Credit cards for bad credit

What is bad credit?

If you’ve been rejected by lenders in the past, you may think you have bad credit. But remember, the criteria for approval varies from lender to lender. So, some lenders may see you more positively than others.

However, there are some things that most lenders view negatively. These include late payments, defaults, County Court Judgements, Debt Management Plans, Individual Voluntary Arrangements, and bankruptcy. An insubstantial credit history can count against you too – this is a common issue if you’re new to the country or you haven’t taken out credit before.

All these factors will be reflected on your credit report, which lenders use – along with your application form and any other data they hold – to calculate your credit score. Your credit score gives lenders an idea of how you manage your finances, and whether you’re a responsible borrower.

If your credit score is low, this suggests you’re a high-risk customer. As a result, lenders will be less likely to offer you their best deals.

You can get an idea of how lenders see you by signing up for your Experian Credit Score – it’s free, and it gets updated every 30 days if you log in.

What are credit cards for bad credit?

Some credit cards are designed for people with low credit scores. These are called credit builder cards. They tend to have low limits and high interest rates, as this helps the lender reduce risk.

While you’re more likely to be approved for these cards, they’re not to be taken out lightly. High interest rates can end up costing a lot – and, if you can’t pay the card off fully each month, you may build up debt. So, you should always ensure you can comfortably meet the monthly repayments before applying for a credit card.

What is a bad APR for a credit card?

Annual Percentage Rate (APR) helps you understand how much a credit card will cost you each year. It generally takes into account interest and fees. However, there are several different types of APR for credit cards, depending on what you do with them. Learn more about APR here.

APR depends on the type of credit card deal and your eligibility. So, there’s no set number for a ‘bad’ APR. However, you can get an idea of what’s on the market by comparing credit cards before you apply. When you use our comparison services, you’ll also see your eligibility for cards, helping you understand which deals you’re more likely to be approved for. Note that we’re a credit broker, not a lender† – we can help you find credit cards, but we don’t provide them or make the decision to approve your application.

If you have a bad credit score, lenders will probably offer you cards with a relatively high APR. But remember, if you make your repayments on time and pay the balance in full each month, you shouldn’t be charged any interest. However, check the terms to see if you’ll be charged any other fees.

How do you get a credit card with bad credit?

The first thing to do is work out why you’ve been turned down for credit cards in the past. Is there something in your credit report that’s holding you back? Is your credit information up-to-date and accurate? You may be able to take action and improve your credit score, which can help increase your chances of getting the card you are after.

It also pays to reconsider your requirements. Is a credit card really the best option for you, even if you have to accept a low limit and high rates? Remember, if you can’t afford to make the full repayments every month, you may get into debt. What’s more, frequently missing payments may lead to a default or County Court Judgement, which will lower your score even further.

If you’ve decided a credit card is the right choice for you, it’s important to do your research. See what deals are on offer by comparing credit cards, and pay close attention to the features and terms.

It’s also a good idea to check your eligibility for credit cards. By only applying for cards you’re eligible for, you can reduce your chances of rejection, helping you save time and effort. You can check your eligibility rating when you compare credit cards with us. Our comparison service lets you search deals from across the UK market, without affecting your score.

Managing your credit card

If you’ve successfully taken out a credit card despite a bad score, it’s important to look after your account. A well-managed credit card can improve your credit score over time, but missed or late payments will damage it further.

Here are our top tips for staying on top of your credit card account:

  • Pay the full balance on time every month. This means you shouldn’t pay any interest, and you won’t get behind on your payments
  • Set up a direct debit to your credit card account, so you don’t forget to make a payment
  • Schedule your direct debit on your pay day, to help you budget better
  • Try not to take out more credit while your score’s still low, as applications and more debt will lower your score further
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