Best Credit Cards for Bad Credit

Our Objective Rating of the Best Credit Cards for People with Bad Credit

We publish unbiased product reviews; our opinions are our own and are not influenced by payment we receive from our advertising partners. Learn more about how we review products and read our advertiser disclosure for how we make money.

We've spent thousands of hours analyzing credit cards in order to identify the best cards for individuals who currently have bad credit. This list represents our top rated cards across a number of categories, all driven by our rating methodology, comprehensive card database and proprietary points valuation models. We focus on highlighting the best cards possible and do not give any preference to cards from which we may receive compensation. These are the cards we'd recommend to our family and friends, and they're the same ones we're recommending to you.

Best Credit Cards for Bad Credit for February 2021

Best Overall, Best for Cash Back : Discover it® Secured

Rating Among Cards for Bad Credit
Discover it® Secured
Apply Now
On Discover's Website
Current Offer

Discover will match all the cash back you've earned at the end of your first year, automatically.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 22.99% variable
Annual Fee $0
Minimum Deposit to Activate $200
Pay deposit in installments No
Allows upgrade to unsecured card Yes
Rewards Earning Rate Earn 2% cash back at gas stations and restaurants on up to $1,000 in purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases.
Why We Chose This Card:

The Discover it Secured card is our choice for the best overall credit card for those with bad credit as well as the best option for cash back rewards. It charges no annual fee and even offers an introductory offer on balance transfers in case you're paying high interest on another credit card. While not low, the long term interest rate is more consumer-friendly than most cards aimed at the lower end of the credit score spectrum. Discover will also automatically review your account after 8 months of responsible use for possible upgrade to an unsecured card.

  • Outstanding rewards for a secured credit card

  • Cash-back is matched at the end of the first year

  • Discover reviews your account after a period of responsible usage to determine eligibility for transition to an unsecured card

  • No annual or foreign transaction fees

  • Discover cards not as widely accepted outside the U.S. as Visa and Mastercard

  • No annual fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Automatic reviews starting at 8 months to see if Discover can transition you to an unsecured line of credit and return your deposit.
  • Get 100% U.S.-based customer service and get your free Credit Scorecard with your FICO Credit Score.

Read the full Discover it® Secured Review

Best for Students New to Credit : Discover it® Student Cash Back

Rating Among Cards for Bad Credit
Discover it® Student Cash Back
Apply Now
On Discover's Website
Current Offer

Discover will match all the cash back you've earned at the end of your first year, automatically.

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 17.99% variable
Annual Fee $0
Rewards Earning Rate Earn 5% cash back on rotating quarterly categories, each time you activate. Plus, earn unlimited 1% cash back on all other purchases — automatically.
INTRO PURCHASE APR 0% for 6 Months
Balance Transfer Fee 3% if completed by February 10, 2021. After that, 5% of the amount of each transfer.
Foreign transaction fee (%) 0%
Why We Chose This Card:

We chose the Discover it Student Cash Back is our pick for the best card option for those students just starting out with credit and haven't had an opportunity to establish a credit history while in college because of its availability to those just beginning their credit journey and its affordability. With excellent acceptance, no annual fee and relatively low interest rates its a natural fit for the student market. Plus, in addition to helping build credit the Discover it Student Cash Back card allows students to earn 5% cash back in rotating categories each quarter and 1% cash back on all other. spending.

  • High rewards on rotating spending categories, such as groceries and restaurants

  • Potential for a large bonus the first year with cash back match

  • Introductory 0% APR for six months on purchases

  • Reward for maintaining good grades

  • Rotating-category rate requires quarterly registration

  • Cashback Match - Discover will automatically match all the cash back you've earned at the end of your first year. There's no limit to how much they'll match.
  • Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select streaming services, online shopping, and more up to the quarterly maximum when you activate.
  • Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Get $20 statement credit each school year your GPA is 3.0 or higher for up to the next five years.

Read the full Discover it® Student Cash Back Review

Best Unsecured : Capital One Platinum Credit Card

Rating Among Cards for Bad Credit
Capital One Platinum Credit Card
Apply Now
On Capital One's Website
Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 26.99% variable
Annual Fee $0
Rewards Earning Rate This card does not offer a rewards program.
Balance Transfer Fee There is no standard balance transfer fee for this card.
Foreign transaction fee (%) 0%
Why We Chose This Card:

We chose the Capital One Platinum Mastercard as the best unsecured option for credit-impaired applicants because it has very low fees and reasonable interest relative to the competition. There is no rewards program but also charges no annual fee or foreign transaction fees. The Capital One Platinum is a solid option for building credit and, with consistently responsible use, can be a gateway to a broad array of reward card options from Capital One once credit scores improve. On Capital One's website they list this card as being for "fair" credit but that is defined by Capital One as those with little to no credit history or a bankruptcy in the last 5 years, which meets many lenders' definition of bad credit.

  • No annual fee

  • No foreign transaction fee

  • Opportunity for quick credit limit increases

  • No one-time offer

  • No rewards

  • High interest rate

  • Get the credit you need with no annual fee.
  • See if you’re pre-qualified for Capital One credit card offers, with no impact to your credit score.
  • Be automatically considered for a higher credit line in as little as 6 months.
  • No annual fee.

Read the full Capital One Platinum Credit Card Review

Best for Small Business : Wells Fargo Business Secured Credit Card

Rating Among Cards for Bad Credit
Wells Fargo Business Secured Credit Card
Apply Now
On Wells Fargo's Website
Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 15.15% variable
Annual Fee $25
Rewards Earning Rate Earn 1.5% cash back or earn 1X point and recieve 1,000 bonus points when your company spend is $1,000 or more in any monthly billing period.
Balance Transfer Fee See Terms
Cash Advance APR (%) 23.99%
Cash Advance Fee See Terms
Why We Chose This Card:

Our choice for the best business card option for those with bad credit is the Wells Fargo Business Secured Credit Card because it occupies a fairly unique spot in the market - allowing small business owners to build both their personal and business credit. Business credit card issuers typically require good to excellent credit for application approval, so this card can be a great option for small business owners with impaired credit or no credit history. The card also offers the flexibility to earn reward points or cash back. Unlike consumer secured credit cards, credit lines can be allowed to go as high $25,000 - providing flexible working capital for small business owners.

  • Flexible rewards structure

  • No foreign transaction fee

  • Minimal benefits

  • Choose to earn cash back or reward points.
  • $500 to $25,000 credit line.
  • $0 liability protection.
  • Annual fee: None
  • Up to 10 employee cards.
  • Spending reports available online.

Read the full Wells Fargo Business Secured Credit Card Review

Best for Travel Rewards : SKYPASS Visa® Secured Card

Rating Among Cards for Bad Credit
SKYPASS Visa® Secured Card
Apply Now
On U.S. Bank's Website
Current Offer

30,000 bonus miles after you spend $3,000 within the first 90 days

Recommended Credit Score Our recommended ranges are based off of the FICO® Score 8 credit-scoring model. Credit score is one of the many factors lenders review in considering your application.
350 579
580 669
670 739
740 799
800 850
Poor - Excellent
Regular APR (%) 16.24% variable
Annual Fee $50
Minimum Deposit to Activate $300
Pay deposit in installments No
Allows upgrade to unsecured card Yes
Rewards Earning Rate Earn 1 mile for every $1 you spend in eligible net purchases.
Why We Chose This Card:

The SKYPASS Visa Secured Card is our pick for the best credit card with travel rewards available to U.S. citizens as well as expat workers needing to build their credit while in this country. The SKYPASS Visa Secured card earns miles on Korean Air that can also be redeemed for travel through the SkyTeam Alliance over 20 airlines including domestic airline partners like Delta and international partners like Air France and KLM. The card charges a $50 annual fee but that can be justified by the 5,000 mile bonus after the first purchase, ongoing miles earning with usage and a 1,000 mile bonus when renewing card membership each year.

  • Builds credit while earning miles

  • Opportunity to move to an unsecured card after 12 months

  • Easy-to-earn bonus

  • Annual fee

  • Not great for foreign travel

  • Your credit limit must be secured

  • 5,000 SKYPASS Bonus Miles after your first purchase
  • 1,000 Bonus Miles at renewal
  • Earn 1 mile for every $1 you spend in eligible net purchases
  • Credit limit based on your deposit, from $300 to $5,000
  • The deposit is used to open a U.S. Bank Secured Savings Account to ensure your card can be paid. The secured savings account is FDIC-insured, earns interest and won’t be touched as long as your account remains open and in good standing.

Read the full SKYPASS Visa® Secured Card Review

Frequently Asked Questions

What Is Bad Credit?

Bad credit is generally defined in terms of a person’s credit score. The most widely used credit score is the FICO score. FICO scores range between 300 and 850. Bad credit is generally considered anything at 579 or lower. Fair credit is 580 to 669.

What Causes Bad Credit?

Bad credit, as indicated by a low credit score, can result from a number of factors:

  • Paying bills late. Your history of paying bills on time (or not) makes up the largest component of your credit score, at 35%. Any credit-related payments are the most critical, but even late rent or utility payments can end up damaging your score.
  • Credit-related defaults. Defaulting on a car loan, student loan, or credit card — which also falls under the general classification of payment history — can severely impair your credit score for seven to 10 years.
  • Credit line overutilization. Credit utilization, which refers to the portion of your available credit that’s in use at a particular point in time, accounts for 30% of your credit score. It is generally accepted that keeping your utilization level below 30% is best, so maxing out your credit cards can significantly hurt your credit score.
  • Total amounts owed. Similar to credit utilization, this refers to how much you owe compared with your income and other resources for paying off your debt. Owing too much can be a warning flag to lenders and lower your credit rating.
  • Home foreclosure. As with other loan defaults, having a lender foreclose on a residential mortgage is a catastrophic event for your credit history. Even if you previously had good credit, a foreclosure can change that almost overnight. 
  • Declaring bankruptcy. As you can imagine, lenders take a dim view of this legal tool of last resort to seek protection from creditors. Bankruptcy remains your credit report for seven to 10 years after filing. 
  • Little or no credit history. Age or length of credit is also a factor, accounting for 15% of the overall weighting. Having little credit history (known in the industry as a “thin file”) or no credit history at all can result in a score at the low end of the scale.
  • Mistakes or fraud on your credit report. Incorrect information or fraudulent use of your credit by someone else can drive down your credit score until you have your credit report corrected. This is one reason to check your credit reports periodically and challenge any errors or accounts you don’t recognize.

How Many People Have Bad Credit?

As mentioned above, FICO credit scores range between 300 and 850. According to the credit bureau Experian, in 2021 about 16% of Americans had what FICO classifies as very poor credit (a score under 580), while another 17% had fair or subprime credit (a score between 580 and 669).  

The full distribution of how Americans fall into the score ranges is below:

Average FICO Score by Score Range
Range Description Score Percentage w/ Score
Bad/Subprime 300-579 16%
Fair 580-669 17%
Good 670-739 21%
Very Good/Prime 740-799 25%
Excellent/SuperPrime 800-849 21%
Source: Experian

What Happens When You Have Bad Credit?

Having bad credit means that you will have significantly less access to any type of credit — and any loans or credit cards you do qualify for will be much more expensive in terms of interest rates and fees. Other credit card features that are commonly offered to people with better credit, such as rewards and promotional APR offers, will likely not be available.

Credit scores also serve as a proxy for trustworthiness in our society and are sometimes used by employers, landlords, cell phone providers, and insurance companies to determine how much of a risk you represent. They may set their prices accordingly or decline to do business with you altogether.

How Can You Recover From Bad Credit?

Regardless of how bad your credit is, there is almost always a path to move things in a better direction. Building a positive credit history can take time, but it is certainly possible with responsible credit behavior and some patience. Simply avoiding the behaviors that cause bad credit can go a long way. But, it takes credit to build credit and the first order of business if you’re starting over is to get credit in your name and begin using it prudently.

If you already have credit accounts in your name, start by getting a copy of your credit report from each of the three major credit reporting agencies, Equifax, Experian, and TransUnion. You’re entitled to at least one free report from them every year through the official website It’s vitally important to review these reports to determine if there is any incorrect information or evidence of fraudulent activity. Those mistakes can be corrected by contacting your lenders and card issuers, and the positive impact on your credit score could show up quickly.   

If you haven’t established credit yet, a credit card can be an excellent tool for doing that. If you are unable to obtain a regular credit card, a secured credit card could be your best option. Secured cards require you to deposit money in a bank account with the issuer, and typically limit your available credit to that amount. Once you’ve used a secured card responsibly for a period of time, the issuer may upgrade you to a regular card and return your security deposit.

Once you get a credit card, the best way to begin building a good credit score is to use the card, keep your credit utilization below 30%, and always pay your bill (in full, if possible) on or before the billing due date. It’s really a simple formula, but can be quite effective over time.

How Do You Know You Have Bad Credit?

The only way to know for sure whether you have bad credit is to check your credit score. There are free sources for checking your score online that only require the last four digits of your Social Security number. Checking won’t affect your credit.  

What Kinds of Credit Cards Are Easiest To Get Approved For?

Card issuers never promise to approve anyone’s application, regardless of their credit score. That said, issuers have designed card products for different segments of the market and that includes the subprime market for people with bad (or no) credit. As mentioned above, secured cards can be a good place to start if you have some cash to deposit with the card issuer. These cards typically report to all three major credit bureaus, which can help you build a solid credit history.

Another option, which doesn’t require a security deposit, is to apply for one or more store credit cards from national retailers like Sears, Target, Kohl’s, or Best Buy. These types of cards can only be used with those respective retailers — unlike cards issued by banks that carry the Visa or Mastercard logo or that are issued directly through Discover or American Express, which can be used anywhere that accepts those credit cards. Store credit cards should only be considered a stepping stone to build credit, however, as they tend to have very small credit lines and charge high interest rates.

While there are numerous unsecured Visa and Mastercard options targeting people with bad credit, they can be a needlessly expensive option. These types of cards tend to have limited credit lines, very high interest rates, and numerous fees. The Credit CARD Act of 2009 sought to reign in these abusive products (sometimes referred to as “fee harvester” cards) by outlawing any annual fee that exceeds 25% of the credit line. However, issuers have gotten around that by exploiting a loophole that allows them to charge “processing” fees that are as bad or worse than the previously predatory annual fees. So, buyer beware with these types of subprime cards. As mentioned, secured cards, from major issuers like Discover or Citi, can be a much less expensive option until your credit score rises above the 600 mark and better, unsecured options become available to you.

What Should You Look for in a Credit Card for Bad Credit?

While credit cards designed for people with poor or bad credit generally don’t come with the same generous terms as those for lower-risk consumers, there are still some critical features to look for when reviewing options and choosing one to apply for.  

  • Credit bureau reporting. Look for a card that promises to report to all three credit bureaus (Equifax, Experian, and TransUnion). You can find out by checking the terms and conditions in the general card advertisement or application. 
  • Monthly credit scores. This has become a common feature that’s provided through billing statements or on the issuer’s website. Being able to see your score rise over time can be invaluable in terms of feedback on how you’re doing and encouragement to keep at it. 
  • No annual fee (or a very low one). There are many cards available that don’t charge you an annual fee, though a security deposit is generally required for secured credit cards.
  • An automatic way to move from a secured card to an unsecured one. Many secured card issuers will automatically review your account after a period of on-time payments to determine if you’re eligible for an upgrade to an unsecured card with friendlier terms.

Can You Transfer Balances With Bad Credit?

Unfortunately, few, if any, credit cards designed for people with bad credit allow balance transfers, especially at interest rates that would prove advantageous. If you find one that does, it might make sense to transfer your balance if your current card is charging penalty rates of 36%, for example, and you can move the funds to a card that charges a rate in the mid-20% range. While that rate would still be high, it could save you money in interest charges (not accounting for likely transfer fees of 5%), if the new issuer can provide a large enough credit line to absorb the transfer. Before you consider a balance transfer, however, it would be worth contacting your current card issuer to see if you can simply negotiate a lower rate.

How Long Does It Take To Rebuild Credit?

Correcting errors on your credit report can pay off within a matter of months. Other credit behaviors, like paying your bills on time, can take longer to improve your score. What’s more, some aspects of your credit history, such as any bankruptcies or charge-offs, can take up to a decade to disappear from your report. According to Experian, the following actions can have an impact on credit scores in these general time frames.

Time Requirement Activity
1-3 Months Corrected credit report mistakes
Repaying outstanding credit card and loan balances
1-2 Years
Hard credit inquiries (full credit checks following application for new credit)
7-10 Years
Late payments
Charged off accounts
Chapter 7 and 13 bankruptcy

Source: Experian Information Solutions

About Our List of Credit Cards for Bad Credit

To arrive at our list of best credit cards for bad credit we filtered our list of nearly 300 credit cards for cards that consider applications from people with credit scores below 600. From this list we then objectively chose the best cards in each subcategory based on their star ratings and feature quality.


Information Gathering

In order to track and assess the U.S. domestic credit card market, we gather scores of data points on more than 300 cards. This data is collected manually from both card-issuer websites and publicly available sources. 

To ensure our information is as up-to-date as possible, we deploy automated tools that monitor changes in such key data as annual percentage rates, introductory rates, introductory periods, bonus offers, rewards earnings rates, fees and card benefits. We then rapidly make any needed updates to our card listings, reviews, and recommendations to ensure that readers have the most reliable information and advice. 

Initial Scoring

Once we collect credit card data we organize it in our database according to features, which roll up into feature sets (such as rewards, interest, fees, benefits and Security/Customer Service). Each individual card feature is assigned a star rating score on a 1 to 5 scale using a formula. For instance, for a one-time bonus score we would use a formula like (if bonus is $500 or greater, then assign a score of 5; if $300-$499 then 4, and so forth). Weighting of scores. Once all of each card’s features have received a score we apply a weighting factor to each feature to arrive at a weighted average score for each card (according to the general category in which it resides, such as travel rewards). 

This weighting process allows us to assign significantly more emphasis to the attributes important to a particular category, and downplay those that are less relevant to it. That allows us to objectively identify cards that stand out in their category, and why they do. For example, we apply significantly higher weight to such travel-specific features as airport lounge access or primary rental car insurance than we do to attributes such as interest rates or fees that might be more strongly considered for other categories, such as balance-transfer cards.

Earnings rates

Another critical factor we consider when rating and ranking travel cards and other types of rewards cards are the cards’ effective earnings rates. We first calculate the average value of points or miles for all the rewards cards in our database, a painstaking process that entails collecting all airline fare data by carrier across scores of popular domestic and international city-pairs along with per-night hotel charges at all major hotel brands. 

The required points and miles for air travel or hotel stays from the various reward programs is then used to calculate an effective earnings rate for each card. That allows our readers to make the most informed choices. By putting a card’s large one-time bonus or earnings rates into context across many dimensions and card features, they can more readily weigh the card’s benefits relative to its costs. Uncovering the true but often opaque redemption value of rewards points or miles is, we feel, the only reliable way to make cogent choices among competing value-based cards.  

Card Features We Score

As mentioned in our methodology explanation, we place significant weight on certain travel-related features in determining our ratings for each card. Specifically, we place over 50% of our overall assessment score on the combination of the following factors:  

  • Maximum value of any one-time bonus, whether in points or miles.
  • Initial card spending required to earn any bonus.
  • Redemption value of the bonus miles or points.
  • Global card acceptance, as detailed by the four card networks (Visa, Mastercard, American Express and Discover).
  • Options to redeem points or miles with travel partners, both airline and hotel.

Another consideration are the cards’ coverage, if any, in these travel-related areas: 

  • Car-rental collision insurance, whether primary or secondary.
  • Travel accident insurance.
  • Lost or delayed luggage insurance.
  • Insurance for trip cancellation, interruption, or delay.
  • Cell phone loss or damage.
  • Roadside assistance and towing.
  • Emergency travel medical/dental benefits.

General, non-travel related features that we consider and score include:

  • Interest rates, including both introductory and regular APRs for purchases and balance transfers.
  • Fees, including those for annual membership, late payments, cash advances and foreign transactions.
  • Security/customer service features.
  • Other non-travel benefits, such as free credit scores, ID theft protection and contactless payment capability.

How We Reach Our Final Assessments

We rely mostly on the objective scores created by our rating algorithms to determine which card is chosen as the best travel rewards credit card, as well as the ones deemed best for one-time bonuses and as co-branded airline and hotel choices. 

However, we may make some adjustments from time to time, to both features and weightings that could affect rankings, which can be influenced by subjective input from our credit card experts. Any potential modifications will be consistent with Investopedia’s belief that consumers are best served by travel cards that:

  • Provide superior value in earning awards travel.
  • Charge reasonable interest rates in the event that balances are carried month to month.
  • Charge fewer and/or more reasonable fees.
  • Provide solid customer service, based on the number and quality of customer service features
  • Have helpful and protective security features.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Experian. "What Is a Good Credit Score?." Accessed Feb. 24, 2021.