Best Credit Cards for Bad Credit of August 2021

A photo to accompany a story about the best credit cards for bad credit Courtesy of Capital One, CreditOne, and OpenSky / Getty Images

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Getting a credit card when you don’t have good credit can be difficult. But it is possible if you start with cards designed to help people in that very situation.

If you have no credit history or you’re working to repair a bad credit score, your credit card’s main purpose should be helping you build (or rebuild) your credit. You can use these cards to make small, everyday purchases you can afford to pay off each month, while also having access to that credit line in case of emergency

You’re unlikely to qualify for the top-tier benefits and perks that other cards can offer, but if you start with these cards and make on time payments in full, eventually you’ll be able to graduate to better credit products. 

Here are the best credit card for people with bad credit:

Before You Start

If you have poor credit, make sure you’re prepared to use your credit card responsibly to repair that damage. You’ll need to establish good credit habits you can maintain throughout your life, including paying bills on time and in full, keeping a low credit utilization, and regularly monitoring your score.

Best Credit Cards for Bad Credit

OpenSky® Secured Visa® Credit Card
Good for no credit check
OpenSky® Secured Visa® Credit Card
Editor’s Score: (2.7/5)
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Secured Mastercard® from Capital One
Good for low minimum deposit
Secured Mastercard® from Capital One
Editor’s Score: (3.5/5)
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Discover it® Secured Credit Card
Good for rewards
Discover it® Secured Credit Card
Editor’s Score: (3.7/5)
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Credit One Bank® Unsecured Visa® for Rebuilding Credit
Good for no security deposit
Credit One Bank® Unsecured Visa® for Rebuilding Credit
Editor’s Score: (2.7/5)
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OpenSky® Secured Visa® Credit Card
Good for no credit check

OpenSky® Secured Visa® Credit Card

Editor’s Score: (2.7/5)
Learn more externa link icon at our partner’s secure site.

  • Intro bonus: No current offer
  • Annual fee: $35
  • Regular APR: 17.39% (variable)
  • Recommended credit score: (No Credit History)

Overview

The OpenSky Secured Visa is a secured credit card, meaning you’ll have to put down a refundable security deposit to secure your line of credit. When you apply, you’ll have to pay a refundable security deposit of at least $200, but you can deposit up to $3,000. This amount will act as your credit limit, and your deposit allows OpenSky to approve you for the card without a hard credit check. 

Unlike many secured cards, the OpenSky Secured Visa credit card does charge an annual fee of $35, and the card has a variable APR of 17.39%. 

Why we chose this card

Despite its annual fee, the OpenSky Secured Visa is accessible to everyone because you can get approved without a credit check. Once approved, the issuer reports your payment history to each of the three credit bureaus monthly, making this card a solid tool for someone with absolutely no credit history or really bad credit history to build up their score. 

But it’s not a perfect card by any means. Remember you’ll have to pay that $35 annual fee, and there’s no option to upgrade to an unsecured card once you’ve established a positive payment history. This means you’ll need to keep track of your credit score and account to decide when you’re ready to upgrade to a card with better rewards and no annual fee.

Secured Mastercard® from Capital One
Good for low minimum deposit

Secured Mastercard® from Capital One

Editor’s Score: (3.5/5)
Learn more externa link icon at our partner’s secure site.

  • Intro bonus: No current offer
  • Annual fee: $0
  • Regular APR: 26.99% (Variable)
  • Recommended credit score: (No Credit History)

Overview

The Secured Mastercard from Capital One offers a lower minimum deposit option than most other secured credit cards. After approval, you’ll be assigned a minimum required deposit of $49, $99, or $200, which will all secure you a $200 credit line. You’ll also have the option to deposit up to $1,000 to get a higher limit. 

Capital One reviews your account automatically (starting six months after account opening) for opportunities to increase your limit, and as you continue to use your card responsibly over time, you may even qualify to receive your security deposit back as a statement credit. There’s no annual fee and a variable APR of 26.99%. 

Why we chose this card

This card stands out for allowing you to secure your credit limit for a deposit of less than $200. Capital One also rewards your good credit habits, with potential upgrades to non-secured card options and automatic account reviews after just six months for a credit line increase or the return of your security deposit. 

However, your variable APR on any unpaid balances will be higher than average, at 26.99%. In order to avoid paying that high interest rate (and risking progress you make on your credit score), make sure you pay off your balance on time and in full each month. 

Discover it® Secured Credit Card
Good for rewards

Discover it® Secured Credit Card

Editor’s Score: (3.7/5)
Rewards rate:

Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Earn unlimited 1% cash back on all other purchases – automatically.

  • Intro bonus: Cashback Match™
  • Annual fee: $0
  • Regular APR: 22.99% Variable
  • Recommended credit score: (No Credit History)

Overview

The Discover it Secured Credit Card lets you earn cash back rewards while building your credit. You’ll earn 2% cash back bonus on your first $1,000 in combined purchases at gas stations and restaurants each calendar quarter. Other purchases beyond the $1,000 limit and outside of gas station and restaurant categories earn 1% cash back. 

You can also earn double cash back at the end of your first year with Discover’s Cashback Match bonus. Discover will match all the cash back you’ve earned through your first year with the card. 

After eight months, Discover automatically reviews your account every month to determine if you’re eligible to “graduate” to an unsecured credit card. There’s no annual fee and a variable APR of 22.99%. You must deposit at least $200 to open the card, which will act as your credit limit. 

Why we chose this card

Cards designed for those with poor credit rarely offer rewards, so this card is a definite standout. Make sure you maximize your rewards by swiping your card whenever you go to the grocery store or gas station.

Just remember, both your cash back rewards and the progress you make in improving your credit score can easily decline if you take on high-interest debt. Pay off your balance on time and in full each month to avoid paying that variable 22.99% interest on a lingering balance. 

Credit One Bank® Unsecured Visa® for Rebuilding Credit
Good for no security deposit

Credit One Bank® Unsecured Visa® for Rebuilding Credit

Editor’s Score: (2.7/5)
Learn more externa link icon at our partner’s secure site.

  • Intro bonus: No current offer
  • Annual fee: $0 – $99
  • Regular APR: 17.99% to 23.99% Variable
  • Recommended credit score: 300-670 (Bad to Fair)

Overview

The Credit One Bank Platinum Visa For Rebuilding Credit offers 1% cash back on gas and groceries, as well as your monthly mobile phone, internet, cable, and satellite TV payments. Credit One will regularly review your account for opportunities to increase your credit line (you’ll be issued a minimum credit line of at least $300 when you’re approved). 

Credit One also lets you choose your payment due date, so you can time your pay date with your paychecks. There’s an annual fee of $0-$99 based on creditworthiness, and a variable APR of 17.99%-23.99%. 

Why we chose this card

This card is unsecured, meaning you won’t have to put down a security deposit to open it. You can also see if you prequalify online ahead of applying. 

This card offers cash back rewards so you can save when you use your card for monthly expenses, and automatic account reviews can let you increase your spending power quickly. Just make sure you pay your bill on time and full each month to avoid paying interest on a lingering balance.

Look closely at any annual fee you’re assigned with this card as well. The fee will be billed to your account upon opening, and reduce the amount of your starting credit limit for your first month.

Best Credit Cards for Bad Credit of August 2021 Summary

OpenSky Secured Visa Credit Card

Good For: No Credit Check

OpenSky Secured Visa charges a $35 annual fee, and allows account approval with no credit check. You’ll need to submit a refundable security deposit between $200 and $3,000 when you apply, which will act as your credit limit. The variable APR is 17.39%.

Secured Mastercard from Capital One

Good For: Low Minimum Deposit

After you’re approved for the Secured Mastercard from Capital One, the issuer assigns a minimum required deposit you’ll pay to secure a $200 credit limit — but this deposit may be as low as $49, $99, or up to $200. You can also put more money down (up to $1,000) to secure a higher limit. This card has a variable APR of 26.99%.

Discover it Secured Credit Card

Good For: Rewards

This is a secured credit card, but you can earn cash back, too. You’ll get 2% cash rewards on your purchases at gas stations and restaurants each quarter (up to $1,000 in spending), and at the end of your first year, Discover will match all your cash back earnings through its Cashback Match program. Discover it Secured has a variable 22.99% APR.

Credit One Bank Platinum Visa For Rebuilding Credit

Good For: No Security Deposit

This is an unsecured card option specifically for those looking to rebuild their credit scores. You’ll be assigned an annual fee between $0 and $99 based on your creditworthiness upon account opening, and you can earn 1% cash back on gas, groceries, and monthly mobile phone, internet, cable, and satellite TV payments. This card charges 17.99%-23.99% variable APR.

Card NameWhat It’s Good ForVariable APR 
OpenSky Secured Visa Credit CardNo credit check17.39%
Secured Mastercard from Capital OneLow minimum deposit26.99%
Discover it Secured Credit CardRewards22.99%
Credit One Bank Platinum Visa For Rebuilding CreditNo security deposit17.99%-23.99%

Who Needs a Bad Credit Credit Card?

Anyone with poor credit or little-to-no credit history should look into a credit card designed to help build a stronger credit score. However, you should be prepared for the limitations of these cards. You probably won’t have access to rewards or other benefits that you can get with general credit cards, and will likely be issued a lower credit limit and higher variable APR compared to other types of cards.

These cards are meant to be used as a stepping stone to better credit habits and an improved score, so you can eventually access better products. 

What Causes Bad Credit?

There are a number of actions that can negatively impact your credit score, but missed or late payments on loans (especially over long periods of time) can have the greatest, and most lasting, negative effect. This includes your payments on mortgages, auto loans, credit cards, personal loans, and more.

Credit cards can be useful tools for managing your expenses and building your credit, but they can also lead to worse credit if you’re not careful. Credit cards are a type of loan, so you’ll need to make sure you pay your balance on time and in full every month — just like you would any other loan payment. If you don’t, you can quickly damage the credit score you’re trying to build.

Another factor of your credit score is utilization.  Your credit utilization refers to how much credit you have available (your credit limit) versus how much you actually use (spend) each month. A high utilization, or maintaining a balance close to your overall credit limit, can be detrimental to your score over time. 

What’s the Easiest Credit Card to Get Approved For?

In general, secured credit cards are easier to obtain than unsecured credit cards. That’s because you secure your line of credit with a refundable security deposit upon account opening, which provides a safety net for lenders in case you don’t end up paying your bill. 

If you’re a college student, a student credit card is another great option. Student credit cards are often unsecured, and more like general credit cards. Banks offer them to college students with lower income and less credit history than regular adults. 

If you don’t necessarily have bad credit but you have very little credit history or your credit profile is very thin, there are cards specifically targeted to people with no credit. While these often overlap with cards for bad credit, there are some issuers who may be more likely to approve people with little or no credit over someone with a bad credit history. 

How to Choose a Credit Card for Bad Credit

If you have bad credit, you should use your credit card as a credit-building tool. Look for cards that offer regular reporting to the three credit bureaus, credit monitoring tools, and even incentives to encourage your good credit habits.

They’re not common, but issuers do offer some unsecured credit cards designed to help people with bad credit. Alternatively, secured credit cards are among the most accessible card options. Unsecured cards for bad credit often charge higher fees and interest, while secured cards require an upfront (but refundable) security deposit. Weigh the benefits of each considering your individual situation to help decide.

Make sure you carefully read the terms of any credit card before applying, and take note of things like annual fees, credit limit, late payment fees, and ongoing APR. You should also look closely at a card’s recommended score range to ensure your best chances of approval, and look into prequalification if it’s an option.

How to Apply For a Credit Card for Bad Credit

You’ll apply for a credit card for bad credit just as you would any other credit card. Some issuers offer you the chance to see if you pre-qualify for their card. This means they’ll check your criteria without submitting a hard credit inquiry, which can temporarily ding your credit score. To open the account, you’ll still need to undergo a hard credit check, but prequalification can help you avoid the credit hit for a card you aren’t eligible for.

You’ll need to make sure you have some key information at the ready before filling out your application: proof of identity, Social Security number, and your sources of income. 

What To Do If Your Application Is Denied

Don’t panic. It’s always a good idea to ask the lender why they denied you so you can work on remedying that issue. But don’t immediately fire off more applications, either. Submitting multiple applications in a very short period can hurt your credit score, and may raise a red flag with issuers. 

Take time to find a card that’s better suited for your credit needs and approval odds, and try again once you’ve waited a bit since your last application. 

How to Raise Your Credit Score Using a Credit Card

Once you get approved for a credit card, start using it to build your credit

Use your card like a debit card: Only charge what you can afford to pay off each month, and always make on-time payments. Payments more than 30 days late will stay on your credit report for up to seven years, but any late payment can damage your credit and subject you to penalty fees. 

You should also be aware of your credit utilization ratio. That’s the amount of credit you have available compared to the amount used, and largely dependent on your credit limit. Experts recommend keeping this ratio below 30% for the best credit results.

Keep a handle on how you’re doing by frequently monitoring your credit report. Make sure there are no mistakes, and dispute them if there are.

Once you’ve improved your credit and you’re ready to upgrade to a different card, you should also consider the pros and cons of keeping your account open. Age of accounts makes up 15% of your credit score, so keeping older accounts open may improve your score over the long run, even if you upgrade to a better credit card eventually. However, the small credit hit you’ll get for closing your account may be worth it if you’re paying an annual fee for a card you no longer use.  

*All information about the OpenSky Secured Visa, Secured Mastercard from Capital One, Credit One Bank Platinum Visa For Rebuilding Credit and Credit One Bank Unsecured Visa For Rebuilding Credit has been collected independently by NextAdvisor and has not been reviewed by the issuer.

Methodology

EDITORIAL INDEPENDENCE

As with all of our credit card reviews, our analysis is not influenced by any partnerships or advertising relationships.

To determine the best credit cards for bad credit, we evaluate every card currently available on the market targeted to people with bad credit. Having bad credit, or little-to-no credit history, generally leaves few options for cardholders, and the majority of these cards are secured credit cards. To determine our final picks, we look at specific card details most relevant for credit-building and saving money, including annual fee, APR, any security deposit required, rewards or benefits offered, and more.