash back in several useful categories, and Discover will match all of the cash back that you earned at the end of your first year — automatically.
• Is the Discover it® Secured Credit Card worth it? With no annual fee, generous rewards, and a security deposit as low as $200, this card is a clear frontrunner in the secured credit card game.

Read our Discover it® Secured Credit Card review.
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Petal® 1 “No Annual Fee” Visa® Credit Card

Best for local cash back offers

• This card is a good fit for: Credit builders who are after cash rewards and no annual fee.
• This card is not a great choice for: Someone looking for consistent cash back opportunities. Cash back offers from the Petal Perks program are occasional and valid with select merchants only.
• What makes this card unique? Instead of only using your credit score to determine your eligibility, the Petal 1 Card evaluates other financial factors like your income and bill payment behavior.
• Is the Petal® 1 “No Annual Fee” Visa® Credit Card worth it? If you’re looking for a low-cost starter card, the Petal 1 Card’s flexible eligibility guidelines, lack of fees and cash back opportunities make it a solid choice.

Read our Petal® 1 “No Annual Fee” Visa® Credit Card review.
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Who should get a credit card for bad credit?

Bad credit is typically defined by FICO® as a credit score lower than 579. So if your credit score falls within that range, your best bet may be a credit card for bad credit.

People who have made financial mistakes, like defaulting on a loan, will often have poor credit. Unfortunately, a lack of credit history can also contribute to a poor score. For this reason, many young consumers start out with bad credit.

It’s important to keep in mind that credit scores are flexible and can change often depending on your individual credit activity.

Evaluating credit cards for bad credit

Credit cards for bad credit can be a lifeline if you need to build your credit from scratch, but there are tradeoffs.

Pros

• Easier to be approved for: If you’re brand new to credit or rebuilding after financial setbacks, many credit cards are out of reach. Credit cards for bad credit are designed to help consumers build their credit from the ground up.
• Credit-building tools: Free access to your credit score, auto-pay, and financial education resources are common features among credit cards for bad credit. Some issuers will even review your account for a credit limit increase after several months.

Cons

• Higher interest rates: Credit scores are meant to gauge how likely it is that you will default on a credit card, so creditors and lenders often charge a higher interest rate to account for the riskiness of a cardholder with bad credit. This can be devastating to an outstanding balance, but proper card habits over time can earn you a friendlier rate.
• Lack of rewards: Credit cards designed for bad credit seldom feature rewards like cash back, travel points, introductory offers or sign-up bonuses. As you work towards better credit, cards with these enticing features become a possibility.
• Less leeway from issuers: Although it will vary card-by-card, bad credit options are typically less generous when it comes to penalties and fees. Also, if you ever need to negotiate with your provider, a bad credit score may keep you on a shorter leash as you try to plead your case.

The difference between secured and unsecured credit cards

Secured credit cards require an initial deposit, which serves as a layer of protection for the card issuer in case you miss payments. The deposit you make often becomes your credit limit. But you may receive a credit line that is greater than the initial deposit.

A secured credit card otherwise operates in a way that is similar to a regular, unsecured credit card. You’ll be able to purchase items with the card and then make payments. Interest is charged on balances carried month-to-month.

If you’re curious to learn more about these options, check out our picks for the best secured credit cards available from our partners.

Unlike secured credit cards, unsecured credit cards don’t require a deposit. They allow you to buy items, charge them to the account, and then pay off the balance. However, unsecured credit cards for bad credit tend to include additional fees and higher-than-average interest rates.

How to get a credit card with bad credit

Getting credit is never a sure thing, especially when the economy is in a state of uncertainty. A recent Bankrate survey found that 21 percent of consumers have had an application for credit denied in recent months because of a low credit score. Thirteen percent of that group had been rejected for a credit card.

Try not to get discouraged, though. Even if you have bad credit, credit cards aren’t necessarily out of your reach. Consider these four tips for finding a card that fits your needs.

1. Check your credit score first. Knowing your credit score will give you a better idea of which cards you might qualify for, as well as your overall financial standing. Most credit card offers specify a range of recommended credit scores.
2. Do your research. Be thorough in your research before applying and ensure it’s the right card for your needs. Look closely at any fees and interest rates.
3. Be selective with applications. An application that involves a hard inquiry on your credit will temporarily lower your credit score.
4. Consider secured credit cards. If you’re finding it difficult to find a card that you qualify for, take a look at secured cards. These cards require a deposit upfront, but with on-time payments and other types of responsible credit behavior, these cards could help you build your credit score.

What’s the easiest credit card to get approved for?

Although many of our listed cards have low barriers to entry, finding guaranteed approval in the credit card world is a near-myth. The closest thing you’ll get are options that let you bypass a credit check, such as the OpenSky Secured Visa Credit Card. To take a broader approach on finding the easiest credit cards to be approved for, here are some types that make it much simpler than others:

• Secured cards: Submitting a deposit lessens the risk taken on by card issuers, so these types of cards are often much more accessible than their unsecured counterparts. You can get your deposit back after closing or upgrading your account, so these more inclusive options can be an excellent starting point to increasing a bad credit score.
• Student credit cards: There may be certain requirements to be approved, such as proving you have independent income or finding a co-signer, but these cards are specifically designed to help those who are just starting their credit journey. This often means no credit history is required, making options like the Discover it® Student Cash Back and the Discover it® Student chrome accessible to many.
• Store cards: These cards are typically easier to qualify for than typical credit cards, and can be used as a credit-building tool with the right habits. However, their often low credit limits and high interest rates raise valid questions around whether store cards are worth it.

How to build your credit score

With time, careful decision-making and the right credit card, you can make a bad credit score better and gradually build a healthier credit profile.
Start by following these five tips for improving a bad credit score:

1. Check your credit report. Credit report errors are common, so obtain your credit report and check it thoroughly. If you see any, be sure to submit a dispute.
2. Clear debts. Catalog all of your debts and create a plan of attack to clear them. Prioritize your debts and stick to a payment schedule to pay everything down. Of course, this is easier said than done, but managing debt is a big step forward in improving your score.
3. Spend smart. Ensure you’re making all of your payments on time and in full. Keep a healthy amount of available credit, maintain low balances when possible and do your best not to spend beyond your means.
4. Stick to a plan. Although you can quickly find yourself with a low score, the time it takes to raise your credit score can be a bit longer. Avoid opening and closing credit accounts unless it makes sense.
5. Keep climbing. Length of credit history plays into your score, but recent activity also carries weight. Your continued good credit behavior will be rewarded as enough time passes for past debts to fall off your credit report.

How we chose our list of top cards for bad credit

Bankrate uses a 5-star scoring system that evaluates credit cards based on annual fees, APR , sign-up bonuses, rewards programs and other features. For credit cards tailored to people with poor or bad credit, we focus on the attributes you might be most concerned about when selecting a new credit card.

Annual fee

Getting charged a fee every year for being a cardholder can eat into the value you’re getting from your card. We look for benefits that help make up for the cost of an annual fee.

0% introductory APR offer

The annual percentage rate is the rate of interest you’ll have to pay on your outstanding balance. The longer the period without APR, the better.

Balance transfer offer

When you move part or all of the outstanding balance you owe from one lender to another, this is called a balance transfer. Some cards offer a low fee on transferred balances — usually around 3%-5% of the transferred amount. Transferring a balance can be a tool to consolidate debt, pay down what you owe at a lower rate and improve your credit score.

Rewards

Even if your credit score isn’t perfect, there are cards that offer fantastic rewards that help you earn cash back, points, or miles on what you’re spending every day. We evaluate the rewards and identify which card is a good fit for different types of spenders.

Additional research to help you improve your credit score

Check out these informative Bankrate resources, plus in-depth reviews of credit cards designed for people with bad credit:

• How to build credit with a credit card
• Credit Scores & Reports Advice
• All reviews of credit cards for bad credit

Have more questions for our credit cards editors? Feel free to send us an email, find us on Facebook, or Tweet us @Bankrate.