Advertiser Disclosure

Having bad credit or a very limited credit history makes getting a credit card tough. But secured credit cards are generally easier to get, and in some cases, they can help you improve your FICO score enough to qualify for an unsecured card. With a secured card, you make a cash deposit, which the issuer holds as collateral in case you don’t pay your bill. The deposit reduces the issuer’s risk, which is why secured cards can be an option for those with bad credit.

Here are the Nerds’ favorite credit cards for people with bad credit:

Best for low deposit

Capital One® Secured MasterCard®

Apply Now on Capital One's secure website

Pros

  • Qualify with limited / bad credit
  • No annual fee
  • No foreign transaction fee

Cons

  • No rewards
  • High APR

Bonus Offer

You may qualify for a credit line increase based on your payment history and creditworthiness with no additional deposit required

Annual Fee

$0

Intro APR Promotions

None

APR

  • APR: 24.99% (Variable)

Card Details

  • 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
  • Free access to your credit score and learn how everyday decisions can affect your score using Capital One® Credit Tracker
  • Your minimum security deposit gets you a $200 credit line
  • You may qualify for a credit line increase based on your payment history and creditworthiness with no additional deposit required
  • 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

Minimum deposit of $49, $99 or $200, depending on your credit. You can pay the deposit over time. Reports to the major credit bureaus. Annual fee is $0.

Benefits of the Capital One® Secured MasterCard®:

  • You don’t have to make your collateral deposit all at once. You can pay in installments, as long as the deposit requirement is met within 80 days of account opening.
  • You may be able to get a credit line of $200 with a deposit of only $49 or $99, depending on your credit. Most secured cards set your credit line equal to your deposit.
  • Over time, you may qualify for a higher credit line without putting down an additional deposit, a rare opportunity among secured cards.
  • The card’s $0 annual fee is low compared with other secured cards.

Drawbacks of the Capital One® Secured MasterCard®:

  • This card has a high interest rate: The ongoing APR is 24.99% (Variable).
  • The Capital One® Secured MasterCard® card doesn’t offer a rewards program. This is common for secured cards, but it’s possible to find those perks elsewhere.

The bottom line:

The Capital One® Secured MasterCard® is an excellent choice for people who are short on cash but want to work on building or rebuilding their credit. It offers flexibility when it comes to making a collateral deposit, and responsible use of the card could score you a higher credit limit without having to cough up additional funds. Also, because the card is issued by a major bank, it may be easier to upgrade to one of the bank’s unsecured cards later.

Best for large deposit

Wells Fargo Secured Visa Card

Apply Now on Wells Fargo's secure website

Pros

  • Qualify with limited / bad credit

Cons

  • Has annual fee
  • No rewards
  • High APR

Bonus Offer

None

Annual Fee

$25

Intro APR Promotions

None

APR

  • Purchase: 18.99%, Variable
  • Cash Advance APR: 23.99%, Variable

Card Details

  • Low annual fee relative to other secured credit cards
  • $300-$10,000 credit limit, which ties to the size of your collateral deposit
  • A typical 25 day grace period

Access a credit line of up to $10,000, based on your deposit. Reports to the major credit bureaus. Comes with free online credit education. The annual fee is $25.

Benefits of the Wells Fargo Secured Visa Card:

  • Your credit line matches your deposit — from $300 up to $10,000. This is a very high maximum for a secured card, which makes it easier to keep your credit utilization ratio low.
  • The Wells Fargo Secured Visa Card’s annual fee is $25, low for a secured card.
  • Your account will be reviewed periodically, and if you show responsible use, you may be upgraded to an unsecured credit card from Wells Fargo.

Drawbacks of the Wells Fargo Secured Visa Card:

  • As of December 2015, Wells Fargo doesn’t offer free credit scores to its credit card customers. This can make it hard to track your progress toward a healthier score.
  • The Wells Fargo Secured Visa Card doesn’t offer a rewards program.
  • The interest rate is high: The ongoing APR is 18.99% Variable .

The bottom line:

The Wells Fargo Secured Visa Card should be your first choice if you have extra cash for the collateral deposit. A higher credit limit means you can use the card regularly and still keep your credit utilization ratio down, and it provides a bigger safety net in the event of an emergency. Also, this card’s annual fee is low given its benefits, another factor that makes it one of the Nerds’ top picks.

Best for military

Navy Federal nRewards Secured

Apply Now on Navy Federal Credit Union's secure website

Pros

  • Qualify with limited / bad credit
  • No annual fee

Bonus Offer

None

Annual Fee

$0

Intro APR Promotions

None

APR

  • Min APR: 8.99%, Variable
  • Max APR: 18.00%, Variable
  • Penalty APR: Up to 18.00%, Variable

Card Details

  • Earn 1 mile per $1 spent on purchases
  • One of the best secured cards out there
  • You get rewards, with no fees, which is highly unusual for a secured card
  • You can redeem 5,000 points at a time to receive a $50 gift card, effectively a 1% rewards rate
  • To join NavyFed, you must be currently employed by the DoD or have a DoD family member

Earn 1 point for every $1 you spend; points are worth as much as 1 cent each. Reports to the major credit bureaus. The annual fee is $0.

Benefits of the Navy Federal nRewards Secured:

  • The Navy Federal nRewards Secured earns rewards, which is very rare among secured credit cards.
  • The card’s annual fee is $0 — another unusual benefit for a secured credit card.
  • This card charges a comparatively low interest rate. The ongoing APR is 8.99% - 18% Variable

Drawbacks of the Navy Federal nRewards Secured:

  • Only members of Navy Federal Credit Union can get the Navy Federal nRewards Secured. You must be a Department of Defense employee (including military members) or the family member of a Department of Defense employee to join.
  • The card’s minimum deposit is $500, which is high compared with other cards.

The bottom line:

The Navy Federal nRewards Secured is undoubtedly the Nerds’ secured credit card of choice — if you meet the eligibility criteria for Navy Federal Credit Union membership. It has a low cost, offers rewards, and reports activity to the major credit bureaus. This is a rare trifecta of benefits.

Best for upgrading

US Bank Secured Card

Apply Now on US Bank's secure website

Pros

  • Qualify with limited / bad credit

Cons

  • Has annual fee
  • No rewards
  • High APR

Bonus Offer

None

Annual Fee

$29

Intro APR Promotions

None

APR

  • Purchase: 19.24%, Variable
  • Cash Advance APR: 24.24%, Variable

Card Details

  • Credit limit based on deposit, $300-$5k

Reports to major credit bureaus. Provides access to a credit limit of up to $5,000, based on your deposit. You may be eligible for an upgrade to an unsecured card in as little as 12 months.

Benefits of the US Bank Secured Card:

  • The US Bank Secured Card allows a credit limit of up to $5,000, if you’re able to provide that amount for a deposit.
  • U.S. Bank will evaluate your account after 12 months. If you’ve been responsible with your card, you may be eligible to upgrade to an unsecured card. This is a faster opportunity to transition to unsecured credit than many other cards provide.
  • The card’s annual fee is $29, which is low compared with many secured credit cards.

Drawbacks of the US Bank Secured Card:

  • As of December 2015, U.S. Bank doesn’t offer free FICO score access to secured credit card holders. This could make it hard to track your credit progress over time. (The bank does offer lesser-used TransUnion scores for free.)
  • The ongoing APR is 19.24% Variable — a pretty steep interest rate compared with some other options.

The bottom line:

This card is a first-rate choice if your main goal is to switch from a secured card to an unsecured card as quickly as possible. Since many secured cards force you to wait 18 months or more to transition, the US Bank Secured Card’s evaluation at 12 months could be a great opportunity for responsible cardholders.

Best for no annual fee

Digital Federal Credit Union Visa Platinum Secured Credit Card

Apply Now on Digital Federal Credit Union's secure website

Pros

  • Qualify with limited / bad credit
  • No annual fee

Cons

  • No rewards

Bonus Offer

None

Annual Fee

$0

Intro APR Promotions

None

APR

  • Purchase: 11.50%, Variable
  • Penalty APR: Up to 18.00%, Variable
  • Cash Advance APR: 11.50%, Variable

Card Details

  • No rewards offered

The annual fee is $0. Comparatively low interest rate. Reports to major credit bureaus. Digital Federal Credit Union membership is required, but you can join with a one-time donation to an eligible charity.

Benefits of the Digital Federal Credit Union Visa Platinum Secured Credit Card:

  • The card’s annual fee is $0. This is hard to find in secured credit cards. This credit union’s membership requirements are relaxed, which means nearly anyone can apply for the card.
  • The Digital Federal Credit Union Visa Platinum Secured Credit Card charges a comparatively low interest rate: The ongoing APR is 11.5% Variable .

Drawbacks of the Digital Federal Credit Union Visa Platinum Secured Credit Card:

  • This card doesn’t offer a rewards program.

The bottom line:

The Digital Federal Credit Union Visa Platinum Secured Credit Card is a primo choice if you don’t want to pay an annual fee but also don’t qualify for membership in Navy Federal Credit Union. It’s very cost-effective and will help you pump up your credit score because it reports to all three major credit bureaus.

Methodology

NerdWallet’s credit cards team selects 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 win in multiple categories.  

Last updated January 14, 2016.

Kevin Cash is a staff writer at NerdWallet, a personal finance website. Email: kcash@nerdwallet.com. Twitter: @kevin_cash.