Can I get a credit card with bad credit?

Even if you have bad credit, there may be credit card options for you. Your options may just be different from those of someone with higher credit scores.

Explore types of credit cards that may be available for people with low credit scores, and learn how to compare options and improve your chances of getting a credit card.

What you’ll learn:

• It’s possible to get approved for a credit card even if you have bad credit scores.
• If you’re having trouble getting approved for an unsecured credit card, a secured card might be an option.
• To improve your chances of approval, you can start developing responsible habits before you apply.

Before considering credit card options, it helps to understand credit scores and what’s meant by a bad or poor credit score.

Credit-scoring companies use different formulas, or models, to calculate credit scores. There are many different credit scores and scoring models. That means most people have more than one score out there. 

For FICO®, any score below 580 qualifies as poor—its lowest score range. VantageScore® calls any score below 600 subprime.

According to FICO, borrowers with a FICO score in a lower range tend to be viewed as a credit risk. And VantageScore says those with subprime credit might struggle a bit more when applying for cards or loans. But ultimately, decisions come down to each lender and the level of risk it’s comfortable with.

When you compare credit cards, you may see them grouped into two categories: secured and unsecured. Within either category, there are potential credit card options for people with bad credit: 

• Secured cards require a security deposit, which the credit card issuer holds as collateral. 
• Unsecured cards don’t require a deposit to open the account.

Both types include different types of credit cards, like cash back cards, travel cards and student cards. 

If you don’t initially qualify for an unsecured credit card, responsible use of a secured card may help you build credit. And that can make you a better candidate for things like mortgages, car loans and credit cards that offer rewards.

Comparing credit card offers and eligibility requirements before you apply could help you find the right card to fit your needs. Here are a few things to consider:

Interest rates on a credit card are typically the same as the card’s annual percentage rate (APR). And looking at the rates of different cards is a good place to start. One way to avoid interest charges on new purchases is to pay off your statement every month.

If your goal is to improve your credit without spending a ton on fees, take note of other potential charges like annual fees. If you’re an international traveler, check for foreign transaction fees too.

If you’re using your card responsibly and making on-time monthly payments, credit reporting may be one potential benefit of using a credit card instead of a prepaid or debit card. You can’t build credit unless your responsible use is being reported. So check that the issuer reports to all three major credit bureaus: Equifax®, Experian® and TransUnion®.

Consider which card issuers might allow you to upgrade your credit card as your credit builds. Upgrading may be preferable to applying for a new card because it allows you to keep the same account open. And that helps you avoid closing an account and triggering a hard inquiry, both of which can have a negative impact on your credit scores.

If approved for a credit card, you may be offered a lower credit limit than people with higher credit scores. But once you’ve established a history of on-time payments, your lender may consider you for a credit limit increase. 

When it comes to a higher credit limit, there may be another option for secured cardholders. Some issuers allow cardholders to increase their credit lines if they deposit more than the minimum security deposit.

Credit products that don’t require good credit scores are sometimes known as subprime credit. A subprime credit card may come with a higher interest rate or a lower borrowing limit than cards designed for borrowers with higher credit scores. 

Subprime lending is different from predatory lending. According to the U.S. Attorney’s Office, predatory lending happens when a lender uses “fraudulent, deceptive and unfair tactics” designed to benefit them if a borrower struggles. 

Federal laws like the Equal Credit Opportunity Act and the Truth in Lending Act are designed to protect borrowers from things like unfair interest rates and hidden fees. Some states also have their own laws to curb predatory lending. 

You can contact your state consumer protection office to learn more. And if you think you’ve experienced predatory lending, you can submit a complaint to the Consumer Financial Protection Bureau (CFPB).

It takes time, but there are things you can do that might help you track and build credit. In turn, you could improve your chances of getting approved. Here are some examples.

To get a better idea of where your credit stands, consider using CreditWise from Capital One. CreditWise is free and available to everyone. 

Even if you’re not a Capital One cardholder, you can use CreditWise to track changes to your TransUnion VantageScore® 3.0 credit score. And checking your scores won’t hurt your credit.

You can also use the CreditWise Simulator to understand the potential impact of your financial decisions, like applying for a credit card, before you make them. Knowing where your credit stands could help you avoid applying for cards you’re unlikely to be approved for.

Taking stock of what you’re spending and saving can help you create a budget and avoid living beyond your means. It’s also another way to get a sense of which credit card may be right for you. 

For example, if a big portion of your monthly expenses goes toward food and groceries, you could explore credit cards that offer additional rewards on those items. You may not be in a position to get one immediately. But as you rebuild your credit, it could be a goal to work toward.

Being mindful of your finances and developing good habits can help you even after you get a credit card. That’s because using your card responsibly by doing things like making on-time payments every month is key to rebuilding credit.

There are several good financial habits that you can start to develop even before you apply for a credit card.

• Think about how you’ll use the credit card. You might consider limiting the use of your new card to a few specific expenses each month. That way, you can feel more confident that you’ll be able to pay it off in full, which the CFPB says is the ideal.
• Practice paying on time. Paying something like your utility or phone bill on time may not directly improve your credit, but if your goal is to get a credit card, paying on time is an especially important habit to develop. That’s because your payment history is an important factor when it comes to your credit scores. 
• Don’t apply for too many cards at once. Consider how many applications you plan to submit. Credit-scoring formulas account for your recent activity. Hard inquiries from multiple credit card applications could reflect negatively on your situation. For some cards, you can see if you’re pre-approved before you apply, which won’t hurt your credit. Capital One’s pre-approval tool is fast and can give you a better idea of the cards you may be eligible for.

Here are a few commonly asked questions about getting a credit card with bad credit:

If you have low credit scores, you might find that your credit card options are limited. But finding a card that works for you and getting approved is still possible. With responsible use, a credit card can help you reestablish your credit and improve your credit scores over time. And that opens the door for better cards in the future. 

If you’re ready to take the first step toward rebuilding your credit, you could check out Capital One’s credit cards for building credit.

New to credit or looking for your next credit card?

• Check for pre-approval offers with no risk to your credit score.
• Earn unlimited 1.5% cash back on every purchase, every day with Quicksilver.
• Explore Capital One’s credit cards for building credit with responsible use.
• Monitor your credit score with CreditWise from Capital One. It won’t hurt your credit, and it’s free for everyone.