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05 SEPTEMBER 2024
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Compare Credit Cards For Bad Credit
Some lenders offer credit cards for bad credit. These can be a useful way to spread the cost of a large purchase, and may even help you to rebuild your credit score – but high interest rates mean that your debt could quickly increase, so think carefully before you apply.
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Jump to
- Compare credit cards for bad credit
- How to get a credit card if you have bad credit
- How do credit cards for bad credit work?
- How can a credit card improve my credit score?
- Advantages of credit cards for bad credit
- Disadvantages of credit cards for bad credit
- How to use your credit card for bad credit
- How to apply for a credit card for bad credit
- When will I find out if my application is successful?
- What happens if I’m rejected for a credit card for bad credit?
- Is a credit card for bad credit right for me?
- Credit cards for bad credit frequently asked questions
Credit cards for bad credit are aimed at people with poor credit scores, You might have a bad credit score because you’ve fallen behind with payments in the past, or ended up with defaults, a County Court Judgement (CCJ) or a bankruptcy.
This means you look like a risky prospect to lenders, so your credit card application is more likely to be rejected. Even if accepted you probably won’t be eligible for the best interest rates or promotions.
The good news is that some credit cards are designed to be used by people with a bad credit history – and used well they can even help you rebuild your credit score. However, before you apply it’s crucial to consider if it’s wise to take on more debt, and if you’re in a position to meet the repayments, otherwise you risk further damaging your finances.
Compare credit cards for bad credit
Some lenders offer credit cards for bad credit, so your application is more likely to be successful. However, these are likely to have a lower credit limit than other credit cards, and you may also be charged a higher rate of interest.
This means it’s important to check any fees and charges before you apply, along with the interest rate and representative APR. If you manage your account well – which means making your payments on time and making an effort not to use up too much of your available credit – your credit score should improve over time, making you eligible for better deals in the future. For this reason, these cards are sometimes known as ‘credit builder cards’, and they can also be useful if you’re having trouble getting credit because you have a limited credit history, rather than a bad credit history.
Credit builder cards for bad credit
We’ve listed our pick of the best credit builder cards below, based on how much it will cost in interest to repay a balance of £250, when making only the minimum payment amount each month. This does not include extra fees or any additional spending. Missing monthly payments can harm your credit score.
Provider | Representative APR | Fees & Charges | Rewards | Cost of paying back £250 | |
|---|---|---|---|---|---|
 | 32.9% Representative Example | No late payment fees. No fees for exceeding credit limit | Earn points with every purchase which can be spent on a range of experiences | £28 | |
 | 29.9% Representative Example | £12 late payment fee. No charge for exceeding credit limit | 5 Clubcard points for every £4 spent at Tesco, 1 point for every £8 outside Tesco | £36 | |
 | 24.9% Representative Example | No late payment fee. £12 exceeding credit limit charge | N/A | £36 | |
 | 34.9% Representative Example | £12.00 late payment fee. £12.00 exceeding credit limit fee | N/A | £121 | |
 | 30.9% Representative Example | £12 late payment fee. £12 exceeding credit limit charge | N/A | £123 | |
 | 34.9% Representative Example | £12 late payment fee. £12 exceeding credit limit charge | Up to £30 in your Cashpot, 0.75% cashback at Asda, 0.2% cashback elsewhere | £184 | |
 | 45.5% Representative Example | £12 late payment fee. £12 exceeding credit limit charge | N/A | £192 |
This table is checked and updated regularly. If a brand has more than one product that makes our table only the best that brand offers is shown. We aim to provide accurate information but prices, terms and conditions of products and offers can change, so double-check first. Credit card data is provided by Fairer Finance.
» COMPARE: See best credit builder cards
0% interest cards for bad credit
If you have a poor credit score, you might not be eligible for some of the best interest rates, promotions, offers and rewards. However, some providers do offer 0% interest credit cards for bad credit – although the interest free period is likely to be shorter, with a higher APR once the promotional period ends.
Before you apply, it’s important to double check the APR once the introductory offer ends. If you don’t think you will be able to clear the balance in time, consider your circumstances and think carefully about whether it’s wise to take on more debt, as you could end up in a worse position – which could mean your credit score drops further.
The cards listed below have been ordered by the longest 0% interest-free period and then APR. Depending on your circumstances you may be offered a higher APR and/or a shorter 0% interest balance transfer period.
Provider | 0% interest period (up to) | Representative APR | Perks & Rewards | |
|---|---|---|---|---|
| | 12 months | 24.9% Representative Example | N/A | |
 | 12 months | 34.9% Representative Example | N/A | |
 | 4 months | 34.9% Representative Example | N/A | |
 | 3 months | 33.9% Representative Example | N/A |
This table is checked and updated regularly. We aim to provide accurate information but prices, terms and conditions of products and offers can change, so double-check first. Credit card data is provided by Fairer Finance.
» COMPARE: See best 0% purchase cards for bad credit
How to get a credit card if you have bad credit
If you’re thinking of getting a credit card, but worry that your credit score is too low for you to be accepted, you may be surprised to learn that some credit cards are designed for people in your situation.
Bear in mind that you probably won’t qualify for some promotions, and are likely to be offered a lower credit limit and a higher APR. So before you apply, check your credit score and use an eligibility checker so that you only apply for cards you’re likely to qualify for, as unsuccessful applications can further damage your score. If you manage the card well your credit score may improve which means you could be eligible for better deals in the future.
Most importantly, think carefully about why you’re getting a card and if you can afford to make the monthly repayments. A credit card can seem like a solution when money is tight, but interest and charges can quickly accumulate, leaving you in a worse position.
How do credit cards for bad credit work?
Credit cards for bad credit are sometimes known as credit builder cards. These credit cards work in the same way as any other type of credit card: you can use them to make purchases either online or instore, as long as you don’t exceed your credit limit. They are different from debit cards, which debit money straight from your bank account. When you use a credit card, you are borrowing money from the provider, which you will need to pay back with interest. This will be added after a set amount of time, which could be up to 56 days. You can avoid this by paying your bill in full each month.
Each month you will be sent a statement, telling you the minimum amount you need to repay, including any applicable interest and charges. It’s important to make at least the minimum payment, and to pay on time – otherwise, your credit score could be negatively affected.
How can a credit card improve my credit score?
Every time you apply for credit, it will leave a mark on your credit report, which will temporarily affect your credit score. This is more likely to be a problem if you apply for credit several times in a short period of time, because it can give the impression that you’re strapped for cash.
However, if you’re approved for a credit card for bad credit and use it carefully – which means using less than half of your available credit limit, making payments on time, not using it to withdraw cash, and paying at least the minimum amount each month – this will show lenders that you can be trusted to repay your debts. Over time, this could improve your credit score or help to repair a bad credit history.
Getting a credit card isn’t the only way to improve your credit score. Registering on the electoral roll, monitoring your credit report and statements for fraudulent activity and correcting any mistakes can also boost your score.
Advantages of credit cards for bad credit
The main advantages of credit cards for bad credit are:
- You could rebuild your credit score by making small purchases using your card and paying your bill in full each month – or at least making your minimum payment on time, every month.
- All purchases between £100 and £30,000 are covered under Section 75 of the Consumer Credit Act 1974. This gives you some protection if there’s an issue with the item you bought, it isn’t delivered, or the company you bought it from goes out of business.
- As these cards are designed for people with low scores, your application is more likely to be successful – even if you have a bad credit score.
Disadvantages of credit cards for bad credit
Credit cards for bad credit also have some disadvantages:
- You are likely to be offered a lower credit limit compared to other types of credit cards. So if you’re looking to fund a large purchase, this may not be the best option for you.
- Your score could drop further – and your debt could increase – if you don’t manage your card well. If you overspend or miss payments you will incur charges on top of your monthly interest. It won’t take long for your debt to increase, and you may struggle to keep up with the repayments.
- These cards typically have higher interest rates than other types of credit cards. Unless you can afford to repay most, if not all, of your balance each month, credit cards for bad credit can be an expensive way to borrow.
- All credit applications will show up on your credit report, which could mean that your score drops even further. To reduce the impact, apply for one card at a time and check your eligibility to reduce the risk of an unsuccessful application.
How to use your credit card for bad credit
Even though credit cards can be useful, if you’re considering a credit card for bad credit it’s particularly important to think about how and when you will use it. Used responsibly, it can help you to repair a bad credit score, but if money is already tight and you struggle to keep up with the repayments, it could quickly increase your debt and leave you in a worse position.
To get the most out of your card, keep the following tips in mind:
- You will probably have a low credit limit to begin with, so resist the temptation to max out your card. Instead, plan to spend a small amount each month to keep your credit utilisation low, and show lenders that you are not overly reliant on credit.
- Make your payments on time – and pay more than the minimum amount, if you can. Even better, set up a direct debit. This shows lenders that you can be trusted to repay your debt on time, which is particularly important if you have had debt problems in the past. This will not only protect your credit score, but it will also mean you’re not hit with late payment charges.
- If possible, repay your balance in full each month. This not only keeps your debt to a minimum, but it also means you won’t pay any interest on your purchases.
- Don’t use your card for cash withdrawals or cash advances. You will incur additional interest and charges when you do this, and lenders often see this as a sign that you’re not managing your money well.
How to apply for a credit card for bad credit
Before you apply for a credit card, think carefully about whether taking on more debt is right for you, and take a look at your budget to assess if you will be able to manage the repayments. Next, check your credit score and eligibility, so that you don’t risk damaging your score further with an unsuccessful application.
Think about how you plan to use the card and compare the ones you are most likely to be eligible for. The following considerations should help you decide which one is best for you:
- What is the annual percentage rate (APR)? This is the amount you will be charged in fees and interest over a year if you don’t clear your balance in full each month.
- Are there any fees and charges for going over your limit or paying late, using the card abroad, and for returned payments (when payment can’t be collected)? There may also be an annual fee, and charges for making balance and money transfers.
- Can you afford the minimum monthly repayment to be made each month?
Once you’ve made your decision, you can apply for a credit card online, or in person at a branch of the relevant bank.
You will usually need to provide some basic information for the provider to run a credit check. This includes:
- Address details for the last three years.
- Bank account details.
- Details of your income.
- Contact details, including email address and phone number.
When will I find out if my application is successful?
If you apply online, you may get an instant decision, but it could take a few days if the provider needs to check some additional details. If you apply by post, it may take a few days longer.
Once your application is approved, you will need to sign a credit agreement. You can do this digitally if you applied online, but if you applied in person you will be sent paperwork to sign and return, which means the process takes a little longer.
Don’t forget that you’re under no obligation to continue with the application. It’s important to read the small print to check that you’re happy with the credit limit, interest rate, and other details such as the minimum payment amount, fees and charges – some of these may have changed since you applied.
Even if you do sign, you have a 14-day cooling-off period, which means you can cancel the agreement without giving a reason. However, if you have already used the card you will need to pay back any money borrowed, plus any interest due.
Once the paperwork is signed, your card and PIN will be sent in the post, which could take up to 10 days. Some providers offer a virtual card that you can add to your digital wallet and use straight away.
What happens if I’m rejected for a credit card for bad credit?
It’s disappointing to be refused a credit card, especially when you already feel that you have limited options available to you. It’s unlikely that the lender will give you a reason for its decision, but may be due to one or more of the following:
- You have a history of missed payments or defaults.
- You have exceeded your credit rating on other accounts.
- You already have a large amount of credit.
- You’ve made a number of applications in a short period of time.
- You don’t have much credit history.
- You haven’t passed affordability or basic eligibility checks, perhaps because you don’t have a regular income.
- You’re not on the electoral roll, so lenders can’t verify your identity.
- There’s fraudulent activity or mistakes on your credit report.
Resist the temptation to apply again straight away because it is likely to make the situation worse. Each application will leave a mark on your credit report, giving lenders the impression that you’re experiencing financial difficulties, and making it less likely you will be approved in the future.
Instead, you can ask the lender which credit reference agency it used and check your credit report for free. This can help you spot and correct any errors and identify steps you can take to improve your chances of being accepted next time. You can also use eligibility checkers to carefully target future applications to reduce the risk of being turned down again in the future.
Is a credit card for bad credit right for me?
Getting a new credit card can be useful, and could even help you to repair your credit score – but that doesn’t mean it’s necessarily the best option for you.
Unless you’re confident that you can resist the temptation to overspend, you may end up with a larger debt and a poorer credit score than you started with. This is a particular risk with credit cards for bad credit as they often have higher interest rates than other types of cards, which means your debt can quickly increase.
For this reason, it may be better to focus on paying off your existing debts and improving your credit score – which could mean you’re eligible for a better deal in a few months.
If you’re applying for a credit builder card because of financial difficulty, consider seeking free debt help from charities such as:
Credit cards for bad credit frequently asked questions
The only way to find out if you have bad credit is to check your credit score with credit reference agencies like Experian and Equifax, or via platforms like ClearScore and Credit Karma.
Different agencies calculate your credit score in different ways, but your credit score will always be a three-digit number – and the lower the number the worse your score. As a guide, you would be considered to have a bad credit score if it is less than the numbers below, with the UK’s three main credit reference agencies:
- Experian: 720 out of 1,000
- Equifax: 579 out of 1,000
- Transunion: 660 out of 710.
There can be several reasons you have a bad credit score, including:
- Missing payments or exceeding your credit limit
- Already having a large amount of debt
- Past bankruptcies, defaults or County Court Judgements
- Mistakes on your credit file
- Identify theft
- Making several credit applications in a short period of time
- Not being on the electoral roll, may mean a lender can’t verify your identity.
From a lender’s perspective, it doesn’t make much difference why you have a low credit score. However, when people talk about ‘bad credit’ they usually mean they have made mistakes in the past, and have fallen behind on payments, defaulted on credit agreements or taken on too much debt.
However, you could also have a poor credit score simply because you don’t have a credit history. This could be because you have just turned 18 so haven’t been eligible for credit in the past, or perhaps because you have recently moved to the UK or have never borrowed money before.
Credit builder cards are designed for people who have low credit scores, either because they have a poor credit score, a low income, or haven’t used credit in the past. They usually have a lower credit limit and higher APR than other types of cards but, if managed well, they can help you to repair your credit rating so that you qualify for better deals in the future.
It’s harder to get a credit card if you’re unemployed, but it’s not impossible. Lenders will require you to have a minimum income to be accepted, and you can expect to have a low credit limit to ensure that you can afford to make the monthly repayments.
It’s important to check the small print when you sign a credit card agreement, as you may not get the advertised interest rate. This is because lenders have an obligation to give only 51% of people accepted for a card the advertised APR – so you may be offered a higher rate. Typically, the best interest rates are available only to people with good credit scores.
Dive even deeper
Can You Apply For A Credit Card With Bad Credit History?
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