Key Takeaways

  • Unsecured credit cards for bad credit don't require security deposits, but may come with high fees and interest rates.
  • It's best to find a card for bad credit that lets you update to a better card in the future.
  • Secured cards, which may require security deposits, may be better options for building your credit.

A bad credit score, or any score below 579 on the FICO scale, can put a wrinkle in nearly any financial plan, including if you want to get a credit card. Like it or not, most credit card issuers require good or excellent credit (670 to 850) to qualify for their best offers. However, if you have at least fair credit, or a FICO score between 580 to 669, you’ll likely have more unsecured credit card offers available to you.

Secured credit cards are a popular option for people with bad credit, but these cards require a security deposit upfront. If that doesn’t sound appealing, there are some unsecured credit cards for bad credit to consider, all of which let you borrow money and build credit without putting down a security deposit.

The best unsecured credit cards for bad credit in 2023

Before we dive in, it’s worth noting that there aren’t many unsecured credit cards available for bad credit. Those that do exist are more likely to come with annual fees, low credit limits and little to no perks.

Credit One Bank® Platinum Visa® for Rebuilding Credit: Best for earning cash back

The Credit One Bank Platinum Visa for Rebuilding Credit* is a popular unsecured credit card available for consumers with bad credit. This card lets you earn 1 percent in cash rewards on eligible gas and grocery purchases and mobile phone, internet, cable and satellite TV services (terms apply). You’ll also get free credit score access, which can help you track your progress to better credit.

Don’t let the cash back distract you from a significant downside, though. This card comes with a $75 annual fee for the first year, then an annual fee of $99. You would have to spend $9,900 per year within the eligible 1 percent cash back categories to offset that $99 fee, so it probably doesn’t make sense to choose this card for the cash back. You may want to consider a no- or lower-annual-fee option instead.

Pros:

  • 1 percent cash back within popular spending categories
  • Free credit score access
  • Get prequalified without a hard inquiry on your credit report

Cons:

  • Credit limit can be as low as $300
  • Charges a $75 annual fee the first year, then $99 annually ($8.25 per month)

Mission Lane Visa® Credit Card: Best for a lower annual fee

If you’re looking for a straightforward unsecured card that will help you to build credit, the Mission Lane Visa Credit Card could be a good fit for you. It’s a notable unsecured credit card for bad credit because it comes with a lower annual fee of up to $59 and no hidden fees, which are common with many subprime cards. Plus, depending on your creditworthiness, you may qualify for a $0 annual fee.

Pros:

  • $0 annual fee, depending on creditworthiness
  • Could get a credit limit increase after seven months of on-time payments
  • Reports to all three credit bureaus

Cons:

  • Up to $59 annual fee (offer through Bankrate; up to a $75 annual fee through other methods)
  • Minimum starting credit limit of $300
  • No rewards

Indigo® Mastercard®: Best for traveling abroad

If you have a very low credit score or have declared bankruptcy, you may want to consider the Indigo Mastercard. In general, it comes with few perks, but it’ll help you to build your credit so you’ll be able to qualify for better cards down the line.

However, if you travel abroad frequently, it’s worth noting that this card comes with a 1 percent foreign transaction fee. This fee is much lower than other similar cards, which typically charge a foreign transaction fee of 3 percent. But if you have at least fair credit, you may be able to qualify for a card that doesn’t charge any foreign transaction fees.

Pros:

  • $0 annual fee depending on creditworthiness
  • 1 percent foreign transaction fee
  • Reports to all three credit bureaus

Cons:

  • Up to $99 annual fee
  • No rewards
  • Maximum credit limit of $300

Capital One Platinum Credit Card: Best for fair credit

You might put yourself in the “bad credit” bucket because you know your score isn’t ideal, but there’s a big difference between having bad credit and fair credit when finding cards you may qualify for. The Capital One Platinum Credit Card is available for consumers with fair credit, which includes FICO scores from 580 to 669.

While this card doesn’t offer any rewards, you can get prequalified without a hard inquiry on your credit report, and you can qualify for a higher credit limit in as little as six months. Best of all, there’s no annual fee.

Pros:

  • Get prequalified online without a hard inquiry on your credit report
  • Potential for a higher credit limit in as little as six months
  • No annual fee and no foreign transaction fees

Cons:

  • High variable APR
  • No rewards on spending

What to look for in an unsecured credit card for bad credit

Unsecured credit cards for bad credit aren’t all the same. Here’s what to look for and what to avoid when looking for the right card for you.

What you want:

  • Automatic review for a credit line increase. Unsecured cards for bad credit are likely to start you out with a low credit limit. However, many give you the chance to qualify for a higher credit limit in as little as six months, which could boost your credit score in addition to expanding your purchasing power.
  • An application process that reviews factors other than your credit score. Some cards for bad credit look at other factors like your banking history for approval. This can be useful if your credit score is really low or if you have no credit score at all.
  • Reporting to the major credit bureaus. You want to make sure cards you consider report balances and payments to the three credit bureaus — Equifax, Experian and TransUnion. Ultimately, this reporting is what will help you to build credit over time.

What you don’t want:

  • High annual fees. Unfortunately, annual fees are common with unsecured credit cards for bad credit. If possible, you should look for a card that charges a lower annual fee or no annual fee at all.
  • Hidden fees. In addition to looking for cards that don’t charge high annual fees, watch out for hidden charges such as application fees or monthly account fees. If you travel internationally, you should also consider a card that doesn’t charge foreign transaction fees.
  • High interest rates. Look for a card with a reasonable variable interest rate as close to the average interest rate as possible, if you plan to carry a balance from time to time.

How to repair your credit with a credit card

Repairing your credit with a credit card can take some time, but the following tips can help you get the best results in the shortest amount of time.

  • Always pay your bill on time. The most important factor that makes up your FICO score is your payment history, so you should strive to pay all your bills early or on time each month. Where on-time payments can be a boon to your score, late payments can have disastrous effects.
  • Keep your credit card balance at a minimum. Another important factor that makes up your FICO score is your credit utilization ratio. For the best results, keep your balance below 30 percent of your available credit. So if you have a credit limit of $300, keep your balance below $90.
  • Ask for a higher credit limit as soon as you can. If you carry a balance, getting a higher credit limit can lower your utilization rate. If you are eligible for a credit line increase at any time, you should take one. However, avoid charging more than you can reasonably afford to your card when your limit increases.

When a secured credit card might make more sense

If you have bad credit and you can’t get approved for an unsecured credit card, don’t be afraid to look for a secured credit card. While putting down a cash deposit may not seem ideal, secured credit cards give you the chance to build credit when other cards won’t. Plus, the best secured credit cards offer rewards, no annual fee, and paths to upgrade to an unsecured credit card once your score has improved.

Finally, remember that your security deposit isn’t lost. When you close or upgrade a secured credit card in good standing, you’ll get your security deposit back.

The bottom line

The best unsecured credit cards for bad credit may not be exactly what you want, but they do let you borrow money and build credit, and some even offer rewards. More importantly, cards in this niche give you the chance to build credit so you can get a better credit card later on. However, make sure to look at some of the top credit cards for bad credit and fair credit before you choose a card.

Frequently asked questions

*The information about Credit One Bank® Platinum Visa® for Rebuilding Credit has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.