Finding a credit card if you’ve missed debt repayments in the past might seem an impossible task, but there are cards specifically designed for those with a less-than-perfect credit score.
These are known as ‘credit builder’ cards – they’re specialist credit cards designed to help those with poor credit scores re-build their credit ratings.
Who they’re for
These cards are for people who have a bad credit score.
Your credit score is likely to be bad if you’ve had problems with debts in the past, maybe missing credit card or loan repayments, or if you’ve been declared bankrupt or had a County Court Judgement (CCJ) against you.
You might also have a ‘bad’ credit score if you’ve never had a credit card, mortgage or loan before, as there’s no evidence of how you might manage any borrowing.
Here’s how to
. check your credit score What to look out for
Credit builder cards can provide a lifeline to people who people who aren’t eligible for any other type of credit.
However, as customers are considered high risk by the card provider, they charge high interest rates.
So if you’re considering this type of card, you must be certain you can clear your balance in full each month.
You must always make your payments on time too, otherwise you could be hit with steep charges and you’ll damage your credit score further.
Bear in mind too that credit limits on this type of card tend to be very low, typically starting from around £250, although they will usually rise over time provided you can prove you are able to manage your debts responsibly.
Use our Smart Search facility
If you’ve got a poor credit score, there’s no guarantee you’ll be accepted for the card you’re interested in.
Lenders will have different acceptance criteria, so while one might accept your application, another might turn you down.
Unfortunately, the very act of unsuccessfully applying for credit cards can have a negative effect on your credit score, especially if you’re turned down for several cards in quick succession.
It enables you to enter your details and run a ‘soft search’ of the available cards, which lenders and card providers won’t be able to see. That’s why we’ve developed Smart Search.
The tool will then come up with a list of cards and will show you how likely you are to be accepted for each. With some, you could even be ‘Pre-approved’, subject to routine anti-fraud checks.
Remember: using the tool won’t have any impact on your credit score.
Leading credit builder cards
Here’s our rundown of some of the current top credit cards for bad credit.
Vanquis Bank Chrome
This card has a comparatively low representative 24.7% APR (variable)*.
Bear in mind, however, that you may be charged a higher interest rate than this, depending on your individual circumstances.
Initially, you’ll be offered a credit limit ranging from £250 up to £1,000, again depending on your circumstances, but this limit could increase after five months, and again every five months after that, up to a maximum of £4,000.
Aqua Classic 27
The Aqua Classic 27 credit card offers a free credit report and credit score.
It has a representative 27.4% APR (variable)** which again is lower than many other credit builder cards.
However, you may be offered a higher rate, and even if you aren’t it’s still important to clear you balance in full each month if you want to avoid interest charges.
Initial credit limits range from £250 up to £1,200, but these limits could increase after four months.
You won’t be eligible for this card if you’ve had a CCJ in the last year, or if you’ve been declared bankrupt in the last 18 months.
Tesco Bank Foundation Clubcard
This card enables you to set up e-mail and text alerts to help you make sure you don’t miss any monthly payments. You can also get a free credit report.
The card has a representative 27.5% APR (variable)*** but you could be offered a rate as high as 39.94% APR (variable) depending on your circumstances.
You must earn at least £5,000 a year to qualify for this card, and you’re more likely to be accepted if you haven’t had any CCJs against you in the past 18 months, and if you haven’t had an account closed in the last year due to missing repayments.
*Representative example: if you spend £1,200 at a purchase interest rate of 24.70% p.a. (variable), your representative rate will be 24.7% APR (variable).
**Representative example: if you spend £1,200 at a purchase interest rate of 27.45% p.a. (variable), your representative rate will be 27.4% APR (variable).
***Representative example: if you spend £1,200 at a purchase interest rate of 27.5% p.a. (variable), your representative rate will be 27.5% APR (variable).
In order to keep the rate you are offered, you will need to stay within your credit limit and pay the minimum monthly payment on time.
All cards subject to status and terms and conditions. Over 18s, UK residents only.
Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.