Below are the best secured and unsecured credit cards for bad credit scores. These offers can help build or rebuild a low credit score, and many require no deposit to apply.
Unlike a prepaid card, there is regular reporting to the 3 major credit bureaus
Accepted at millions of locations worldwide
Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line
Access to an authorized bank account is required to make your $49, $99 or $200 refundable security deposit
Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%
Unlimited 1% cash back on all other purchases
A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account
Access your FICO® Score updated monthly for free, within your Mobile Banking app or in Online Banking
Optional overdraft protection option helps prevent declined purchases, returned checks or other overdrafts when you link your eligible Bank of America® checking account to your credit card. Transfer fees may apply.
A secured credit card designed to help establish, strengthen or rebuild credit
A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account
Access your FICO Score updated monthly for free within your Mobile Banking app or in Online Banking
Your account will periodically be reviewed, and, based on your overall credit history (including other credit cards and loans), you may qualify to have your security deposit returned. Not all customers will qualify.
Citi® Secured Mastercard® is an option for customers with little or no credit history and can help you build your credit when used responsibly
Unlike a debit card, Citi® Secured Mastercard® is a real credit card that helps build your credit history with monthly reporting to all 3 major credit bureaus
Once available, you will also have free access to your FICO score online. Tracking your score is a great first step to managing your credit history and taking control of your financial future.
A minimum security deposit of $200 is required for this product
Brink’s gives you the peace of mind you deserve. Securing cash and valuables since 1859.
With Brink’s Direct Deposit, you can get paid faster* than a paper check.
No late fees or interest charges because this is not a credit card.
Use the Brink’s Money Prepaid Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply.)
*Card issued by Republic Bank & Trust Company, Member FDIC. Card may be used everywhere Mastercard Debit cards are accepted. “Apply Now” for full details.
See additional Brink’s Prepaid Mastercard® Details.
See if you Pre-Qualify in less than 60 seconds—without affecting your credit score. It's fast, easy, and secure.
Earn 1% cash back rewards on eligible gas, grocery purchases and mobile phone, internet, cable and satellite TV services. Terms apply.
This is a fully functional, unsecured credit card—not a debit card, prepaid card, or secured credit card with deposit requirements.
Credit One Bank evaluates every account for credit line increase opportunities. We'll let you know as soon as you're eligible for a higher credit line.
Take advantage of free online access to your Experian credit score and credit report summary so you can track the key factors impacting your credit health. Terms apply.
Zero Fraud Liability protects you if your card is ever lost or stolen. Rest easy knowing you won't be held responsible for unauthorized charges.
Enjoy FREE withdrawals at over 30,000 MoneyPass® ATM locations nationwide. You can also use non MoneyPass® ATMs, but fees may apply
Get access to your money up to 2 days faster with early Direct Deposit
With Serve, you can pay anyone, anytime. Use FREE Online Bill Pay or Write a Check online and we'll mail it to anyone you need to pay.
Check your balance and recent transactions, pay bills on the go, add checks, get SMS text alerts, and send money to family or friends who have a Serve Account
No credit check, no minimum balance, no hidden fees
Transfer cash to anyone from anywhere. Cash is ready for pickup in minutes.
Choose your own credit line based on how much money you want to put down as a security deposit.
Initial deposits can be from $200 to $3,000. You can increase your credit line at any time by adding additional money to your security deposit, up to $3,000.
After 9 months, we review your account for a credit line increase. No additional deposit required!
Secured Credit Cards are great for people looking to build or rebuild credit and are available to people with all kinds of credit backgrounds.
Unlike a debit card or a pre-paid card, it helps build your credit history. As you pay your bill every month, we report to all three major credit-reporting agencies.
Get 100% U.S.-based customer service & get your FICO® Credit Score for free each month.
Get your paycheck up to 2 days faster with free direct deposit
Cash your checks to your Account with the Bluebird Mobile app. Access your money in minutes for a fee or in 10 days for free if your check is not returned unpaid.
Enjoy Card Membership benefits such as Purchase Protection and Fraud Protection when making purchases online or in store with Bluebird
Get free ATM access at over 30,000 MoneyPass® ATM locations. You can also pick up cash at over 4,500 Walmart® stores with Cash Pickup Powered by Ria®.
Earn 1 point for every dollar spent. For every 2,500 points you earn, you can redeem them for $25 toward all your favorite Harley® gear, accessories, service, and more.
You can apply directly for the Harley-Davidson® Visa Secured card if you're looking to build or re-establish your credit. Your account will be considered for an upgrade to an unsecured card after 12 months of responsible use.
Minimum security deposit of $300 required to open an account, up to $5,000.
Mango is a safe and convenient way to manage and access your money when and where you need it
The Mango Card is a prepaid card account and there are no hidden fees or interest charges. See your Cardholder Agreement for fees and details.
You can use your Mango Card everywhere debit Mastercard is accepted
Manage your account anywhere you are. Securely check your balance, transaction history, and send money to friends and family.
Once you activate and load your Mango Card, you can open a Savings Account with as little as $25 and get up to 6.00% Annual Percentage Yield with up to 6 transfers out each month
Brink’s gives you the peace of mind you deserve. Securing cash and valuables since 1859.
With Brink’s Direct Deposit, you can get paid faster* than a paper check.
No late fees or interest charges because this is not a credit card.
Use the Brink’s Money Prepaid Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply.)
*Card issued by Republic Bank & Trust Company, Member FDIC. Card may be used everywhere Mastercard Debit cards are accepted. “Apply Now” for full details.
See additional Brink’s Prepaid Mastercard® Details.
Enjoy FREE withdrawals at over 30,000 MoneyPass® ATM locations nationwide. You can also use non MoneyPass® ATMs, but fees may apply
Get access to your money up to 2 days faster with early Direct Deposit
With Serve, you can pay anyone, anytime. Use FREE Online Bill Pay or Write a Check online and we'll mail it to anyone you need to pay.
Check your balance and recent transactions, pay bills on the go, add checks, get SMS text alerts, and send money to family or friends who have a Serve Account
No credit check, no minimum balance, no hidden fees
Transfer cash to anyone from anywhere. Cash is ready for pickup in minutes.
Get your paycheck up to 2 days faster with free direct deposit
Cash your checks to your Account with the Bluebird Mobile app. Access your money in minutes for a fee or in 10 days for free if your check is not returned unpaid.
Enjoy Card Membership benefits such as Purchase Protection and Fraud Protection when making purchases online or in store with Bluebird
Get free ATM access at over 30,000 MoneyPass® ATM locations. You can also pick up cash at over 4,500 Walmart® stores with Cash Pickup Powered by Ria®.
Mango is a safe and convenient way to manage and access your money when and where you need it
The Mango Card is a prepaid card account and there are no hidden fees or interest charges. See your Cardholder Agreement for fees and details.
You can use your Mango Card everywhere debit Mastercard is accepted
Manage your account anywhere you are. Securely check your balance, transaction history, and send money to friends and family.
Once you activate and load your Mango Card, you can open a Savings Account with as little as $25 and get up to 6.00% Annual Percentage Yield with up to 6 transfers out each month
Unlike a prepaid card, there is regular reporting to the 3 major credit bureaus
Accepted at millions of locations worldwide
Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line
Access to an authorized bank account is required to make your $49, $99 or $200 refundable security deposit
Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%
Unlimited 1% cash back on all other purchases
A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account
Access your FICO® Score updated monthly for free, within your Mobile Banking app or in Online Banking
Optional overdraft protection option helps prevent declined purchases, returned checks or other overdrafts when you link your eligible Bank of America® checking account to your credit card. Transfer fees may apply.
A secured credit card designed to help establish, strengthen or rebuild credit
A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account
Access your FICO Score updated monthly for free within your Mobile Banking app or in Online Banking
Your account will periodically be reviewed, and, based on your overall credit history (including other credit cards and loans), you may qualify to have your security deposit returned. Not all customers will qualify.
Citi® Secured Mastercard® is an option for customers with little or no credit history and can help you build your credit when used responsibly
Unlike a debit card, Citi® Secured Mastercard® is a real credit card that helps build your credit history with monthly reporting to all 3 major credit bureaus
Once available, you will also have free access to your FICO score online. Tracking your score is a great first step to managing your credit history and taking control of your financial future.
A minimum security deposit of $200 is required for this product
Choose your own credit line based on how much money you want to put down as a security deposit.
Initial deposits can be from $200 to $3,000. You can increase your credit line at any time by adding additional money to your security deposit, up to $3,000.
After 9 months, we review your account for a credit line increase. No additional deposit required!
Secured Credit Cards are great for people looking to build or rebuild credit and are available to people with all kinds of credit backgrounds.
Unlike a debit card or a pre-paid card, it helps build your credit history. As you pay your bill every month, we report to all three major credit-reporting agencies.
Get 100% U.S.-based customer service & get your FICO® Credit Score for free each month.
Earn 1 point for every dollar spent. For every 2,500 points you earn, you can redeem them for $25 toward all your favorite Harley® gear, accessories, service, and more.
You can apply directly for the Harley-Davidson® Visa Secured card if you're looking to build or re-establish your credit. Your account will be considered for an upgrade to an unsecured card after 12 months of responsible use.
Minimum security deposit of $300 required to open an account, up to $5,000.
The credit card offers that appear on this site are from credit card companies from which CardRates.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CardRates.com does not include all credit card companies or all available credit card offers.
Review Breakdown: Credit Cards for Bad Credit
Looking for an unsecured credit card, but have a poor credit history? The following summary table breaks down all the top credit cards for people with a low credit score, including secured, prepaid, and unsecured offers. Simply click the name of the card that interests you to visit the issuer's official site and apply online.
Although having bad credit can be difficult — a poor credit score can impact everything from getting a credit card to getting an apartment — it isn't a permanent problem. With time and hard work, bad credit can be conquered. The first step is learning all you can about bad credit and how to defeat it.
Obtaining one of the best credit cards for bad credit can help you improve your credit score when you use the card responsibly, such as making on-time payments and keeping your balance low. But let’s start by explaining how these cards work and what you should expect as a cardholder.
1. What is a Bad Credit Score?
A so-called “bad” credit score is a score that’s so low most lenders won’t extend new credit due to the risk involved. But for all intents and purposes, a bad credit score is technically defined as anything below 580, according to FICO, the credit score used most by lenders to determine creditworthiness.
There’s no one credit score that all lenders use all the time for all of their lending decisions. Rather, there are countless scoring models and types of scores. What these scores have in common is that they’re all based on the information in your credit reports.
Most people have three credit reports, which are compiled by the three major credit bureaus: Equifax, Experian, and TransUnion. Each of your reports contains information about how much credit you have and how responsibly (or not) you’ve used that credit.
In essence, your credit score is simply a numerical representation of the information in the credit reports on which it is based.
Scores exist so lenders, including card issuers, can get a quick snapshot of your credit without having to read your reports line by line. Scores enable lenders to automate the approval process for loans and cards since computers can understand numbers much easier than they can read written reports.
The term “bad credit” generally describes a credit report that shows a pattern or history of high-risk credit behaviors, such as:
Paying bills late
Skipping payments
Maxing out credit cards
Defaulting on loans
Having accounts sent to collections
Having a vehicle repossession, mortgage foreclosure, or bankruptcy
A credit report with these types of activities produces a low credit score.
The FICO score is the credit score that lenders use most often. The company that invented this score, Fair Isaac, Corp., says 90% of top lenders use it to help them make billions of credit-related decisions each year.
Different credit scores use different numerical ranges. Most FICO scores range from 300 to 850. A lower score equates to worse credit habits.
The higher score equates to better credit habits. The average credit score in America is just over 700.
A higher score doesn’t necessarily mean you’ll be a lender or credit card company’s best customer. It only means you’re more likely to be a good credit risk (i.e., you’ll repay your debts and make your payments on time).
Whether your score is good or bad depends in part on the lender’s objectives. Some lenders prefer high-quality, i.e., excellent credit customers whose very high scores make them less risky from the lender’s point of view.
Other lenders cater to people who have fair or poor credit scores. Most major banks offer credit cards and other financial products to people in a range of credit categories.
As Fair Isaac explains, “Each lender has its own strategy, including the level of risk it finds acceptable for a given credit product. There is no single ‘cutoff score’ used by all lenders.”
2. What Causes Bad Credit?
The primary cause of bad credit is not paying your bills on time — or at all. Creditors want to know you’ll repay your debts, so a history of late or missed payments is an instant sign of bad credit habits.
Your credit score reflects this as well since your payment history is 35% of your FICO credit score.
Even a single delinquent payment after years of responsible credit use can damage your scores, and a recent history or pattern of late or missed payments will drop your score by dozens of points. Serious credit problems, like a recent repossession, foreclosure, or bankruptcy can also depress your scores.
Credit scoring algorithms are highly complex. Consequently, there are also other, more nuanced reasons why your score might drop.
For instance, you may be using more of the credit you have available or you may have applied for multiple new credit lines or loans within a short period of time.
Both of these activities can hurt your scores because they suggest that you may be experiencing financial difficulties and could have problems paying future bills on time.
Your recent credit behavior affects your scores more than older behavior. That means that if your credit is impaired, you can improve it by adopting better credit habits and building a better, more recent track record of using credit responsibly.
Over time, your credit mistakes will drop off your report and stop depressing your scores. For most negative accounts, it takes seven years for an item to fall off your credit reports, though some bankruptcies can take longer.
3. How Does a Credit Card for Bad Credit Work?
A credit card for bad credit is a traditional credit card that is designed for consumers who have poor credit scores. It’s important to note that you don’t start off with a poor credit score — poor credit is the result of past financial mistakes — and the credit card offers you’ll qualify for are a reflection of that.
This means you’ll be charged higher interest rates than someone who has good or excellent credit. In fact, the typical APR for someone who has bad credit can average over 25%, and be even higher for store credit card accounts.
But a credit card for bad credit works just like any other credit card and no one will be none the wiser to the fact that your card is designated for someone whose credit rating is less-than-stellar. And there are all kinds of credit cards for bad credit — you can get a business credit card, a student credit card, a store credit card, and even a cash rewards credit card with a low credit score.
These types of cards aren’t meant to be in your wallet forever, though. They’re designed to help cardholders improve their scores with on-time payments and responsible spending, after which you can graduate to a card with more favorable terms, which leads us nicely to our next question…
4. How Can Credit Cards Help Rebuild Your Credit?
The best way to improve your credit is to use various forms of credit responsibly to build a good credit history that will be reflected in your credit scores. Since credit cards are a form of credit, using them responsibly can help boost your scores.
Here are four tips for building credit with a credit card:
Make all of your card payments on time
Don’t max out any of your cards
If you’re using more than 30% of the total credit you have available, try to lower your card balances
Don’t close card accounts unless a card has an annual fee you’re no longer willing to pay or a card is secured by a deposit and you’ve improved your credit enough to qualify for an unsecured card
One simple way to use a credit card to build your credit history is to use it for a single recurring charge, such as the monthly charge for a streaming service. Don’t use the card for any other purchases.
Then, set up automatic credit card payments through your bank account so that the card is paid in full shortly after the recurring charge hits your account. This way, you won’t miss any payments and will build positive payment history over time.
5. What is Credit Utilization & How Does it Affect Your Credit Score?
is a ratio that compares how much credit you’re using with how much credit you have available to use. Imagine you have three credit cards with limits as shown in the table below.
If you charge $500 on Card A, your credit utilization ratio for that card would be $500 / $2,000 = .25, or 25%.
However, scoring models also factor in your overall credit utilization, which would be the ratio of your total credit limits to your total credit card debt.
A lower ratio means you’ve used less of the credit you have available. That’s a good credit habit that can help your scores.
A higher ratio means you’ve used more of the credit you have available. That’s a poor credit habit that can hurt your scores.
If you’ve been turned down for a loan or card due to high credit usage, your credit utilization ratio may be the problem. To fix it, pay off some of your revolving debt to improve your utilization rate.
6. How Long Does It Take To Rebuild Your Credit Scores?
if you’re willing to adopt better credit habits. But repairing your credit is never a quick fix and can take several months to see drastic improvement.
The best advice for rebuilding your credit is to responsibly manage it over time and watch your score rise little by little. Here are seven ways to start rebuilding credit:
Catch up on any recent missed or late payments
Set up payment reminders to help you pay your bills on time
Lower your credit utilization ratio by paying off debt
Don’t close card accounts for no reason
Don’t apply for new cards that you don’t need
Don’t obsess about any one factor that influences your scores
Be patient
You don’t need an 800-plus score to get good credit offers. Even a modest improvement in your low or middling scores could pay off in better credit opportunities like lower rates and higher limits.
7. Do Credit Cards for Bad Credit Report to the Major Credit Bureaus?
It’s a hard fact for consumers who are trying to rebuild their credit, but not all card companies report all their customers’ payments to each major credit bureau every month.
Instead, reporting practices vary from one card company to the next. Most major banks report. Some very small banks or credit unions might not report. Among those that do report, the frequency and timing of their reporting may vary as well.
One way to find out which of your cards is reported is to get copies of your reports and read them yourself. They’re not difficult to understand.
You’re entitled by federal law to one free copy of each report annually. You can request your free reports at AnnualCreditReport.com. Keep in mind that card companies can change their practices so a card that’s currently reported might not be reported in the future and vice versa.
Another option is to call your card issuers and ask whether your payments are reported, and if so, to which of the three bureaus and how often. Some companies post this information on their website as well.
If a card appears to be missing from one or more of your credit reports, there are four possible reasons:
The company doesn’t report to one or more of the bureaus
It could be a mistake
It could be a technical glitch
The card company changed its name or is going through a merger with another company
Since credit reporting is voluntary, the bureaus cannot force your card company to report your payments. You can ask, but your request isn’t likely to change your card company’s policy. You can’t self-report your payments.
A card that’s not shown on your credit report won’t help you improve your credit scores.
8. What is a Secured Credit Card?
A secured credit card is one that requires a cash deposit to secure any charges that you make with the card. If you miss a payment, the card company can deduct it from your deposit.
The deposit might be equal to your credit limit or it might be a lower amount. Some cards allow a higher limit with a deposit of a few hundred dollars.
Secured cards look just like any other card. No one but you will know you’re using a secured card to rebuild your credit unless you choose to share that information.
Some secured cards can be converted into an unsecured card if you make your payments consistently over time. When you convert your card, your deposit should be returned to you in full.
Some secured cards have an annual fee. Others don’t. Some come with a cash back or rewards program. Others don’t. Some charge higher annual percentage rates (APRs) and fees. But again, others don’t. In fact, some secured cards offer significantly lower APRs than unsecured cards.
A secured card that reports your payments to at least one of the three major credit reporting bureaus can help you boost your credit scores if you make your payments on time.
It’s smart to shop around, compare offers, and read the fine print before you choose a secured card — or any card.
9. What Is an Unsecured Credit Card?
An unsecured card is one that doesn’t require a cash deposit. You’ll typically need excellent, good, or fair credit to qualify for this type of card.
Unsecured cards for people with poor credit tend to have high APRs and fees to compensate the card company for the higher risk.
Most unsecured cards charge a variable APR, which means your interest will change along with the Federal Prime Rate. Fix-rate APR cards are hard to find, and are usually associated with secured accounts or cards from credit unions.
10. What Is a Subprime Credit Card?
Subprime cards are typically marketed to people who have a poor credit history and low credit score. Consumers with a limited credit history or a “thin” credit file may also turn to subprime credit cards to establish and build credit, though they may have other options (such as a secured credit card or a credit builder account).
Subprime cards tend to have higher APRs, higher fees, lower credit limits, and fewer perks than prime, or “regular,” cards. But not every subprime card suffers from all (or any) of these negatives. Some cards may be weak in one or more areas, but still a good value in other ways.
A credit score below 600 will typically mean being stuck with a bad-credit subprime card. But there’s no one score that all card companies define as “subprime.”
Rather, companies set their own standards for these cards. Some may have a higher cutoff, while others may accept lower scores.
Subprime cards may sound less appealing than regular cards, but the subprime variety can help you establish a credit history or raise a low credit score. By charging small amounts each month and always making your minimum payment (but, ideally, more) on time, you can demonstrate responsible use of credit with a subprime card.
11. Do Secured Credit Card Issuers Check Your Credit Report?
The short answer is some do and some don’t. It just depends on the card company’s practices and policies.
Cards that are advertised as “no credit check required” are usually designed for people who have poor credit. Instead of a hard credit check, the company may consider your income or employment history to decide whether to approve you for this type of card.
Cards that are advertised as “no credit needed” are usually intended for people who don’t have a credit history, such as young adults. If you apply and your credit is poor, you may be declined.
If your credit is so-so, a credit check could work in your favor. You may be approved and upgraded to an unsecured card or approved for a secured card with a higher limit, lower deposit, lower APRs, no annual fee, or better cash back or rewards program.
12. Do Secured Credit Cards Allow You to Make Cash Advances?
Some secured cards will allow you to take a cash advance, but it will vary by card. You can check your cardholder agreement to see if your credit card allows cash advances.
You’ll need to contact your issuer to establish a cash advance PIN for your credit card before you can use it for a cash advance. Once you have a PIN, you can typically obtain money at any qualifying ATM or by going to an eligible bank branch to speak with a teller.
With the majority of credit cards, you’ll be charged a fee for this privilege. A fee of $10 or 3% of the cash amount, whichever is higher, is common, though some cards charge more or less than that. Cash advances are also typically charged a higher interest rate than other transactions, and cash advances don’t qualify for a grace period on interest.
There are two ways to get cash with a secured card without paying a fee. One way is to go with a card that doesn’t charge a cash advance in the first place; this will likely have to be a card from a credit union.
The other way to get cash from your secured card is to recover your deposit. Unfortunately, the only two ways to do this is to graduate your account to an unsecured card (if your card allows upgrades, as the Secured Mastercard® from Capital One does, and you’re qualified to do so) or to pay off your balance and close your account.
Either way, your deposit should be refunded, giving you access to that cash.
13. Are there Cards with No Annual Fee for People with Bad Credit?
Most subprime cards charge an annual fee. The vast majority of cards for bad credit without an annual fee are secured cards or cards from credit unions.
If you’re willing to pay an annual fee for a subprime card, look for one that gives you an offsetting benefit, such as lower APRs, lower fees, a cash back or rewards program, or a higher credit limit.
14. Can You Get a Rewards or Cash Back Credit Card with Bad Credit?
Yes, you can. But keep in mind that a subprime rewards card may also come with higher APRs, higher fees, or both. Rewards cost banks money, so they often charge cardholders more to compensate for the rewards they payout. Even someone with an excellent credit score will pay a high annual fee for a card with the very best rewards.
Read the disclosures before you decide whether the cash back or rewards program is a good tradeoff for the other terms the card offers.
15. What Is a Debt-to-Income Ratio & How Does It Impact Your Credit Card Limit?
Court-ordered alimony or child support that you receive
Other income that you receive on a regular basis
Similarly, your monthly debt payments include any payments you are obligated to make each month. This includes things like rent or mortgage payments, car loan payments, student loan payments, court-ordered alimony or child support, minimum credit card payments, or any other regular payments.
Calculating DTI can be complicated, and card issuers don’t all compute it the same way. But, you can get a general idea with a little bit of basic arithmetic, as in the example below.
A lower DTI means your debt obligations probably aren’t burdensome relative to your income. A higher DTI means you may have more debt than you can manage. The more you increase your income and lower your monthly minimum debt payment obligations, the lower — and healthier — your DTI will be.
Your DTI isn’t used to calculate your credit score, but card companies do consider it when you apply for a new card. If it’s too high, you could be turned down or offered a card with higher fees and less-attractive features.
If you’re denied credit because your DTI is too high, you should try to increase your income, pay off some of your debt, or both.
16. Can You Transfer a Balance to a Subprime or Secured Credit Card?
Some subprime or secured cards will allow you to transfer a balance from another card if your available credit limit is high enough to cover the amount you wish to transfer and all applicable fees. Nearly all subprime cards will charge a balance transfer fee, which typically ranges from 3% to 5% of the total transferred amount.
There are a few problems you may run into, however. For one, it will be difficult to find a low or 0% balance transfer interest rate with a bad credit score. It doesn’t make sense to transfer a balance from a high-rate card to another card with an equally as high or higher interest rate. The second problem you may run into is being approved for a large enough credit limit to perform a balance transfer.
You can contact the issuer of the card you’re interested in and explain that you need a higher available credit line because you want to perform a balance transfer. It never hurts to ask, and you may want to start your search at a credit union. Credit unions charge lower fees than banks because they’re member-owned institutions.
Always read the fine print and make sure the interest rate savings is worth the cost of the balance transfer fee. You can use a balance transfer calculator to see if you’ll come out ahead.
17. How Does a Secured Card Differ from a Prepaid Card or Debit Card?
The principal difference between a secured credit card and a prepaid card or debit card is that the secured card is a form of credit — a type of loan — while the prepaid and debit cards are not forms of credit.
This difference is important because of those three options, only the secured card can be reported to the three major credit reporting bureaus, which means it is the only one that will appear on your credit report and affect your credit score.
Because prepaid cards and debit cards are not forms of credit, they will never be reported to the bureaus, never appear on your credit report, and never affect your credit score.
If your goal is to improve your credit score, a secured card could help — or hurt, depending on how it’s used. A prepaid card or debit card will have no impact at all.
18. Do You Need a Bank Account to Open Subprime Credit Cards?
The vast majority of credit cards, even those for bad credit, require a checking account to qualify for approval. That’s because most credit cards can only be paid through a bank transfer or by check, and both methods will require a bank account to complete.
That being said, you don’t need an expensive checking account to get a credit card. Many credit unions and online banks provide free and low-cost checking and savings accounts that can be obtained regardless of your credit score.
19. Do Credit Cards for Bad Credit Charge Foreign Transaction Fees?
Many credit cards charge foreign transaction fees when you make a purchase in a currency other than U.S. dollars, including many subprime credit cards.
If you don’t travel outside the United States, foreign transaction fees may not matter to you.
However, if they do matter, the only way to avoid them is with a card that doesn’t charge the fees at all. Yet another reason to shop around, read the disclosures, and compare cards before you decide to apply for a card that you like.
Editorial Note: Opinions expressed here are author's alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
The information on this page was reviewed for accuracy on .
About the Author
Marcie Geffner
Credit and Banking Expert
Marcie Geffner is an award-winning reporter, editor, and writer. Her stories about banking, credit cards, insurance, economics, small business, and other subjects have been featured by the Los Angeles Times, Washington Post, Bankrate, Credit Karma, Bookmarks Magazine, FOX Business, CNBC, Yahoo! Finance, and dozens of major U.S. newspapers.
Her articles have been cited in seven nonfiction books and two U.S. Congressional hearings. She edits nonfiction, memoir, and fiction, and contributes to Kirkus Reviews. Marcie holds a bachelor’s degree in English from UCLA and MBA from Pepperdine University.
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