Use our guide to the top ten best bad credit credit cards to find the right card which will likey enable you to spend on credit if you have bad credit.
|Top Ten Bad Credit Credit Cards||APR%||What's The Deal?||Why we like it:||What to watch out for:|
|Tesco Foundation Card||27.50%||Offers a credit limit of £1200||Low APR compared with other cards of this type. Offers Tesco club card rewards both from in store purchases and at other participating retailers||You cannot own or have applied for any other Tesco credit cards within 12 months. Borrowers must repay at least £25 a month|
|Capital One Classic Complete||34.90%||Offers 0% on balances transferred for four months. Eligibility criteria allows for CCJs over a year old and will accept those who have been bankrupt||Balance transfers help manage existing debt, generous eligibility criteria||You must repay at the end of each month or face a fee and high APR|
|Amazon Classic||29.90%||Offers 0% balance transfer for three months and a £20 Amazon voucher||Relatively low APR for this type of card. Balance transfer for 3 months help with debt and the £20 voucher is a nice touch||Eligibility criteria tougher than Capital One. You must repay at the end of each month or face a fee and high APR|
|Chrome Credit Card||29.50%||Offers a maximum borrowing limit of £1500. Does not accept bankruptcy within 18 months, or CCJs within the last year.||If you keep up with repayments Vanquis can increase your borrowing limit up to £4000||Does not offer balance transfers, relatively tough eligibility criteria|
|Aqua Credit Card||34.90%||Start with a credit limit of £250-£1,200 which could increase after four months. Credit limit and interest rate depends on personal circumstance. 0% for 6 months on balance transfers made in the first 60 days||Offers 0% rates on balance transfers||Available to new Aqua card holders only. You can’t get this card if you've opened a Marbles, Fluid or Opus account in the last 12 months, had a CCJ in the last 12 months or been declared bankrupt in the last 18 months.|
|Barclaycard Forward||33.90%||Offers a credit limit of between £50 and £1200||3% interest rate reduction If you make all your payments on time for the first year. They offer another 2% reduction if repayments are maintained in the second year||Does not allow applicants who have recently missed bill payments. Only allows for one CCJ|
|Marbles Credit Card||34.90%||Maximum borrowing rates of £1200, instant eligibility online, instant online statements and provides texts to keep track of spending||Offers sporadic promotions on balance transfer, cash withdrawal and money transfers. Borrowing limits increase if you keep up full repayment||APR can be much higher than the representative if you do not meet basic eligibility criteria|
|Ocean Credit Card||39.90%||Offers an initial minimum credit limit of £200 which can go up to £1500. The amount offered varies by customer depending on their credit history and financial situation||Card holders can add three other borrowers to the card||High APR, limited incentives offered|
|Thimbl||39.90%||An initial credit limit of between £150 and £1,000, with a chance to grow your credit limit up to £4,000||Allows borrowers to add an extra card holder.||Relatively low maximum borrowing limit|
|ThinkMoney||39.90%||Offers a credit limit of between £250 and £1500||Offers smart texts to track spending, allows borrowers to add three card holders (but the borrower is responsible for all repayments)||Requires some evidence that you are already able to manage credit and make repayments|
What is a bad credit credit card?
A bad credit credit card is a credit card for people with a poor credit history who struggle to get credit. These cards have tougher eligibility criteria than a standard credit card, but they help people improve their credit score if they make payments on time, while being able to borrow short term.
A bad credit score usually arises because people have not borrowed at all or have patchy borrowing histories, which means lenders cannot be certain how reliable the borrower will be in making repayments. Alternatively, a borrower failed to make payments or has a country court judgement (CCJ) against them.
To find out more about your financial history try the free service CreditWise. It offers tips on how to improve your score and lets you keep an eye on your history. It also offers a way to check eligibility criteria without applying directly. This avoids any rejections negatively impacting on your existing credit score.
It is important that bad credit credit cards are not used to try and get out of debt. If you fail to make a repayment, they have high-interest rates which makes debt far harder to manage and can make your credit score much worse.
How do bad credit cards work?
Poor credit histories need not be permanent. Borrowers cause a bad credit credit card to reverse their histories by proving they can borrow responsibly.
Borrowers need to meet eligibility criteria when they apply, and these will vary across providers. Applications are typically made online. It can be a good idea to use an eligibility criteria checker before applying officially, since a rejection from a lender can bring down an already low credit score. Lenders will look for evidence or failed payments, CCJs, numerous existing cards and whether you are a registered UK voter.
A bad credit credit card is given to those with poor credit histories to demonstrate they can repay debt in time and in full. The lender sets strict borrowing limits and imposes a high APR as recompense for lending to those who have poor histories. So long as the lender repays their debt and sticks to the rules, they will improve their credit score over time. This allows them to borrow more easily on favourable terms in future.
How does a bad credit credit card differ from a credit building credit card?
There is not a great deal of difference between a bad credit credit card and a credit builder card. As the names imply, bad credit credit cards help repair a poor score based on a questionable lending record. Credit building cards help those without a credit history to demonstrate they are responsible borrowers. Both types of card have similar eligibility criteria and impose high APRs.
What are the benefits of using a bad credit credit card?
Without a decent credit history, it is difficult for lenders to take on a borrower. Bad credit credit cards can improve credit history and make it easier to borrow money in the future, on more favourable terms. They are useful for short-term borrowing where borrowers are not able to access loans.
What are the downsides of bad credit credit card?
Bad credit credit cards can be disastrous if the borrower cannot keep up with repayments. Not only will they add to their debt through high APR, but they will undermine their credit score yet further. Bad credit credit cards typically offer lower borrowing limits than other credit cards.
Bad credit credit cards should never be used for taking out cash nor should they be used to clear debt; they are expensive and serve to improve credit scores only if you are able to honour the lender’s terms.
Five ways to improve your credit score:
- Repay your debts in full and on time
- Close unused accounts
- Do not apply for too many credit cards
- Build a credit history
- Register to vote