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Good Credit Cards for People with “Bad” Credit

Last Updated: October 1, 2023
2 min read

Key points about: finding a credit card if you have poor credit

  1. Secured credit cards may be an option for borrowers who don’t qualify for traditional, unsecured credit cards due to unestablished or poor credit.

  2. Secured credit cards require a security deposit equal to the approved credit limit.

  3. A secured credit card can help you build your credit with responsible use.

You might be facing an uphill battle getting a credit card if you have less than stellar credit or haven’t established a credit history. Fortunately, there are ways to get a good credit card, even with poor credit.
Secured credit cards cater to borrowers building or rebuilding credit history. While not everyone may qualify for a secured card, credit score requirements are usually less strict for secured vs. unsecured credit cards, which means a poor credit score may not stop you from getting approved. At Discover®, there’s no credit score required to apply.1 Let’s learn more about getting a secured card and building credit history from the ground up. 

How does a secured credit card work?

Secured credit cards differ from unsecured cards because they require a cash deposit that is used as collateral. This security deposit is what allows a credit card company to relax its credit score requirements. The credit limit for a secured card is set by the credit card issuer and is usually equal to the deposit amount.

After you make a series of on-time payments to your secured card, you may be eligible to get your deposit back. In addition, many credit card issuers will report your account activity to the three major credit bureaus. So paying at least the minimum payment on time on your balance each month can also help you build your credit with responsible use.

When can you graduate from a secured to an unsecured credit card?

It’s important to remember that a poor credit history doesn’t necessarily mean a poor credit future. Secured credit cards let you demonstrate responsible credit management, such as making timely payments and maintaining a low credit utilization (the amount of credit you’re using compared to your total available credit).

Did you know?

As you build or rebuild your credit history using a secured credit card, you may qualify to transition to an unsecured card. With the Discover it® Secured Card, you can upgrade to an unsecured card after 6 consecutive on-time payments and maintaining good status on all your credit accounts.2 Keep in mind that if you graduate from a secured card, your account number, benefits, and rewards often remain the same.

What should you look for in a secured credit card?

Many secured credit cards come with a higher interest rate and lower credit limit than unsecured cards. But you can still make the most of your card. Consider secured cards that offer rewards for eligible purchases. And look for secured credit cards with no annual fee. Discover has no annual fee on any of our cards. You may also want to double-check that the credit card company you choose does, in fact, report payment history to the three major credit bureaus. Otherwise, your responsible credit use may not help with rebuilding your credit history.

It may seem daunting, but finding good credit cards with a poor credit history is possible with secured credit cards. As you narrow your search, be sure to review each card's terms and conditions to find the best credit card for you.

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  1. No Credit Score Required (Secured Card): Based on 2022 Discover it Secured credit card application data, applicants without a credit score may qualify. You must meet other applicable underwriting criteria. When we evaluate your creditworthiness, we consider all the information you provide on your application, your credit report, and other information. If you have a credit score, we may use that in our evaluation.

  2. Graduation Transparency (Secured Card): Monthly reviews start your seventh month as a customer. We will refund your security deposit if you have made all payments on time for the last six consecutive billing cycles on all your Discover accounts including any loans, and you've remained in “good status” on all credit accounts you are responsible for whether they are Discover accounts or not. “Good status” means: (1) your credit report shows no delinquencies, charge-offs, repossessions, or bankruptcies for the six months prior to our review; and (2) your Discover Secured Card is not in a prohibited status at the time of our review, including, but not limited to: closed, revoked, suspended, subject to tax levy, garnishment, deceased, lost/stolen, or fraud. Monthly reviews may be delayed if you change your payment due date. We typically process your refund in 2-3 business days based on your delivery preference. If you close your account and pay in full, we’ll return your deposit within two billing cycles plus ten days.
  3. *Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build credit.
  4. **Minimum Security Deposit: If approved, you must make a minimum security deposit of $200 (or more, in increments of $100 up to $2,500), which will equal your requested credit limit. Discover will determine your maximum credit limit by your income and ability to pay
  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.