The best credit cards for people with bad credit are secured cards. These cards require a cash security deposit, which will usually be equal to your credit line. Using a secured card regularly and responsibly can help you build credit and qualify for a regular unsecured card. When you close a secured card, or convert it to an unsecured card, the issuer refunds your security deposit. Learn more about secured cards.

In addition to our picks for the best credit cards for bad credit, in this article we’ve also rounded up some other options that might be worth a look depending on your situation, as well as some cards to avoid.

Our pick for

Low deposit

Capital One® Secured Mastercard®

Capital One® Secured Mastercard®

Apply Now on Capital One's secure site

Intro APR Promotions

N/A

APR

  • APR: 24.99% Variable APR
  • Cash Advance APR: 24.99%, Variable

Annual Fee

$0

Bonus Offer

None

  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide
Annual fee
$0
Ongoing APR
24.99%
APR, Variable
Recommended credit score
350
629
Poor
We like it for
No annual fee Flexible deposit requirement Chance of higher credit line

Benefits

Most secured cards typically require you to make a deposit equal to your credit line, and you have to come up with the whole deposit upfront. With the Capital One® Secured Mastercard®, however, you can get a credit limit of $200 for a deposit of $49, $99 or $200, depending on the state of your credit. You can also make your deposit in installments. If you make your first five payments on time, you may be eligible for a higher credit line without depositing additional money.

Drawbacks

Bottom line


Our pick for

No credit check

OpenSky® Secured Visa®

OpenSky® Secured Visa®

Apply Now on Capital Bank's secure site

Intro APR Promotions

N/A

APR

  • Purchase: 18.39%
  • Penalty APR: Up to 22.50%
  • Cash Advance APR: 18.39%

Annual Fee

$35

Bonus Offer

None

  • No credit check necessary
  • Low annual fee, no applications fees a highly competitive APR
  • Your credit limit is determined by the security deposit you provide
Annual fee
$35
Ongoing APR
18.39%
APR
Recommended credit score
350
689
Poor - Average
We like it for
Easier approval No credit check Unbanked consumers

Benefits

Unlike most other secured cards, the OpenSky® Secured Visa® doesn’t require a credit check, so even people with badly damaged credit may be able to qualify. (You’ll still need to meet income standards, however.) Also setting this card apart from other secured cards: You don’t need a bank account. You can make your deposit and pay your bill by debit card, wire transfer, check or money order.

Drawbacks

Bottom line


Our pick for

Rewards and upgrading

Discover it® Secured Card - No Annual Fee

Discover it® Secured Card - No Annual Fee

Apply Now on Discover's secure site

Intro APR Promotions

10.99% on Balance Transfers for 6 months

APR

  • APR: 23.99% Variable APR
  • Cash Advance APR: 25.99%, Variable

Annual Fee

$0

Bonus Offer

Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.

  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • Your Secured Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
  • We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
  • Earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases.
  • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • New! Free Social Security Number alerts, we’ll monitor thousands of risky websites when you sign up.*
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
Annual fee
$0
Ongoing APR
23.99%
APR, Variable
Recommended credit score
350
629
Poor
We like it for
No annual fee Cash-back rewards Clear upgrade process

Benefits

The Discover it® Secured Card - No Annual Fee may be the best credit card available for people with bad credit. Not only does it have an annual fee of $0, but it also gives rewards: 2% cash back on up to $1,000 worth of spending per quarter on restaurants and gas, and 1% on all other spending. Handle your account responsibly for eight months, and Discover will review your account for a possible upgrade to an unsecured card.

Drawbacks


Our pick for

Low interest and fees

Digital Federal Credit Union Visa Platinum Secured Credit Card

Digital Federal Credit Union Visa Platinum Secured Credit Card

Apply Now on Digital Federal Credit Union's secure site

Intro APR Promotions

N/A

APR

  • Purchase: 12.50%
  • Penalty APR: Up to 18.00%
  • Cash Advance APR: 12.50%

Annual Fee

$0

Bonus Offer

None

  • Secured card rates well below the national average
  • Borrow against your DCU savings account
  • No Annual Fee*
  • No Fees or Higher Rates for Cash Advances and Balance Transfers
  • Works with Apple Pay®, Android Pay™, and Samsung Pay
  • Insurance, car rental, travel, and warranty benefits
  • Optional Overdraft Protection On Your DCU Checking
  • Buy online easily and safely with Visa Checkout
  • Embedded EMV chip to protect your card information
Annual fee
$0
Ongoing APR
12.50%
APR
Recommended credit score
350
850
Poor - Excellent
We like it for
Lower ongoing APR No annual fee No cash advance fee No balance transsfer fee High credit limit

Benefits

The ongoing APR is 12.50%. That’s roughly half the rate of many popular secured cards — and better than what you can get on many unsecured cards. The annual fee is $0, and there are no balance transfer or cash advance fees. As with most secured cards, you have to make a security deposit equal to your credit limit, but this one doesn’t put a cap on how much you can deposit, and therefore how high your limit can be.

Drawbacks

Bottom line



OTHER GOOD OPTIONS


The cards listed above are the best of the best, but they aren’t the only good options available. Several other credit cards for bad credit may be worth a look, depending on your situation.

Citi® Secured Mastercard®

The Citi® Secured Mastercard® is a pretty basic card, but there’s nothing wrong with that. The annual fee is $0. The ongoing APR is 23.49% Variable APR. The minimum deposit is $200; the maximum is $2,500. According to Citi’s website, a bankruptcy within the past two years will prevent you from qualifying for this card.

FIRST PROGRESS SECURED CREDIT CARDS

First Progress secured credit cards are “designed for customers who may have had credit issues in the past and need to re-build credit or who are just starting out and need to build new credit,” according to the issuer. There is no minimum credit score required, and you can qualify even if you have no credit file. You can choose from among three cards, differentiated by their annual fees and interest rates — the lower the APR, the higher the annual fee. First Progress says the same approval standards apply for all three cards. Your security deposit determines your credit line, with a minimum of $200 and a maximum of $2,000. The cards are:

  • Platinum Elite: The annual fee is waived the first year and $29 every year thereafter. The ongoing APR is 19.99% Variable.
  • Platinum Select: The annual fee is waived the first year and $39 every year thereafter. The ongoing APR is 14.99% Variable.
  • Platinum Prestige: The annual fee is waived the first year and $44 every year thereafter. The ongoing APR is 11.99% Variable.

In general, NerdWallet recommends that all credit card holders pay their balance in full each month to avoid paying interest. If you expect to be able to do that, then go with the card with the lowest annual fee. If you expect to carry a balance from month to month, go with a lower APR. One other note: As of February 2017, First Progress Cards were not available to residents of Arkansas, Iowa, New York or Wisconsin.

BankAmericard Secured Credit Card

Two things about the BankAmericard Secured credit card make it stand out. First, it allows for a fairly high credit line: The maximum deposit is $4,900 (minimum $300). This makes it a good option for those who have damaged credit but a lot of money available. Second, if you use your card responsibly for 12 months, Bank of America® will review your account and might return your security deposit while allowing you to continue using the card. The annual fee is $39. The ongoing APR is 20.99% Variable.

Wells Fargo Secured Visa Card

The Wells Fargo Secured Visa Card has been a Nerd favorite for its high potential credit limit — minimum $300, maximum $10,000. Like the BankAmericard Secured credit card, it’s a good option for someone with bad credit but a lot of cash available for a security deposit. Wells Fargo says responsible credit use can help you graduate to an unsecured card, although it doesn’t set a time frame for upgrading. The annual fee is $25. The The ongoing APR is 19.99% Variable.


CREDIT CARDS TO AVOID


Many credit cards that are marketed to people with bad credit are expensive. These cards might not require a security deposit, but they impose an array of steep fees just for the privilege of carrying and using them. These can include application fees, processing fees, activation fees and monthly “maintenance” or “membership” fees, in addition to annual fees.

Add up those fees, and they can easily cost you more over the first couple of years than the deposit on a good secured credit card — and, unlike a security deposit, the fees you pay are money you’ll never get back. These cards can even cost more to carry than some of the best rewards credit cards on the market. Their ongoing interest rates tend to be high as well.

NerdWallet recommends you steer clear of products like these:

FIRST PREMIER BANK CREDIT CARD

The fees on the First Premier Bank Credit Card are truly eye-popping. For starters, there’s a $95 processing fee before you even get your card. Then there are ongoing fees that depend on your credit limit. For example:

Fees in first year Fees second year and beyond
Credit limit Annual Maintenance Annual Maintenance*
$300 $75 $0 $45 $75
$400 $100 $0 $45 $75
$500 $125 $0 $49 $124.80
*Maintenance fees are billed monthly: $6.25 per month = $75 per year; $10.40 per month = $124.80 per year

This convoluted fee structure owes its existence to a provision of federal law. Under the Credit Card Act of 2009, the fees on a credit card in the first year the account is open can’t exceed 25% of the credit limit. Processing fees are charged before you open the account, so they don’t count against the 25% cap. After the first year, there are no limits, so that’s when monthly maintenance fees kick in. As a result, you’ll pay between $120 and nearly $175 a year in fees for this card. On top of it all, the APR on this card was 36% as of February 2017 — one of the highest interest rates on any card.

HORIZON GOLD CARD

The banner across the top of this card’s website reads: “Bad Credit, No Credit? Low Score? NO PROBLEM.” In reality, though, there are multiple problems. The Horizon Gold card advertises an unsecured $500 credit limit, but you might have to read the website carefully to recognize that it’s simply a store card that you can use at just one place: the Horizon Outlet online mall. The “membership” fees required to use this card come out to nearly $300 a year, and there’s even a one-time $5 “issuance and account validation fee” just to get the card. This card’s issuer, Horizon Card Services, offers several other cards, all of which can be used only at the Horizon Outlet. They include the NetFirst Platinum card, the Freedom Gold, the Merit Platinum and the Group One Platinum.

CREDIT ONE CREDIT CARDS

Credit One Bank — not to be confused with Capital One — specializes in credit cards for those with less-than-great credit. Its offerings include the Cash Rewards Visa Card and the Platinum Visa for Rebuilding Credit, as well as the Official NASCAR Visa. The Credit One website is maddeningly vague about what kind of card you’ll end up with if you apply. For example, your annual fee could be anywhere from $0 to $75 in the first year and $0 to $99 after that. You may or not get a grace period. You might get rewards on all purchases, or only some, or none. There are also complicated, confusing rules on when your payments will post and when your available credit line is refreshed after making a payment. Our recommendation: Don’t bother trying to figure it out, and don’t bother applying.

Surge Card
Matrix card

As of February 2017, these cards were charging a $125 annual fee in the first year for a minimum credit line of $500 — 25% of the credit limit, the legal maximum. In the second year, the annual fee drops to $96 — but you start paying $10 a month in maintenance fees, for total fees of $216 a year. The APR, meanwhile, was a whopping 30.49% as of February 2017. The Surge Card and Matrix Card are offered by Continental Finance. That company has several other cards with similarly jaunty names and the same janky terms: the Reflex Card, the Fit Card and the Verve Card.

TOTAL VISA

Like the First Premier Bank Credit Card, the Total Visa starts laying on fees before you even open your account. If you apply and are approved, you must first pay an $89 processing fee to get your card. The annual fee in the first year is $75. In the second year and beyond, the annual fee drops to $48 — but you start paying a monthly processing fee of $6.25, which comes out to $75 a year. Put them together, and the Total Visa card will cost you $164 in the first year and $123 every year thereafter. To top it off, this card’s APR as of February 2017 was 29.99%.

INDIGO PLATINUM MASTERCARD

According to the website for this card, the annual fee depends on a cardholder’s creditworthiness. It might be $0, it might be $59, or it might be $75 the first year and $99 every year thereafter. Which one will you pay? You have to apply to find out for sure. It’s safe to say, though, that people with bad credit are more likely to end up with a $75/$99 fee than a $0 fee. Even $59 is significantly more than you would pay in annual fees on a good secured card. The APR on the Indigo Platinum as of February 2017 was 23.90%. That’s high but within the typical range for a credit card for bad credit. You can do worse than this card — but you can also do much better.

MILESTONE GOLD MASTERCARD

The Milestone Gold is offered by Genesis Bankcard Services, the same company that’s behind the Indigo Platinum. It, too, has fees that depend on creditworthiness: $35 a year, $59 a year, or $75 in the first year and $99 in subsequent years. Adding a layer of confusion, the first year’s fee might be divided between an “account opening fee,” which you pay before the account goes live, and an “annual fee,” which you pay afterward. This may be a way to avoid running afoul of the 25% rule. The APR is the same as on the Indigo Platinum, and our general assessment is the same: not the worst card, but far from the best.

Methodology

NerdWallet’s credit cards team selects the best cards in each category based on overall consumer value. Factors in our evaluation include fees, promotional and ongoing APRs, and sign-up bonuses; for rewards cards, we consider earning and redemption rates, redemption options and redemption difficulty. A single card is eligible to be chosen in multiple categories.

Last updated March 3, 2017.

Paul Soucy is an editor at NerdWallet, a personal finance website. Email: paul@nerdwallet.com. Twitter: @paulsoucy.