A credit score below 580 puts you in the bad credit category. If you fall within this range, you'll likely have trouble qualifying for a credit card. But that doesn't mean all hope is lost. If becoming an authorized user on someone else's account isn't an option, there are a few cards that are marketed toward people with less-than-stellar credit histories.
Secured cards are typically the best choice for people with bad credit. These cards require a security deposit (often $200) that becomes your line of credit. When you use your secured card responsibly — paying your bill on time and in full each month — you can begin to improve your credit score.
Once you establish a fair (580 to 669) or good credit score (670 to 739), you can graduate to an unsecured card or apply for a new card. (Check out the difference between secured cards and unsecured cards.)
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CNBC Select breaks down the best credit cards for people with bad credit, so you can choose a card designed to help you build credit.
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
Dollar-for-dollar match of all cash back earned the first year
N/A on purchases
3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
New / Rebuilding
Who's this for? The Discover it® Secured Credit Card is a well-rounded secured card that offers many of the benefits that are typically found with unsecured cards. Cardholders can earn cash back, receive a generous welcome bonus, use the card overseas without incurring added fees and more — all for no annual fee.
Cardholders earn a competitive 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%. Plus, you can earn unlimited 1% cash back on all other purchases automatically. The welcome bonus is also unique: For new card members in the first year only, Discover will automatically match all the cash back you've earned at the end of your first year. If you earn $25 cash back at the end of the first year, Discover will give you an additional $25.
This card requires a $200 security deposit, which is fairly standard for secured credit cards. It stands out from the crowd because cardholders have a clear path to upgrading to an unsecured card (and getting their deposit back). Starting at eight months from account opening, Discover will automatically review your credit card account to see if they can transition you to an unsecured line of credit and return your deposit. This takes the guesswork out of wondering when you'll qualify for an unsecured credit card.
This card doesn't offer cash back, points or miles
No current offer
N/A for purchases and balance transfers
26.99% variable on purchases and balance transfers
No credit history
Who's this for? If you're looking for a secured card with a low deposit, the Capital One® Secured Mastercard® is your best option. This card has no annual fee and minimum security deposits of $49, $99 or $200, based on your creditworthiness.
If you qualify for the low $49 or $99 deposits, you'll still receive a $200 credit limit. This is a great feature considering many secured cards require $200 deposits to receive an equivalent line of credit.
Capital One also grants cardholders access to a higher credit limit after you make the first five monthly payments on time — a good incentive to maintain a timely payment history (which is essential when you're trying to raise your credit score). In addition to paying on time, make sure you pay in full, since this card has a very high 26.99% variable APR.
No credit history
Who's this for? The DCU Visa® Platinum Secured Credit Card offers one of the lowest interest rates for a no annual fee secured card at 11.50% variable.
While we don't recommend carrying a balance month-to-month (especially when you're trying to build or rebuild credit), it can be a good idea to choose a low interest secured card if you have a history of carrying balances or you're looking for a safety net.
There is a higher-than-average $500 minimum security deposit to open the card. But it does come with some additional perks, including travel insurance, auto rental collision damage waiver and extended warranty protection.
Membership to the Digital Federal Credit Union is required, but anyone can join in one of several ways: if you're a friend or family member of a DCU member, live in select communities, work for select employers or make a one-time contribution (as low as $10) to a participating organization.
This card doesn't earn cash back, points or miles
No current offer
17.39% variable on purchases and balance transfers
No credit history
Who's this for? If you have bad credit and have struggled to be approved for cards in the past, you may want to consider a card that doesn't perform a credit check. The OpenSky® Secured Visa® Credit Card doesn't pull your credit when you apply.
Like other secured cards, a minimum $200 security deposit is required to open the card and you can deposit up to $3,000.
While this card is great for no credit check, it does come with a $35 annual fee, unlike the other cards mentioned above that have no annual fee. The annual fee can be worthwhile if you're trying to build your credit and you have trouble qualifying for cards other cards.
To determine which credit cards offer the best value, CNBC Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including: annual fee, minimum security deposit, credit limit, rewards program, introductory and standard APR, welcome bonuses and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also took into account how easy it is to upgrade the card from secured to unsecured and how quickly you can get your security deposit back.
Because it's unusual for secured credit cards to have robust rewards programs, we did not analyze how many rewards points you can earn in the first year. For cardholders who are looking to rebuild credit, it's more important to practice good credit card habits — spending within your means, paying your balance on time and in full — than try to optimize your points balance.
For rates and fees of the Discover it® Secured Credit Card, click here.