How to get a credit card with bad credit

1

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired.

The best way to improve your credit is by proving that you can use credit responsibly—but if you have bad credit, you might find it difficult to get lenders to offer you new credit accounts. Knowing how to get a credit card with bad credit is an essential financial skill to help you start building a positive credit history.

It’s also a good idea to have at least one good credit card—even if you have bad credit—because credit cards can be very helpful in today’s financial world. Credit cards offer more consumer protections than debit cards, for example, giving you more security when you make purchases online.

Credit cards also give you the ability to make purchases right away and pay them off when your statement comes due—and if you pay off your statement before your grace period ends, you won’t pay interest on your charges. Many credit cards even offer rewards on everyday purchases, helping you save money as you shop.

But how do you get a credit card with bad credit? And what are the best credit cards for people with bad credit? We’ve got advice on how to find a credit card with bad credit, as well as tips to help you build your credit after you get approved.

Apply for a secured credit card

Secured credit cards are one of the best ways to get a credit card with bad credit. That said, these cards come with a pretty big caveat—you have to put down a security deposit before you’ll be able to access the card. In many cases, your line of credit will be equal to the deposit you put down. This means that if you make a $100 deposit, you’ll receive a secured credit card with a $100 credit limit.

Once you have a secured credit card, make sure to make on-time payments every month and avoid going over your credit limit. If you want to build your credit score and graduate from a secured to an unsecured credit card, you’ll need to prove that you can manage small amounts of credit responsibly. It matters less how much credit you have and more how well you use your available credit.

The best secured credit cards connect you with apps and educational tools to help you build a positive credit history as quickly as possible. These cards include:

Pros of secured credit cards

  • Access to credit, which can otherwise be difficult for those with a low credit score or no credit history
  • Build your credit score through responsible credit use
  • Graduate to an unsecured (standard) credit card after you’ve proven your ability to manage credit

Cons of secured credit cards

  • Require a security deposit
  • A low credit limit, usually equal to your deposit
  • High interest rates make it very expensive to carry a balance on the card
  • Limited opportunity to earn rewards on purchases

Apply for a credit card specifically designed for poor credit

There are many credit cards specifically designed for people with poor credit. Some of these cards are secured credit cards, but others are standard credit cards that you’ll be able to access without having to put down a security deposit.

Credit cards for people with bad credit tend to have low credit limits, but if you use your card responsibly, you can start working your way toward good credit—and you might even get upgraded to a better credit card.

The best credit cards for bad credit help you build your credit score while earning rewards on everyday purchases. These cards include:

Pros of credit cards for bad credit

  • Access to credit without a security deposit
  • Build your credit score through responsible credit use
  • Graduate to a better credit card after you’ve proven your ability to manage credit
  • Earn cash back rewards on purchases

Cons of credit cards for bad credit

  • A low credit limit, making it difficult to finance large purchases on your card
  • High interest rates make it very expensive to carry a balance on the card
  • Potential to rack up debt if you spend more than you can pay off

Open a store card

If you’re wondering how to get a credit card with bad credit, the answer might be as close as your nearest checkout lane. Retail credit cards tend to have more lenient application requirements than other types of credit cards, which means that you might be able to qualify for a store credit card even if your credit isn’t very good.

That said, just because retailers offer credit cards for people with bad credit doesn’t mean that store credit cards are necessarily your best option. Most retail credit cards charge significantly higher interest rates than standard credit cards, and your retail credit card might include a deferred interest plan that could cost you a lot more money than you realize.

If you are thinking about applying for a store card, read our guide to shopping for a retail credit card first. That way, you can choose a store card that can help you build your credit without weighing you down with high fees, limited rewards or complicated deferred interest policies.

Pros of retail credit cards

  • Better chance of getting approved than a regular credit card, even with poor credit
  • Build your credit score through responsible credit use
  • Earn discounts and rewards

Cons of retail credit cards

  • High interest rates make it very expensive to carry a balance on the card
  • Rewards are often retailer-specific, making store credit cards less flexible than standard credit cards

Become an authorized user on someone else’s card

If you want to build your credit score without having to be responsible for your own line of credit, you might want to consider becoming an authorized user on someone else’s credit card. Becoming an authorized user is a great way to piggyback on a spouse or parent’s good credit habits. If they use their credit card responsibly, your credit score could go up.

What does that mean? Many credit card issuers report authorized user accounts to the three credit bureaus (Experian, Equifax and TransUnion). When the primary user makes an on-time payment, it gets recorded as an on-time payment in your credit report as well. You can also benefit from the primary user’s credit utilization ratio and length of credit history.

Want to know more about becoming an authorized user? Here’s a complete guide to what you can expect, whether you’re the person becoming the authorized user or the person adding an authorized user to your credit card. If becoming an authorized user is in the cards, suggest to the primary cardholder that they add you to their rewards credit card. Why? Because authorized users earn rewards on every qualifying purchase—so together you can rack up even more points.

Here are a few rewards cards to consider:

Pros of becoming an authorized user

  • Build credit without being responsible for your own credit card
  • Get started even if you have no credit history
  • Parents can add teens as authorized users to give them a credit-building head start

Cons of becoming an authorized user

  • If the credit card issuer doesn’t report authorized user accounts to the credit bureaus, your credit score won’t improve. Always check with the issuer.
  • If the primary user doesn’t manage their credit account responsibly, your credit score won’t improve and may even go down.
  • Since both you and the primary user are drawing from the same line of credit, you’ll need to check in with each other to ensure you aren’t overspending your shared credit limit or taking on too much debt.

How to build your credit

Knowing how to get a credit card with bad credit is important—but so is knowing how to build your credit once you have a card. If you want to build your credit quickly, it helps to understand the five factors that make up your credit score:

To improve your credit score, work on building a positive credit history that addresses each of those five factors. Since your payment history makes up 35 percent of your FICO credit score, you can build your credit by making on-time payments every month. You can also build your score by paying off your credit card debt, avoiding unnecessary credit inquiries and keeping old credit cards active.

As your credit score improves, you’ll be eligible for more of today’s best credit cards. So keep practicing the responsible credit habits that can help you achieve a positive credit history and a good credit score.