The Discover it® Secured Credit Card is our best credit card for bad credit because it earns cash rewards with a $0 annual fee, reports your payment history to help build your credit score, and lets you upgrade to cards with higher credit limits.
Having a bad credit score can be inconvenient and expensive. Not only does it keep you from getting the best credit cards and loans, credit cards for bad credit tend to have higher interest rates and fewer perks like sign-up bonuses or rewards programs.
Fortunately there are credit cards for bad credit that have no annual fees, reasonable APRs, solid rewards and report to all three credit bureaus. As you use your card responsibly, you can build your credit score and eventually upgrade to a card that offers even more valuable rewards and benefits.
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How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Deposit required: $200
Credit limit will equal your deposit and ranges from $200 to $2,500.
The Discover it® Secured Credit Card hits everything you’d want in a secured credit card for limited / poor credit: a $0 annual fee, credit bureau reporting and cash back on every purchase. It’s also our top choice for students with bad credit.
You’ll have to put down a $200 minimum deposit to secure a credit line. After seven months, Discover will begin monthly reviews of your account to see if you qualify to get your deposit back and graduate to an unsecured credit card.
How LendingTree Rates Credit Cards?
Our experts rate credit cards based on several factors including card benefits, bonus offers and independent research. Credit card issuers do not influence or have a say in our card ratings. Read our credit card methodology here.Deposit required: $200
Credit limit will equal your deposit and range from $200 to $3,000.
The Capital One Quicksilver Secured Cash Rewards Credit Card offers a simple cash back rate on everyday purchases, which is rare with cards for bad credit. Cardholders earn 1.5% Cash Back on every purchase, every day; 5% Cash Back on hotels and rental cars booked through Capital One Travel (terms apply). Additionally, this $0 annual fee card offers automatic credit line reviews starting at six months to determine if you qualify for a higher credit line.
There are two main credit scores that banks and lenders use to determine credit rating: the FICO Score and the VantageScore.
Any FICO Score lower than 580 is considered a bad credit score. Any number below 600 on the VantageScore scale is considered poor.The credit scoring method most lenders use is the FICO Score, which can range from 300 to 850.
The FICO Score is the most commonly used credit score and dates back to 1989. It’s based on five areas of your financial behavior:
Each area is weighted differently and collectively determines your credit score. Data that’s reported to each of the three major credit bureaus – Equifax, Experian and TransUnion – is put into the proprietary algorithm to determine your credit score. The three-digit number then fits within one of the five credit ranges which go from poor to exceptional.
| Credit rating | Credit score |
|---|---|
| Poor credit | 300 to 579 |
| Fair credit | 580 to 669 |
| Good credit | 670 to 739 |
| Very good credit | 740 to 799 |
| Exceptional credit | 800 to 850 |
Less commonly used, but more accessible to you, is the VantageScore, which also ranges from 300 to 850. It also uses data from the credit bureaus but with a different calculation which may allow you to have a build credit more quickly due to the way your score is calculated.
The VantageScore was created by the three major credit bureaus and is typically available to you through your bank or credit card’s online dashboard.
| Credit rating | Credit score |
|---|---|
| Very poor credit | 300 to 499 |
| Poor credit | 500 to 600 |
| Fair credit | 601 to 660 |
| Good credit | 661 to 780 |
| Excellent credit | 781 to 850 |
The cost of bad creditA credit score may look like a harmless three-digit number. But, the lower your credit score is, the more you can expect to pay by way of higher interest rates and subpar, or missed, opportunities. When you have bad credit, you’ll likely have:
When you have bad credit and you’re looking for ways to rebuild, you need to be on high alert to avoid scams and predatory credit products. Be on the lookout for credit repair scams (a scam where someone tells you they can fix your credit quickly, or get negative information removed from your credit reports). You can take many steps to repair your credit on your own. And if you’re feeling overwhelmed, there are legitimate nonprofit credit counselors who may be able to help.
Using a credit card for a year or more can be a good way to rebuild credit. However, you should also be wary of many credit products marketed to people with bad credit. These may be legitimate products, but can cost you money and cause frustration through expensive fees, high interest rates and opaque terms. We typically recommend avoiding unsecured cards for bad credit for these reasons.
Tip: Look for clear terms and a low annual fee when choosing a secured card.
Credit One, First PREMIER, Horizon Card Services and Total Visa are examples of companies that may offer credit products that you should steer clear of. Instead, opt for a secured card with clear terms and a low or no annual fee. Putting together the initial deposit amount might not be easy, but you’ll likely save money in the long run.
For Capital One products listed on this page, some of the benefits may be provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply
The information related to the Discover it® Secured Credit Card, Capital One Quicksilver Secured Cash Rewards Credit Card and Capital One Platinum Secured Credit Card has been collected by LendingTree and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.
The content above is not provided by any issuer. Any opinions expressed are those of LendingTree alone and have not been reviewed, approved, or otherwise endorsed by any issuer. The offers and/or promotions mentioned above may have changed, expired, or are no longer available. Check the issuer's website for more details.
