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Closing a credit card with a balance remaining is possible to do. However, keep in mind that even if your credit card account is closed, you’ll still have to pay off the remaining balance. Additionally, you’ll need to cover interest that’s accrued as well as any fees, and you could face other consequences, including losing out on rewards and seeing potential impacts to your credit score.

Still, there are instances when closing a credit card can be the right move. If you’re thinking about closing a credit card account with an outstanding balance, you’ll want to weigh these considerations — and also ensure you have a plan for paying off your remaining balance.

What Happens If You Close a Credit Card Account With a Balance?

Once you’ve closed a credit card account with a balance, you’ll no longer be able to use that card to make purchases. Beyond that, here’s what else you can expect after your account closure.

Payment of Balance and Interest

Perhaps the most important thing to keep in mind when a credit card is closed with balance is that you’re still liable for the credit card balance you’ve racked up. You’ll also owe any interest charges that have accrued on your outstanding balance.

As such, expect to continue receiving monthly statements from your credit card issuer detailing your balance, accrued interest, and minimum payment due. And until you’re absolutely positive your debt is paid off, keep on checking your credit card balance regularly.

Recommended: What is a Charge Card

Loss of Promotional APR

If the card you closed offered a promotional interest rate, this offer will likely come to an end. If you’ve been carrying a balance on a credit card, your balance could start to accrue interest. Plus, you may have to pay the standard APR (annual percentage rate) on the remaining balance rather than the lower promotional rate.

Loss of Rewards

Before you move forward with canceling a credit card that offers rewards like points or airline miles, make sure you’ve redeemed any rewards you’ve earned. That’s because you may forfeit those rewards if you close your account.

Policies on this can vary from issuer to issuer though, so just make sure to check with your credit card company to be safe rather than sorry.

How Closing Credit Cards With Balances Can Impact Your Credit

There are a number of ways that closing credit card accounts with a balance can adversely affect your credit score given how credit cards work. Closed accounts in good standing will remain on your credit report for 10 years, whereas those with derogatory marks may fall off after seven years.

•   For starters, closing your account could drive up your credit utilization ratio, one of the factors that goes into calculating your score. This ratio is determined by dividing your total credit balances by the total of all of your credit limits. Financial experts recommend keeping your ratio below 30% and preferably closer to 10%. Losing the available credit on your closed account can drive up this ratio.

•   Closing your account can impact your credit mix, as you’ll have one fewer line of credit in the mix.

•   Closing a credit card could decrease your length of credit history if the card you closed was an old one. This too could potentially decrease your credit score.

That being said, the impacts can vary depending on your credit profile and the credit scoring model that’s being used. If, after closing your account, you pay off your account balance in a timely manner and uphold good credit behavior across other accounts, your score can likely bounce back.

Recommended: What is the Average Credit Card Limit?

Is Keeping the Credit Card Account Open a Better Option?

In some scenarios, it may make sense to keep your credit card active, even if you don’t plan on spending on the card. Here’s when opting against closing your credit card account might be the right move:

•   When you can switch credit cards: If your card carrier allows it, you might be able to switch to a different credit card it offers rather than closing out your account entirely. This might make sense if you’re worried about your card’s annual fee, for instance. You’ll still owe any outstanding debt on the old credit card, which will get moved over to the new card (the same goes if you happen to have a negative balance on a credit card).

•   When you have unused credit card rewards: With a rewards credit card, closing the account may jeopardize the use of earned rewards. Avoid that scenario by keeping the credit card active until you’ve used up all the rewards earned on your current credit card or at least until you’ve transferred them to a new credit card, if that’s an option.

•   When you don’t use the credit card: Even if you don’t use your credit card or use it sparingly, keeping the card open could build your credit score. This is because creditors and lenders usually look more favorably on credit card users who don’t rack up significant credit card debt, which is why maintaining a low credit utilization ratio is one of the key credit card rules to follow.

Nevertheless, there are certainly some scenarios when it can make sense to say goodbye to your credit card account. Here’s when to cancel your credit card, or at least consider it:

•   You want to avoid the temptation to spend.

•   You want to stop paying your card’s annual fee.

•   The card’s interest rate is rising.

•   You’d like to have fewer credit card accounts to manage.

Recommended: How to Avoid Interest On a Credit Card

Guide to Paying Off a Credit Card Balance

No matter what you do with your credit card account, you’re going to have to pay down your credit card debt. Here are some options you can explore to pay off your closed credit account with a balance as soon as possible.

To avoid making that mistake, here are some options you can explore to pay off your closed credit account with a balance as soon as possible.

Debt Consolidation Loans

A personal loan at a decent interest rate can make it easier to curb and eliminate your card debt. Once the funds from the loan hit your bank account, you can use the cash to pay off all your credit card debts. Then, you’ll only have to keep track of paying off that one loan with fixed monthly payments, making it easier to manage.

Keep in mind that you’ll generally need good credit to secure a personal loan with competitive terms, though.

Balance Transfer Credit Cards

A balance transfer card with a 0% introductory interest rate can buy you some time when paying down debt. You can transfer your existing debt to the new card, allowing you to pay down credit card debt at a lower interest rate, without racking up any additional interest payments during the promotional period.

Just make sure to pay off the entire balance before the card’s introductory interest rate period ends and the interest rate rises significantly. Otherwise, you may be right back where you started — with high credit card debt and a high interest rate. That’s not likely to be a good way to use credit responsibly. Also note that a ​​ balance transfer fee will likely apply.

Debt Avalanche or Snowball

For credit card debt repayment, consider the debt avalanche or snowball approach.

•   With the avalanche debt repayment method, you prioritize paying off your credit card with the highest interest rate first. Meanwhile, you’ll maintain minimum payments on all of your other debts. Once your highest-rate debt is paid off, you’ll roll those funds over to tackle your balance with the next highest interest rate.

•   The snowball method, on the other hand, is all about building up momentum toward debt payoff. Here, you pay as much as possible each month toward your credit card with the lowest outstanding balance, while making minimum payments on all of your other outstanding debts. When the smallest debt is paid off completely, repeat the process with the next smallest balance.

Debt Management Plan

If you’re still having trouble paying down your credit card either before or after you close the account, that could be a red flag signaling that you need help. In this case, consider reaching out to an accredited debt management counselor who can set you on the right path to credit debt insolvency.

In addition to helping you create a debt management plan, a credit counselor can help by negotiating a better deal on interest rates and lower monthly payments. That could result in paying down your credit card debt more quickly, which not only saves you money, but also helps protect your credit score.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

If you decide to close your credit card account with a balance, it’s critical to do so in a way where your debt obligations are covered and your credit score is protected. The key to doing the job right is to work with your card company, keep a close eye on outstanding balances and payment deadlines, and work aggressively to pay your card debt down as quickly as possible.

Since closing a credit card can have consequences, it’s especially important to consider a credit card ‘s pros and cons carefully before you apply.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can you close a credit card with a balance?

Closing a credit card with a balance is possible. However, you’ll still be responsible for the outstanding balance on the card, as well as any interest charges and fees.

Does it hurt your credit to close a credit card with a balance?

Closing your credit card with a balance remaining has the potential to impact your credit score. However, the exact implications for your score can vary depending on your overall credit profile and which credit scoring model is being used.

Is it better to close a credit card or leave it open with a zero balance?

That depends on your personal situation. Closing a card for good may impact your credit score, but you also won’t be able to use the card again and risk racking up unwanted debt in the process.

What happens if you close a credit card with a negative balance?

If you close a credit card with a negative balance, that means the card issuer owes you money instead of vice versa. In this situation, the card issuer will typically refund you that money before closing out the account.

How do I close a credit card without hurting my credit score?

You can mitigate the impacts of closing your account by paying off the balance on that account and all other credit card accounts you have. If you have $0 balances, then closing your account and losing that available credit won’t affect your credit utilization rate.

Photo credit: iStock/staticnak1983

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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If you need quick access to cash, you may be able to get a short-term loan in the form of a money transfer or cash advance from a credit card. Using a fairly simple process, you can transfer money from a credit card to a debit card. However, you can probably expect to get hit with a fee and interest charges. Plus, you’ll need to pay back the transferred amount.

What Is a Money Transfer Credit Card?

As the name implies, a money transfer credit card is a card that allows you to move money from your credit card to a debit card or to your bank account.

Many credit card issuers allow you to make a credit card advance. As a cardholder, you can take out a certain amount of cash against your line of credit, which is what a credit card is. These cash advances usually come with fees and higher interest rates.

Can You Transfer Money From a Credit Card to a Debit Card?

While it’s typically more common to transfer a cash advance from a credit card to a bank account, you can usually send money from a credit card to a debit card. You can make a money transfer to a debit card in your own name, or to another account holder, effectively allowing you to send money with a credit card to, say, a friend and family.

The credit card process for how to transfer credit card money to a debit card is fairly similar to moving money from a credit card to a bank account. Usually, you’ll need to provide the following information:

•   Name on the card

•   Card number

•   Expiration date

•   Bank account number (in some cases)

Recommended: What Is the Average Credit Card Limit?

Factors to Consider Before Transferring Money From a Credit Card

Before you transfer money from a credit card to a debit card, here are a few thing to mull over:

•   There are caps on a cash advance. Credit cards usually have a cap on a cash advance. The exact limit depends on the rules for a credit card set by the credit card issuer. For instance, it might be a set amount, such as $5,000, or it might be a percentage of your personal credit limit, such as 15%.

•   You might have to step foot inside a bank. If your credit card has a PIN, similar to a debit card, then you’ll be able to get a cash advance from an ATM. But if you want to do a money transfer from a credit card to your bank account or debit card, you might need to go to a brick-and-mortar location of a physical bank.

•   Cash advances could have an impact on your credit score. The good news is that cash advances don’t require a hard pull of your credit, which could hurt your score. However, taking out a cash advance can impact your credit by increasing your credit utilization ratio. That’s because carrying a higher balance ups your credit usage, which in turn can bring down your score.

•   You won’t earn rewards. The good news is that cash advances don’t require a hard pull of your credit, which could hurt your score. However, taking out a cash advance can impact your credit by increasing your credit utilization ratio. That’s because carrying a higher balance ups your credit usage, which in turn can bring down your score.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

How Much Does Transferring Money From a Credit Card Cost?

Nothing in life is free, and this includes money transfers from a credit card. Here are some costs that go into a credit card money transfer:

•   Cash advance fee: Just like with balance transfer credit cards, you’ll typically owe a fee to do a money transfer from a credit card to either your debit card or bank account. The fee varies depending on the card, and it might be a flat fee or a percentage of the amount of the advance. For instance, the fee might be $10 or 5% of the cash advance amount, whichever is greater.

•   Cash advance APR: The annual percentage rate (APR) for a cash advance is usually higher (sometimes significantly so) than the standard APR that comes with your card. Additionally, with standard purchases on a credit card, you have a grace period between the end of the billing period and the date your payment is due. During that time, you won’t be charged interest. When you transfer money from a credit card to a debit card, however, there’s no grace period. That means you’ll be charged interest from the time you take a cash advance.

•   Late charges, if applicable: If you’re late on a payment, you’ll most likely get hit with a late fee.

Recommended: What Is a Charge Card?

Is It Safe to Transfer Money From a Credit Card to a Debit Card?

For the most part, transferring money from a credit card to a debit card is pretty secure. Banks have built-in security features, so moving money between cards or to a bank account is generally considered safe.

Once you’ve sent your payment, you may want to check in with the intended recipient to ensure they received the funds in the credit card to debit card transfer.

Recommended: When Are Credit Card Payments Due?

Alternatives to Transferring Money From a Credit Card to a Debit Card

Moving money from a credit card to a debit card is just one method of sending money. There are other ways you can tap into your credit card limit in the form of cash, including:

•   Writing a check: In lieu of getting that money transferred to your debit card, the credit card company might mail you a check. You can either use it as a personal check or to make a deposit into your bank account.

•   Pulling money from an ATM: If your credit card comes with a PIN, you can withdraw money via a cash advance.

•   Using a payment app: You can also likely use popular payment apps like PayPal or Square’s Cash App to send money to someone else with your credit. Once you’ve linked your card, you may have the option to send money to someone else. Keep in mind that you or the recipient will likely incur fees.

And, of course, you might avoid taking out a cash advance entirely. If you’re in a pinch, you could also explore options like borrowing money from a friend or family member, taking out a personal loan with a competitive interest rate, or possibly dipping into your emergency fund. All of these alternatives will allow you to avoid the fees and interest charges that can accompany the transfer money from a credit card to a debit card.

Recommended: How to Avoid Interest on a Credit Card

The Takeaway

A cash advance by way of transferring money from a credit card to a debit card could be a quick, easy way to access money. The trade-off is that you’ll likely be paying high interest charges and a fee. Before proceeding, make sure it’s the right choice for you and your needs. Also, be careful not to take more cash than you need, as this will have an effect on your credit utilization.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can I transfer money from my credit card to my debit card without paying interest?

No, transferring money from your credit card to debit card comes with interest charges. The APR for a cash advance is typically higher than the standard APR on the card. Plus, you won’t get a grace period, so interest will begin accruing immediately.

Is it better to get a personal loan or transfer money from my credit card?

A personal loan is generally preferable to transferring money from a credit card. That’s because it’s possible to find no-fee personal loans, whereas cash advances generally carry fees. Plus, the interest rate on a personal loan is likely lower than the APR you’d be charged on a cash advance. Explore your options to find the right financial moves to suit your needs and situation.

Can I withdraw cash using a credit card?

Yes, you can take out cash using a credit card as a cash advance. Be aware of (and wary of) the fees, rates, and fact that there’s no grace period on accruing interest before proceeding.

Photo credit: iStock/Prostock-Studio

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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When you get preapproved for a credit card, you’ve met initial criteria to receive an offer to get a credit card. In other words, you’ve popped up on a list of consumers who satisfy a credit card company’s requirements and are being invited to apply for a card.

Here, you’ll learn the details of how preapproved credit card offers work, the difference between preapproved vs. prequalified offers, and the pros and cons of preapproved offers.

What Is a Preapproved Credit Card Offer?

A preapproved credit card offer, as noted above, is an invitation from a credit card company to apply for a credit card because you seem to meet some of the conditions for approval.

Credit card issuers usually use criteria pulled from credit reporting agencies to extend these offers. If you fall within the parameters of the credit card requirements set by the card issuer, then you may receive an offer — either via email, snail mail, or over the phone — to formally apply for approval for the card.

How Do Preapproved Credit Card Offers Work?

While it sounds promising, getting a preapproved credit card offer doesn’t necessarily mean you’re guaranteed to get approved for a credit card. Even if you’re preapproved, you’ll need to properly apply.

When you do, the credit card issuer will look over your application and usually request additional financial and personal information. The credit card company will also check your updated credit report to figure out if your credit still meets its criteria (after all, credit scores do change over time).

Preapproved vs Prequalified Credit Card Offers

The terms “preapproved” and “prequalified” often are used interchangeably when it comes to prescreened credit card offers. And within the realm of credit cards, they often are one and the same. But in other types of lending, they mean different things.

•  Preapproval means you’ve been prescreened for offers by the credit card company. These credit companies work with the three major credit reporting agencies — Equifax®, Experian®, and TransUnion® — to come up with a list of consumers that meet their lending criteria.

•  Prequalified offers are usually requested by you, the consumer. To get prequalified, you typically need to provide basic personal and financial information. During the screening process, the credit card issuer will check your credit. However, it will only conduct a soft pull, which won’t impact your credit score. After reviewing the info you submitted, the credit card company will let you know if you’re likely to get approved.

With both preapproval and prequalification, you’ll still have to submit to a hard credit inquiry and potentially provide additional financial information to actually get approved for the loan product. Keep in mind that with a hard vs. soft credit inquiry, a hard pull will usually temporarily lower your score.

Benefits of a Preapproved Credit Card

Now that you know what preapproved means for a credit card, you may be wondering what the benefits are. In general, these are the upsides of preapproval, whether for a rewards card or a virtual credit card.

Indicates Your Odds of Approval

Perhaps the most obvious benefit of getting preapproved for a credit card is that you’ll have a better sense of how likely you are to ultimately get approved for the card. Although preapproval is not a guarantee of eventual approval, if a credit card issuer has already selected you to apply and neither your financial situation nor credit hasn’t drastically changed, you’re likely within the required parameters to get the card.

Won’t Impact Your Credit Score

One of the major benefits of getting preapproved for a credit card is that it won’t impact your credit score. To get preapproved, the card issuer does a soft pull of your credit. Only if you decide to formally apply for the card will the credit card company do a hard pull of your credit.

Could Allow You To Secure More Competitive Terms

Getting preapproved for a credit card may allow you to secure a lower interest rate than you’d otherwise be able to get. This is because the lender is effectively advertising the card to you in order to get you to apply. Keep in mind, however, that your rates aren’t set until after you formally apply.

Recommended: How to Avoid Interest on a Credit Card

May Provide Access to Better Intro Offers

Another advantage of a preapproved credit card is that it might come with more lucrative perks than what’s more widely advertised to the public. You might be privy to cards with more attractive sign-up bonuses or introductory earnings opportunities. For instance, a cash-back credit card might offer a higher initial earnings rate through preapproval offers.

Could Get a Longer Intro APR for Balance Transfers Cards

For balance transfer credit cards that allow you to transfer your existing debt over to the new card, you might be able to get a lower introductory credit card annual percentage rate (APR) for longer through preapproved offers. This could make it easier to pay off your balance in full before the regular interest rate kicks in.

Easier for You

Because credit card companies have vetted you and know that you’ve passed at least some of its criteria, you don’t have to spend time researching cards. Instead, these offers are coming to you. Still, when choosing a credit card, it doesn’t hurt to take a look around to make sure this is truly the right fit for you.

Drawbacks of a Preapproved Credit Card

While there are benefits of preapproved credit card offers, there are drawbacks to them as well.

Might Not Be the Best Card for You

While you don’t have to jump through the same hoops as you would looking for a credit card on your own, the credit card you’re preapproved for may not be the right one for you. It might be a good idea to spend some time doing your own research and understanding differences in how credit cards work even if you do get preapproved.

Could Get Flooded With Unwanted Offers

Preapproval offers mean you receive a lot of unsolicited emails, mail, or phone calls. Especially if you’re not in the market for a new credit card, you could feel inundated with offers you don’t necessarily want or need.

Potential for Theft of Personal Information

There’s a chance that a would-be criminal hoping to commit identity theft could intercept your prescreened offer and get hold of your name and mailing address. The good news is that a fraudster would likely need information beyond what’s included in a preapproval offer.

Temptation to Open More Cards

Receiving preapproved offers for credit cards may tempt you to open a new credit card you don’t necessarily need, especially if the preapproval offer includes a lucrative sign-up bonus or an extended introductory APR offer. Especially if you’re already set with your lineup of credit cards, this might entice you to take on more cards and debt than you can comfortably manage.

When You May Need Credit Card Preapproval

You might want to receive a preapproved credit card offer if you’re in the market for a new credit card and would rather not go through the full process of researching credit cards. As you know you already meet certain lending criteria, the odds of getting approved for a card can be improved.

Keep in mind, however, that you don’t need to get credit card preapproval in order to apply for a credit card. If you’re getting a credit card for the first time and have a limited credit history, for instance, you’re likely not going to get so many preapproval offers — but that doesn’t mean you can’t still try applying.

Recommended: What Is the Average Credit Card Limit?

Tips for Getting a Preapproved Credit Card Offer

If you’d like to get preapproved offers, you’ll want to opt in by visiting OptOutPrescreen.com . From there, you can choose to get these offers through the mail, email, or via phone.

Instead of waiting for offers to come to you, you can also get preapproved by visiting a credit card issuer’s website and applying for prequalification. This typically requires providing basic personal and financial information.

Recommended: How Long It Takes to Get a Credit Card

Tips for Improving Your Chances of Preapproval

While you can still get preapproved for offers with not-so-great credit, you’ll get offers with the most favorable terms and rates with a strong credit score. To maintain or build your credit score and thus improve your chances of approval, make sure to do the following:

•   Avoid late payments

•   Keep your credit utilization rate low

•   Aim to keep cards open

•   Don’t apply for too many new accounts

•   Maintain a diverse mix of different forms of credit

Recommended: When Are Credit Card Payments Due?

How Does a Preapproved Credit Card Impact Your Credit Score?

A preapproved offer for a credit card doesn’t impact your credit score. As we talked about, lenders will do a soft pull of your score, which doesn’t affect your score.

But if you decide to apply for a card, the credit card issuer will do a hard pull of your credit. This will most likely ding your score, though generally only temporarily.

Opting Out of Preapproved Credit Cards

If you don’t want to get flooded by preapproval offers, you can decide to opt out. Visit the website OptOutPrescreen.com and follow the simple steps outlined on the website to do so. You then won’t be included on lists to get considered for preapproval for five years.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

The Takeaway

A preapproved offer for a credit card means you’ve met certain lending criteria to most likely get approved for a specific card. You’ll still need to officially apply to secure approval though. But if your credit score and financial history are the same as when you initially received the offer, there’s a high likelihood you’ll get approved.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How long does it take to get a credit card if you are preapproved?

It depends on the credit card and credit card company. If you’re preapproved for a card, you’ll still need to officially apply. If you do get approved for a card, it could take anywhere from five business days to two weeks for your card to arrive in the mail.

Can you get denied after preapproval?

In some cases, yes. For instance, if your credit or financial situation changed between the time you received a preapproved offer and when you applied, you might get denied.

Can I get a credit card if I am not preapproved or I don’t qualify for a credit card?

You don’t need to get preapproved for a credit card; it simply skips a few steps and can boosts your odds of getting a card. However, you will need to qualify for a credit card to get it. This happens if you meet the credit card company’s lending criteria. If you do, you’ll have a chance of getting a particular credit card. If you don’t qualify, you might consider applying for a secured card, which uses your cash deposit as your spending limit.

Should I still apply if I am not preapproved for a credit card?

Just because you aren’t preapproved doesn’t mean you won’t be able to get a particular credit card. Spend some time doing your homework to figure out which cards are a good fit for your needs and financial situation. When choosing a credit card, it’s important to check the rates, credit limits, and fees.

Photo credit: iStock/akinbostanci

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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There is no minimum credit score needed for a credit card. Even borrowers with poor credit (a score of 300 to 579) or no credit card at all can qualify for some credit cards. However, options for bad-credit borrowers are limited and usually come with a high annual percentage rate (APR) and fees. Borrowers with no credit or poor credit may also only qualify for secured credit cards.

By building your credit score, you’ll have more options for credit cards with better rates, fees, and even rewards, bonuses, and perks. Read on for details on this important financial topic.

How Your Credit Score Affects Your Odds of Credit Card Approval

A good or excellent credit score typically increases your odds of credit card approval. But if you have a bad credit score, you’re not out of luck. Some credit card issuers have options for borrowers with no credit history or extremely low credit scores.

Before applying for a credit card, it’s a good idea to read the fine print for that specific card. Often, credit card companies will list their minimum credit score requirements for the card. If you’re at the bottom of the stated range or below it, you may have a harder time qualifying.

To avoid getting declined (and having an unnecessary hard inquiry on your credit report), you may want to consider a less competitive credit card that you’re more likely to be approved for based on your credit score.

What Credit Score Do You Need to Get a Credit Card?

While there is no minimum credit score to get a credit card, you’ll need a higher credit score to qualify for the best credit cards available. Typically, travel credit cards and cash-back credit cards are reserved for borrowers with good to excellent credit (690 and above on the FICO® scale).

If you have a fair credit score, you might be able to qualify for a decent credit card with a higher annual percentage rate (APR) and limited perks. Experts recommend having a credit score at least in the low 600s to apply for a standard credit card.

Borrowers with bad credit or no credit at all may be limited to secured credit cards (cards that require a security deposit as collateral), credit-building cards, or high-interest credit cards with high annual fees.

Recommended: How to Avoid Interest on a Credit Card

Tips for Estimating the Credit Score You Need

How can you determine a credit card’s credit score requirements? Here are a few ways to estimate the minimum score you’ll need:

•   Checking the website: Often, the credit card issuer will clearly state what credit score is required for each of its credit cards.

•   Reading reviews: If the issuer’s website isn’t clear, you may want to check third-party review websites, which often print the recommended credit scores needed for credit cards.

•   Using third-party services. Platforms like Credit Sesame and Credit Karma can help you gauge which credit cards you’ll qualify for with your current credit score — but it’s never guaranteed.

•   Getting preapproved. Many credit card issuers offer preapproval for their cards. This means they only initiate a soft pull on your credit report (with no effect on your credit score). A preapproval is not a guaranteed yes; you still have to go through the process, but it can instill more confidence if you’re worried about your chances.

Recommended: Does Checking Your Credit Score Lower Your Rating?

Factors Affecting Your Credit Score

Building your credit score is a great way to qualify for more (and better) credit cards. But knowing how to positively impact your credit score requires that you know what affects your credit score in the first place.

FICO and VantageScore both constantly monitor consumers’ credit and assign them different credit scores based on a consumer’s activity. While the models are similar, each company uses its own proprietary scoring method to calculate credit scores. Both scores range from 300 to 850.

FICO Scoring Method

Your FICO credit score depends on five key factors:

•   Payment history (35%): The largest factor impacting your credit score is your payment history. Making on-time payments not just for loans but for things like rent and utilities will build your score. Late payments can stay on your credit report for up to seven years.

•   Credit utilization (30%): How much of your available credit you are using is expressed as your credit utilization ratio. Using less of the credit available to you can positively impact your score, while using more can negatively impact your credit score. Ideally, your utilization rate will be 30% or lower.

•   Credit history (15%): The length of your credit history plays an important part in your credit score. Responsible credit users should see their scores increase over time, meaning the longer you keep accounts open, the more you can positively impact your three-digit credit score.

•   Credit mix (10%): Having a healthy mix of loan types (both installment credit and revolving credit) can build your score — if managed properly. That means a combination of mortgages, auto loans, student loans, personal loans, and credit cards can positively impact your credit score.

•   New credit applications (10%): When you apply for new credit, lenders will make a hard inquiry on your credit report. Even if you are denied the credit, this inquiry will temporarily lower your credit score, which is how applying for a credit card affects your credit score.

Recommended: When Are Credit Card Payments Due?

VantageScore’s Scoring Method

VantageScore, on the other hand, assigns different factors a value of influence:

•   The most influential factor affecting your VantageScore is payment history, as it is with FICO.

•   Three highly influential factors include the age of credit, type of credit, and credit utilization.

•   A moderately influential factor is the total debt balance you maintain across all loans.

•   The least influential factor is your recent credit activity (opening new accounts, recent hard inquiries, etc.).

Recommended: Understanding the Different Types of Credit Cards

Tips for Building Your Credit Score

Wondering how to build your credit score to increase your chances of credit card approval? Here are some tips:

•  Understand your credit score: The first step to building your credit score is knowing how it’s calculated — and knowing what your current credit score is.

•  Make on-time bill payments: Paying bills on time is good for more than just avoiding late fees. It’s also the top factor in determining your FICO score and VantageScore.

•  Decrease your credit utilization: By reducing the amount of purchases on your credit cards — and paying them off in full every month — you’ll decrease your credit utilization, which can positively impact your credit score.

•  Become an authorized user: If you have no credit history or are repairing bad credit, you may benefit from becoming an authorized user on a friend or family member’s credit card. If they are responsible with the card, it’s an easy way for you to build your score without applying for your own card.

•  Keep old cards open: Once you qualify for better credit cards, you may be tempted to close out old accounts. But each of those cards has a credit limit. By keeping the card open but not using it, you decrease your overall credit utilization and keep the average age of your credit higher. The exception: If the card has an annual fee and you’re not using it at all, it may not be worth keeping it open.

•  Only apply for credit cards when you need them: Each time you apply for a credit card, the issuer makes a hard inquiry on your credit report, which lowers your score. Because of this, it’s a good idea to wait at least six months between credit card applications — and only apply when you need to. Choose your credit card applications wisely.

Recommended: Tips for Using a Credit Card Responsiblya

Getting a Credit Card with Bad Credit

Bad credit doesn’t mean you can’t gett a credit card. In fact, you can find credit cards on the market designed specifically for people with bad credit. However, such cards typically have high fees and interest rates.

If you’re worried about high fees and rates, a secured credit card for bad credit may be the better option. Some secured credit cards even approve borrowers without conducting a credit check. The big difference between a secured vs. unsecured credit card is that secured credit cards require a security deposit, which acts as the card’s credit limit.

Alternatively, borrowers with bad credit may be able to qualify for a retail credit card. These cards can only be used at a specific store or chain of stores. While retail credit card credit score requirements vary, many are available to borrowers with limited or bad credit.

Recommended: What Is the Average Credit Card Limit?

Getting a Credit Card With Fair Credit

With a fair credit score (580 to 669 per FICO), you won’t qualify for the top rewards credit cards available. That being said, it’s still possible to get approved for an unsecured credit card with no annual fee and limited perks.

Interest rates tend to be higher for those within this credit score range, but if you can pay the card off in full every month, you won’t have to worry about racking up credit card debt. Eventually, you may even build your credit score enough to graduate to a rewards credit card with a better rate and terms.

Getting a Credit Card With No Credit

What if you have no credit history at all? Believe it or not, you can still qualify for a credit card with no credit history — though your options may be more limited.

Like borrowers with bad credit, you can likely qualify for no-frills secured credit cards if you can come up with the security deposit. Alternatively, borrowers without an established credit history can ask a close friend or family member to be added as an authorized user on their card. There are also credit cards designed for those who are currently enrolled in school and are just embarking on their credit journey.

The Takeaway

While there isn’t a minimum credit score for a credit card, having a good to excellent credit score improves your chances of approval for the top credit cards on the market (ones with robust rewards and lower interest rates). If you have a poor or fair credit score or no credit history at all, you may be able to qualify for secured credit cards or credit cards with higher APRs. By building your credit score, you may find you have more options.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can you get a credit card with limited or no credit history?

Yes, you can get a credit card with limited or no credit history. Borrowers with no history can look for secured credit cards or consider becoming an authorized user on someone else’s credit account. Without credit history, however, you likely will not qualify for low-APR credit cards or rewards credit cards.

Can I get a credit card with a score of 600?

Yes, with a credit score of 600 (in the fair credit range), you may qualify for basic credit cards that offer limited perks, if any. You likely will not be able to qualify for a rewards credit card. However, credit card issuers may at least approve you for an unsecured credit card, though likely with a higher APR.

What is the easiest card to get approved for?

If you have no credit history (or a limited credit history) or a bad credit score, the easiest card to get approved for is typically a secured credit card. Secured credit cards present lower risk to credit card issuers because borrowers must make a security deposit that serves as collateral and their credit limit.

Photo credit: iStock/Antonio_Diaz

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Gas credit cards can be one option to earn a rebate on gas purchases, either in the form of cash back or other types of credit card rewards. This can make gas purchases help with your budgeting efforts.

There are many different types of gas credit cards, each with their own pros and cons. Some gas credit cards work only at one particular chain of gas stations, while others offer rewards no matter where you buy gas and may even give rewards on some non-fuel purchases. Understanding the different types of gas credit cards can help you choose the best gas credit card for your specific situation.

What Is a Gas Credit Card?

A gas credit card is a term that can refer to a number of different types of credit cards. One might be a standard credit card that earns bonus credit card points on all gas purchases. Another type of gas credit card is one that is co-branded with an actual gas station and gives rewards at that gas station. There are also gas credit cards that are designed more for companies with large fleets of vehicles.

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How Do Gas Credit Cards Work?

Gas credit cards work in much the same way that any other credit cards work. You are extended a line of credit which you can use to make purchases. If you don’t pay what you owe at the end of your billing cycle, you are assessed interest for the privilege of carrying a balance.

Most gas credit cards run on a major credit card processing network like Visa, Mastercard, or American Express. That means that even if you might think of it as a gas credit card, it can be used anywhere those types of cards are accepted.

Types of Gas Credit Cards

There are a few different types of gas credit cards put out by various credit card issuers. Here are a few of the most common types of cards to consider if you want to save money on gas.

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General-Purpose Gas Credit Cards

General-purpose gas credit cards are credit cards that earn rewards on a variety of different purchases. They may have gas as one possible bonus category, or they may earn the same high rewards rate on all purchases.

Gas Station Co-Branded Credit Cards

A gas station co-branded credit card is generally marketed and primarily branded for one particular gas station (BP, Shell, Marathon, etc.). These types of cards are often referred to as “co-branded” because they are branded with both a gas station brand and the brand of the bank that issues it. While these are also usually part of a major credit card processing network like Visa or Mastercard, the rewards they earn are typically targeted to the main “branded” gas station chain.

Fleet Gas Cards

A fleet gas card or fleet fuel card is a different type of gas credit card entirely, and is targeted more toward businesses that have to manage a large fleet of vehicles. A transportation manager can give fleet cards to individual employees, allowing them to pay for things like fuel, repairs, and maintenance without having to pay out of pocket and get reimbursed. The transportation manager can then track and account for all of the disparate charges centrally.

Recommended: What is a Charge Card?

How Different Types of Gas Cards Compare

If you’re choosing a rewards credit card, there are a few questions that you’ll want to ask yourself:

•   Ease of use: Is this a gas card that can only be used at one particular gas station, or can it be used anywhere?

•   Rewards: Does the reward structure of the card match up with your spending patterns?

•   Fees: What kind of fees does the card have? Avoiding credit card fees is an important part of choosing the right card.

Recommended: Tips for Using a Credit Card Responsibly

Which Type of Gas Credit Card Is Right for You?

Trying to determine what’s the best credit card for gas for you? Here’s a look at two of the most popular options among the different types of credit cards for gas.

Who Gas Rewards Cards Are Best For

The following types of people might be best served by a general purpose credit card that happens to offer rewards on gas purchases:

•   Consumers who frequently shop at multiple different gas stations.

•   Infrequent travelers who spend much more in other categories than they do at gas stations.

•   People looking to maximize their credit card miles or cash back.

Who Gas Station Credit Cards Are Best For

These consumers might find that the best gas credit card for them is a gas station credit card:

•   Consumers who spend an above average amount at gas stations.

•   Travelers who frequently fill up at the same gas station chain every time.

•   Employees who are given a gas station credit card by their employer and are mandated to use it.

Are Gas Credit Cards Generally Worth It?

For many consumers, gas and fuel purchases are one of the biggest spending categories each month. Just like improving gas mileage, earning cash back or other credit card rewards can help offset some of your fuel cost each month. Just make sure to compare the different gas card options to find the best gas credit card for your situation.

The Takeaway

There are a variety of different cards that can be considered gas credit cards. Some gas credit cards are more general rewards credit cards that happen to give a bonus on gas purchases. Other gas station cards have rewards targeted to one particular gas station brand. Still other gas cards are used by companies with large fleets to help manage their transportation expenses. Compare options, and see if one can suit your needs.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Is there a credit card only for gas?

There are some gas credit cards that work only at specific gas stations and do not work for other purchases. Other gas cards are branded with a particular gas station’s color and branding (such as BP, Shell, or Marathon) but are still part of a major credit processing network (like Visa, Mastercard, or American Express). That means that you can use the card anywhere those networks are accepted.

What is the best fuel card to get?

The best fuel card to get is the one that maximizes the rewards based on your unique and specific spending patterns. If you always shop at the same gas station, you might be better off with a card that’s specific to that brand. If you shop at different gas stations or want to earn rewards on non-fuel purchases, you may want to consider a more generic rewards credit card that happens to also earn rewards on gas purchases.

Do gas cards help build credit?

Whether gas cards help build credit depends on specifically what kind of gas credit card it is. If it is a store-specific card that is not part of a major credit card processing network, it likely does not report purchases and credit history to the major credit bureaus. In that case, it likely will not help you build your credit history.

Photo credit: iStock/kckate16

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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