Best Credit Cards for People With Bad Credit Scores
If your credit score falls between 300 and 669, companies might consider you someone with “bad,” “fair,” or “very poor” credit, according to Experian. In fact, around 34% of Americans have credit scores below 670.
If your credit score needs a boost, follow our advice to help work towards a score of 670, which is considered to be the lower-end of “good credit.” Improving your credit score is worth it. A higher credit score means you hold the power, not the lenders. Low credit scores can mean:
- Lenders can deny you home or auto loans, or credit cards.
- If they do offer you loans or cards, they’ll have higher interest rates, which will cost you more money over time.
- Many credit cards for those with poor credit don’t offer perks such as rewards or cash back.
- You may have to put down bigger down payments.
- You can even be turned away from certain jobs, especially positions that include being involved with large amounts of money.
Improving your credit score is worthwhile, but it’ll take time. Until you get there, you can still get credit cards that offer some perks and decent interest rates. Here are some of our favorites:
What makes this card good for people with low credit scores:
A “secured” credit card, like this one, means that you need to pay a refundable security deposit before you can use it.
Fortunately, the security deposit doesn’t have to be a large amount of money, and you can pay it over time. Depending on how much credit you want, you’ll only need to make a deposit — by phone or online — of $49, $99, or $200.
The minimum deposit of $49 means you may instantly get a $200 credit limit. The more you put down, the higher your credit limit — up to $1,000 total.
Every six months, Capital One will review your financial situation and may increase your credit limit, without asking you to make an additional security deposit.
As you make on-time payments, you’ll get that money back, either in the form of statement credits or when you close your account and pay off your balance.
Capital One also regularly reports on-time payments to the three major credit bureaus, Equifax, Experian, and TransUnion.
This means your credit score will inch upwards every time you make a payment on or before the due date.
The best part? There’s no annual fee, which is often required for people who are working towards improving their credit scores.
What makes this card good for people with low credit scores:
There is no hard credit check (sometimes called a hard inquiry) to open this card. A hard credit check lowers your credit score a few points and stays on your report for about two years.
Hard inquiries add up. Some cards, like this one, only perform soft credit checks. These don’t impact your credit score.
One reason there’s no hard inquiry for this card is that you must put down a $200 minimum deposit. This will be your credit limit. But you can keep depositing money — up to $3,000 — and increasing your credit limit.
On-time monthly payments are reported to the three major credit bureaus, which will help increase your credit score over time.
What makes this card good for people with low credit scores:
This card offers the best cash-back perks of all of the cards on this list. When you turn on your phone’s location settings, you’ll earn 2% to 10% back at some local businesses near you.
Unlike other options on this list, Petal 1 doesn’t rely solely on your credit score to determine if you can get a card, or what your limit should be.
They use an algorithm — which analyzes what goes into and out of your bank accounts — to determine your eligibility.
This means you’ll need a bank account to get this card, as well as a Social Security number or an Individual Taxpayer Identification Number.
And if you are tech-savvy, or want to use technology to better manage your money, this is the card for you. Their app allows you to track your income, see what you spend money on and automate your payments.
What makes this card good for people with low credit scores:
This card does not require a security deposit.
Your credit limit will only be $300, and you will have to pay an annual fee, perhaps as high as $99. But if you need access to a few hundred dollars quickly, those drawbacks may be worth it.
Indigo doesn’t pull a hard check on applicants.
You can check to see if you will qualify for this card on their website with no impact to your credit score.
There are a few other perks to having this card in your wallet, although they’re pretty basic:
- Extended warranty coverage.
- Roadside assistance.
- Rental car coverage.
- Free access to your credit score.
- $0 fraud liability.
What makes this card good for people with low credit scores:
You do not need to put down a security deposit. After you apply, you’ll have almost instantaneous access of up to $400 (the exact amount depends on your credit score).
On-time payments are reported monthly to the three credit bureaus, so this card may help build good credit.
What makes this card good for people with low credit scores:
Finally! A credit card that offers 1% cash back on purchases of gas, groceries, mobile phone service, internet service, and cable and satellite TV. Sure, this doesn’t seem like much to people with higher credit scores, but it’s something.
You don’t need to put down a security deposit to use this card. If you qualify, the minimum credit line you can receive is $300.
What makes this card good for people with low credit scores:
This card is good for people who don’t have stable employment or worry that unexpected emergencies may stop them from paying bills.
For an extra fee of 89 cents for every one hundred dollars in your monthly balance, you can access a service called “Premier Credit Protection.” This means they will cover their credit payments for you if you are suddenly disabled, unemployed, or have to take unpaid family leave.
What makes this card good for people with low credit scores:
Think of this as a mix between a savings account, CD and a credit card.
As you pay into this fund each month, Self reports on-time payments to the three major credit bureaus. This will slowly increase your credit score. Once you’ve saved enough money in your account, you’ll have access to those funds in the form of a credit card and your credit report will show that you were trustworthy enough to secure a new loan.
What makes this card good for people with low credit scores:
To apply, you need to provide your contact and financial information online. The lender then performs a soft credit inquiry, which won’t affect your credit score, to see if you qualify, and what limit you’ll be entitled to.
At that point, if you agree to their terms, the company performs a hard credit check.
Your credit score can take a ding for that hard inquiry, but it may be worth it to you.
The Destiny Mastercard doesn’t require a security deposit.
Destiny usually accepts most applicants, and regularly reports your activity to the three major credit bureaus. So over time, with prompt payments and staying below your credit limit, your credit score should increase.
What makes this card good for people with low credit scores:
As you work towards improving your credit score, this card will protect you from fraud. If you notice charges you didn’t make on your statement, the company will quickly investigate, and reimburse you for any charges you’re not responsible for.
Like others on this list, your payment history is reported regularly to the three major credit bureaus. On-time payments, and staying under your credit limit, will increase your credit score over time.
