If you’ve got poor credit or no credit, it can be difficult to get a credit card. But specially designed credit cards for bad credit, or no credit, are designed for people just like you.
There’s a whole market dedicated to credit cards for bad credit. Sometimes people call them ‘bad credit cards’ or ‘poor credit cards’. They are also more commonly known as credit building credit cards.
Who are credit builder credit cards meant for?
Credit building credit cards are for those trying to improve their credit score, They can also be useful for those who are unable to qualify for the best deals in the market.
Some reasons for that could be:
You've declared bankruptcy in the past
You've had a county court judgement (CCJ) against your name
You have no history of borrowing or have never had a credit card
You have a record of missed payments
You're not registered on the electoral roll
Some credit cards for very bad credit even accept people who’ve been bankrupt or had a County Court Judgment against them.
Credit building credit cards can be a good way to rebuild your credit record if you have poor credit history. But you'll have to make your repayments on time and not miss any payments. They are also just as useful in building your credit score if you have no credit history and are applying for your first credit card.
How can you improve your credit record with credit building credit cards?
If you use a credit builder card carefully, you could improve your credit record. By making repayments on time and staying within your credit limit for several months - typically about six months - you'll soon start making a difference.
Paying back what you borrow on time looks good to banks and providers, even if you’ve had debt problems in the past. Credit builder cards are a good way of proving you can pay back what you borrow. Then you might get a better credit score next time your finances are looked into.
Having one of these credit cards to build credit should make it easier for you to get accepted for credit cards, mortgages and loans in future. You’ll also have more options open to you, so you’ll have a better chance of being able to get the best ones on the market.
Read more about how to improve your credit score
What are the features of a credit builder card?
Credit cards for people with bad credit usually have ...
higher interest rates than other types of credit cards
lower credit limits, usually from £100 up to £1,000
easier to to qualify for.
Try to see your credit builder card purely as a way to build your credit, rather than using it to make large purchases. It's a way to establish good borrowing practices and show lenders that you can be a responsible borrower. So if you use it for general expenses and pay off the balance in full every month, you won't pay any interest and the low credit limit won't matter.
How to use a credit builder card
With low credit credit cards, you’re more likely to rebuild your credit record if you can show that you’re a reliable borrower.
You can do this by:
Always paying back what you spend each month in full
Staying in your credit limit by keeping track of your spending through online banking
Avoiding cash withdrawals on your credit card.
Ideally, avoid accumulating a balance of more than 50% of your credit limit, because that impacts your credit utilisation ratio and can affect your credit score.
You’ll need to be patient as it can take a while for your credit score to increase.
Here’s how to use your credit card so you can avoid fees, and not increase your debt.
Even the best credit cards for bad credit have a higher APR than normal credit cards. You’ll have to pay interest if you don’t repay your bill in full every month. So choose a credit card to build credit which has as low an APR as possible to keep your costs down.
Pros and cons of a credit building credit cards
Easy eligibility requirements for those with bad credit
Help you improve your credit score
Increase your chances of getting better deals in the future if you use them responsibly
Interest rates are typically high
Credit limits are relatively low
Can damage your credit history if don't keep up with repayments.
How do I apply for a credit card to build credit?
The process to apply is simple. Follow these steps.
Check out credit building credit cards in our table.
Filter the results according to your needs.
Use the eligibility checker to check if you fit criteria.
Find out more – click ‘See deal’.
Apply for credit card with bad credit.
Don’t worry about using the eligibility checker. It’s a ‘soft check’ which means it won’t affect your credit rating.
Are there any tips when it comes to credit building credit cards?
When it comes to finding credit cards for really bad credit, there are a few simple tips you should remember:
Don’t apply for cards you’re not likely to get, and don’t make multiple applications
Use our eligibility checker before you apply
Compare credit cards for bad credit using our table
Check the APR and try to choose a lower one
Use credit builder cards carefully – pay them off in full and make repayments on time
Be patient – a good credit score can take time to build or rebuild.