If you’re trying to rebuild or establish your credit, finding the right credit card can feel like a daunting task. You may think your options are limited, but there are actually plenty of great cards out there for people with low credit scores. In fact, the right card can be a powerful tool in helping you improve your credit over time.
Choosing the best credit card for low credit requires a little bit of research. You want to find something that not only offers reasonable terms but also gives you the opportunity to boost your credit score. So, what should you look for in a card, and which ones are the best options? Let’s break it down.
What to Look For in a Credit Card When You Have Low Credit
Before jumping into specific recommendations, it’s important to understand what features make a card ideal for someone with poor or limited credit history. Here are a few key things to consider:
- Low Fees: Credit cards for people with bad credit often come with higher fees. This can include things like annual fees, late payment fees, and sometimes even setup fees. Ideally, you want a card that minimizes these fees, especially when you’re just getting back on your financial feet.
- Reasonable Interest Rates: While credit cards for people with low credit scores usually have higher interest rates than standard cards, there are still some cards that offer better rates than others. A high APR (Annual Percentage Rate) can lead to significant debt if you’re not paying off your balance in full, so look for the most manageable rate available.
- Reporting to Credit Bureaus: A key factor in rebuilding your credit is ensuring that your credit activity is reported to the major credit bureaus: Experian, Equifax, and TransUnion. If you’re making timely payments, you’ll want that information to show up on your credit report so your score improves.
- Secured vs. Unsecured: For those with bad credit, secured credit cards are often the best option. These cards require a refundable deposit as collateral, which typically sets your credit limit. Don’t worry, with responsible use, you can eventually upgrade to an unsecured card. Unsecured cards for low credit scores do exist, but they often come with more fees and higher rates.
- Credit Building Features: Some cards are specifically designed to help rebuild your credit. They may offer perks like regular access to your credit score, credit line increases after several on-time payments, or even education tools to help you manage your finances better.
With these factors in mind, let’s explore some of the best credit cards available for people with low credit scores.
Top Credit Cards for People with Low Credit Scores
1. Discover it® Secured Credit Card
If you’re looking for a solid secured card that also rewards you for your spending, the Discover it® Secured Credit Card is one of the top choices. Here’s why:
- No annual fee, which is a huge bonus, especially when you’re focused on rebuilding your credit.
- You earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, you’ll get 1% cash back on all other purchases.
- They match all the cash back you’ve earned at the end of your first year, which is rare for secured cards.
- After 7 months, Discover reviews your account to determine if you’re eligible to upgrade to an unsecured card. If so, you’ll get your deposit back.
- It reports to all three credit bureaus, ensuring your good behavior helps boost your score.
This card offers a great way to build credit while also earning rewards—something you don’t see with many other secured cards.
2. Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Credit Card is another excellent option if you’re working with poor credit. Its unique feature is that it offers a low deposit requirement:
- Depending on your creditworthiness, your initial security deposit could be as low as $49, $99, or $200 for a $200 credit line. This is a big perk if you’re short on cash but want to start improving your credit.
- No annual fee, which makes it more affordable in the long run.
- Access to a higher credit line in as little as 6 months with on-time payments, giving you more flexibility as you show responsible usage.
- Regular reporting to all major credit bureaus, helping to build your credit score over time.
This card is great for those who want flexibility with their deposit while keeping costs low.
3. OpenSky® Secured Visa® Credit Card
If you’re struggling to get approved due to a very low credit score, the OpenSky® Secured Visa® Credit Card is a good fit. Here’s why:
- No credit check is required, meaning even if your score is really low or you’ve had trouble getting approved for other cards, you can still get this one.
- Reports to all three credit bureaus to help you rebuild your score.
- Requires a refundable security deposit, starting at $200, which determines your credit limit.
- Although there’s an annual fee of $35, the lack of a credit check and the opportunity to rebuild credit outweighs this small cost for many.
This is one of the easiest cards to get approved for, making it a go-to for those with seriously damaged credit.
4. Credit One Bank® Platinum Visa® for Rebuilding Credit
For those looking for an unsecured card, the Credit One Bank® Platinum Visa® is a top contender. Unlike secured cards, it doesn’t require a deposit, but there are a few things to watch out for:
- Your credit limit is typically small at first but can grow with responsible use.
- This card offers 1% cash back on eligible purchases, which is a nice bonus for an unsecured card aimed at rebuilding credit.
- It reports to all three credit bureaus, which is key to improving your score.
- However, it does have an annual fee (typically $75 for the first year, then $99), so keep that in mind when evaluating your budget.
If you prefer an unsecured card and are okay with paying a small fee for the convenience, this card could be a good choice for you.
5. Secured Sable ONE Credit Card
The Secured Sable ONE Credit Card is gaining popularity for its flexibility and rewards. Here’s what makes it stand out:
- No credit check to apply, making it accessible for people with bad credit.
- It offers 2% cash back on purchases at Amazon, Uber, and Netflix, and 1% cash back on everything else. This is rare for a secured card.
- Reports to all three credit bureaus, helping you boost your credit score with timely payments.
- No annual fee, making it a cost-effective option for those on a budget.
- It has a unique feature that allows you to “graduate” to an unsecured card after a few months of responsible use.
If you’re looking for a card that rewards you while rebuilding your credit, the Secured Sable ONE is worth considering.
How to Use These Cards to Improve Your Credit
Getting approved for one of these credit cards is just the first step. The real key to rebuilding your credit is how you use the card. Here are a few tips to make sure you’re maximizing the benefits:
- Pay On Time, Every Time: Payment history makes up the largest part of your credit score, so it’s crucial to never miss a payment. Set up auto-pay if possible, or use reminders to ensure you’re always on time.
- Keep Your Balance Low: Ideally, you should aim to keep your credit utilization (the amount you owe compared to your credit limit) below 30%. For example, if you have a $200 credit limit, try not to let your balance exceed $60 at any given time.
- Avoid Carrying a Balance: While it may be tempting to carry a balance from month to month, especially if you’re short on cash, it’s best to pay off your balance in full each month to avoid interest charges. This will also help improve your credit score faster.
- Monitor Your Credit: Many of the cards mentioned offer free access to your credit score. Use this tool to keep an eye on how your credit is improving, and make sure there are no errors on your credit report.
- Upgrade When You Can: Once you’ve made consistent on-time payments and improved your score, consider upgrading to a better card with more benefits and a higher credit limit. This will give you more financial flexibility and help keep your credit utilization ratio low.
Final Thoughts
Rebuilding credit takes time and discipline, but with the right credit card in your wallet, you’re already on the right track. The cards listed above are some of the best for people with low credit scores, offering a range of features like low fees, rewards, and opportunities to build or rebuild your credit. Whether you opt for a secured or unsecured card, the key is to use it responsibly—pay on time, keep balances low, and monitor your progress. Over time, you’ll see your credit score climb, giving you more financial freedom and better options in the future.