Best credit cards if you have a bad credit history

If you have a bad or non-existent credit history, these credit builder cards can help you get on the right track and boost your rating.

Credit builder cards are designed for people with a poor credit history and those that don’t have one yet.

These are typically bare-bones deals, that come with conservative limits and relatively high APRs to encourage good credit card spending habits.

Used properly, they can help you get on the right track so you can access more rewarding deals in the future.

You could also find some of the best frugal tips and latest money trends over here.

Compare credit cards for people with a poor credit rating

Don't take interest rates for granted

Keep in mind that you could be offered a higher interest rate than the one advertised.

Credit card companies only have to offer 51% of customers the advertised rate, and if you've got a poor credit history, you're unlikely to get it.

It's worth checking what the maximum APR is, as you'll only be told about your higher rate AFTER you've applied and gone through a credit check.

Best 0% credit builder cards

Credit builder cards are typically no frills, but some deals have 0% offers on new purchases, balance transfers, or fee-free withdrawals abroad.

Card

Minimum credit limit

Maximum credit limit

Advertised APR

Aqua Advance Credit Card

£250

£1,200

34.9%

Marbles Credit Card

£250

£1,200

34.9%

Barclaycard Forward Credit Card

£50

£1,200

34.9%

Aqua Reward Cashback Credit Card

£250

£1,200

34.9%

The Aqua Advance Credit Card offers 34.9% interest, but this rate will fall by 5% each year for three years if you stay within your limit and make the minimum payment on time.

Aqua has multiple credit cards on offer, including Aqua Reward Cashback Credit Card, which gives you 0.5% cashback (up to £100 per annum) on everything you buy.

To qualify for cashback, you must stay within your credit limit and make your minimum repayments on time.

Marbles Credit Card offers interest of 34.9% plus a potential hike in credit following a limit review after the first three months of opening an account.

Cheapest credit builder cards

While the option of perks and interest-free borrowing has obvious appeal, it’s worth noting that some of the credit cards mentioned above come with hefty representative APRs.

So, after the initial window has expired or if you don’t pay off your balance in full each month, you could find yourself paying an interest rate of 34.9% or more on any outstanding debt.

If you're looking to keep the same credit card for some time, there are several cards with an interest rate of under 30%.

Compare credit cards for people with a poor credit rating

Card

Minimum credit limit

Maximum credit limit

Advertised APR

Vanquis Chrome 24.7% Credit Card

£250

£1,000

24.7%

Tandem Bank Journey Credit Card

£150

Subject to status

24.9%

Tesco Bank Foundation Clubcard Credit Card

£250

£1,500

27.5%

Aquis Visa Credit Card

£250

£1,000

29.8%

As you can see the Vanquis Chrome 24.7% Credit Card offers the cheapest deal right now, although some people could be offered a much higher rate.

Tandem and Tesco's credit builder cards are among the cards charging the lowest maximum APRs, although Tesco's card also allows you to collect Clubcard points.

Golden rules

There are a couple of things to keep in mind when it comes to using credit builder cards.

First of all, make sure you read the requirements very carefully before applying. The last thing you want is to be rejected for a card, thus damaging your credit rating even more.

The loveMONEY comparison centre allows you to check your likelihood of being accepted for all the top credit builder deals before you apply, without impacting your credit score.

Second, it’s vital you pay your balance in full every month if it’s possible. Doing so will boost your credit score and you’ll avoid racking up interest at an extortionate rate.

Compare credit cards for people with a poor credit rating

How to check and improve your credit rating

One of the ways to check your credit rating on an ongoing basis is to use Clear Score. This free service gives you your Experian credit rating, provides personalised product offers and coaches you on how to improve your credit rating.

There are other ways to improve your credit score and some are relatively easy and free, such as registering to vote.

You can read more about credit scores and how to improve them here.

This article is regularly updated

More on credit and debt:

Why have I been turned down for credit?

What REALLY damages your credit rating

How to repair your credit rating

 

Comments


Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.