A credit score of 500 or less gives you plenty of room for growth when building your credit, and it won’t exclude you from qualifying for a good credit card. Several credit cards for credit scores in this range or lower offer credit-building tools to help you build your score; some even offer rewards. The cards featured here could get you on the right track for a better score and better cards.
Comparing the best cards for a 500 credit score
Top cards for a credit score of 500 or lower
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The Capital One Platinum Secured Credit Card is a great starter credit card for people who want to access credit with a low security deposit. If you have bad credit or no credit, it’s a great choice because you may be eligible for a $49 security deposit ($99 or $200 minimum deposit possible, depending on your credit score), which is much lower than the deposit required on other cards for a credit score lower than 500.
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Pros
- There’s potential for a low security deposit if you qualify.
- You could be eligible to upgrade after six months.
Cons
- The high APR on any balance you carry could get expensive quickly.
- This card has no rewards program.
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The Petal 1 “No Annual Fee” Visa Credit Card is one of the few cards available to users with a low credit score that doesn’t charge an annual fee or require a security deposit. Your ongoing APR with this card can also be lower than rates you’ll typically find on credit cards for limited or bad credit. It’s also a great card if you’re hoping to secure a line of credit without any other financial commitment because it charges very few fees for cardholder activities, like foreign transaction fees, and it doesn’t charge a penalty APR.
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Pros
- This card is unsecured, so you won’t pay a security deposit.
- Depending on your credit score, you could get a credit limit between $300 and $5,000, which is much higher than other credit-building cards.
Cons
- If you have a low credit score, there’s potential for a high APR.
- No consistent rewards program outside of Petal Perks.
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The Discover it® Secured Credit Card is perhaps the best card on this list for anyone who can afford a $200 security deposit because it also earns rewards and a welcome offer. You’ll rarely find a card in this credit score range that earns cash back for your purchases or carries a welcome offer, so it’s worth jumping at what this card offers if you have the money to deposit.
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Pros
- This card has a rewards program, a rare feature for a secured card.
- Automatic reviews start at 7 months to potentially transition to an unsecured line of credit and return your deposit.
Cons
- Merchants may not accept Discover cards as often as other card networks like Visa and Mastercard.
- The required minimum security deposit is high.
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The Petal 2 “Cash Back, No Fees” Visa Credit Card skips several credit card fees and earns a decent rate of cash back, with the chance to boost your rewards rate with responsible card use. If you’re building credit and want to have some external motivation outside of your own discipline, this card’s rewards program can incentivize you to use credit responsibly while you raise your score.
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Pros
- This card incentivizes paying on time, a welcome feature for a credit-building card.
- The card charges no fees and no security deposit.
Cons
- Other credit-building cards available have more competitive rewards programs and welcome offers.
- You could have a sky-high APR and the card doesn’t have intro APR offers to give some relief on interest.
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The Mission Lane Visa Credit Card charges an annual fee of up to $59 but skips the security deposit, making it a fairly affordable option for anyone with a credit score under 500. Security deposits are often expensive hurdles when accessing credit, but cards like this make a line of credit available with minimal financial commitment. This initial fee will dig into your credit limit, but cardholders have the opportunity for a credit line increase (See terms).
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Pros
- This card doesn’t require a security deposit to open.
- You could earn a credit limit increase in just seven months.
Cons
- The card may charge an annual fee depending on creditworthiness.
- You can’t increase your low starting credit limit with a higher deposit like you can on a secured card.
How to choose a credit card for bad credit
If you want to pick the right card for you, consider the following factors. Prioritizing these will help you choose a card that meets your needs without straining your credit-building efforts.
Know your credit score
You can request a free credit report every year.
The credit cards you’re eligible for vary based on your credit score and other credit-related factors like age of credit history. Knowing your credit score can help you navigate the cards you qualify for and help you avoid behaviors that could damage your score, like applying for too many credit cards at once. To find your score and view your report, visit Annualcreditreport.com.
Many issuers provide free access to your credit score, but you can access your credit report through the three credit bureaus for free once a year if you don’t have a credit card.
Familiarize yourself with fees
Avoid cards that charge an annual fee and a security deposit.
Issuers often require security deposits upfront to open secured credit cards for bad credit. This collateral is a refundable amount used to fund your credit limit; other cards may charge annual fees, which are non-refundable.
Credit cards for bad credit also tend to have high ongoing APRs and rarely have intro APR offers. The best credit cards for bad credit have either a reasonable annual fee or a reasonable security deposit, a lower ongoing APR and plenty of credit-building incentives.
Focus on building credit
Develop positive credit-building habits to keep your score on the rise.
An advantage of credit cards for bad to fair credit scores is the potential to help you build an even better score over time. You should always look for a card that reports to the major credit bureaus because this will ensure there is a record of your progress. Also, look for cards with incentives for positive credit habits, like credit limit increases or cards that offer the chance to graduate to a more lucrative or unsecured credit card.
From our experts: 6 tips for applying for a credit card with bad credit
How to improve bad credit
The more you can improve your credit score, the better your chances are of accessing higher-quality cards. As a lower-risk borrower, you won’t have to spend as much on the collateral requirements for cards geared toward people with 500 credit scores or lower. Consider the following tips to build your credit consistently over time.
- Always pay on time. Your payment history is 35 percent of your credit score and missing a payment can have drastic consequences. Consider setting up automatic payments or making a note in your calendar to ensure you always pay your bill on time.
- Keep credit utilization ratio low. Use only a small amount of your available credit by setting up a few recurring bills on your card or only using it for budgeted outings. Your credit utilization ratio makes up the second-largest chunk of your credit score after payment history.
- Watch your credit report. Understand how to read your credit report and keep a keen eye out for errors like an unfamiliar employer or an incorrect middle initial. Small errors like these can lower your credit score or even hint at identity theft, so it’s best to be aware of your financial standing.
- Keep your starter credit card. The longer your credit history, the better. Your starter card will often be your first and oldest credit account, which can boost your score after you outgrow the card. Consider keeping the account open (as long as it doesn’t charge maintenance fees), even if you don’t use it.
Frequently asked questions about cards for a 500 credit score
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The cards listed on this page are all marketed for credit scores in the “bad” range on the FICO scale. If you have a score below 580 then you could qualify for any of them.
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It is typically easiest to get approved for any card with a security deposit, though you may also receive approvals for the annual fee cards listed here.
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Most cards require scores of 670 or above. The cards on this page offer approvals for users with scores lower than 500. If you have a very low score, you should open a card that aligns with your needs and won’t strain your wallet.
The bottom line
Don’t think a low credit score leaves you out for the count on accessing decent credit cards. You may not get the most lucrative rewards rates and lowest fees, but you can build your way to better cards with responsible habits. Be sure to pick a card that reports your progress to the major credit bureaus, never miss a payment and keep your credit utilization low. These steps can lead you in the right direction when done consistently over time.
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