Build up your credit rating with one of our selection of credit cards for people with poor or no credit history. Compare cards with the best deals on balance transfers and purchases, the lowest standard rates and the best cashback or rewards schemes.
Bad credit guide
Lenders are a lot more particular about who they’ll offer credit cards and loans to these days: if you have a less than perfect credit history then you’re unlikely to qualify for the best deals such as 0% balance transfer and purchase offers.
Not only that, but you may find it hard getting accepted for a standard credit card, one without any enticing 0% offers, but why is this the case? Let’s take a look…
Each time you apply for a credit card, the lender will carry out a credit check to look at your credit history and assess whether or not they consider you a ‘credit risk’ – that is, a borrower who is likely to default on their debt by failing to keep up with repayments.
The problem is, it’s not just genuine ‘credit risks’ that have a low score; you could find that you struggle to get credit if you have never had credit before, are not on the electoral roll, are on a low income, are self-employed or in part-time employment.
However, even if you have a low credit score, you may still have access to credit via a bad credit credit card.
Designed for those who don’t qualify for conventional credit cards, bad credit credit cards carry higher interest rates to reflect the greater ‘risk’ to the lender, but if you clear the balance in full at the end of each month you won’t incur any interest charges on your purchases.
So if you are looking for a credit card but have a poor credit rating or have had an application rejected by more mainstream lenders, then it may be worthwhile applying for a bad credit credit card.
What are the benefits of using bad credit credit cards?
If used correctly - which means paying off the balance in full each month, by the date specified on your statement - a bad credit credit card is a great way to build your credit history and improve your credit score. That is why they’re also sometimes referred to as credit-builder credit cards.
And if you regularly use your card and make sure you pay your debt on time each month then you could see an improvement in your credit score in just six months.
This could lead to an increase in your credit limit (bad credit credit cards tend to start with a low limit), a reduction in your interest rate or you may even be able to apply for a mainstream card with a lower interest rate or an introductory offer.
Credit cards also offer a convenient way to pay, particularly for online purchases, and bad credit credit cards offer the same consumer protection as any other credit card.
This means that if you make a purchase and your goods are faulty, are never delivered, or the company providing a service you have paid for goes bust, then your card issuer is jointly liable for any claim you make under Section 75 of the 1974 Consumer Credit Act as well as the Consumer Credit Directive.
What are the drawbacks of using bad credit credit cards?
The main drawback of bad credit credit cards is the high level of interest they carry, which means that they should not be used for any long term borrowing.
Only borrow as much as you will be able to pay off at the end of each month so that you don’t get bogged down with interest repayments and your debt doesn’t spiral out of control.
Another downside is that bad credit credit cards rarely come with any introductory offers, such as interest-free periods or rewards.
Why compare bad credit credit cards with MoneySupermarket?
Although they all come with relatively high interest rates it is still worth comparing bad credit credit cards as the market is now becoming much more competitive.
For instance, although still uncommon, you can now get bad credit credit cards that offer interest-free periods or rewards on purchases.
It’s also worth comparing the interest rates on offer, even if you are planning on paying the balance off in full each month.
Representative annual percentage rates (APR) can range from around 30% to 60%, so getting a card with the lower APR could save you money should you not be able to pay the full balance.
And by using MoneySupermarket’s price comparison tool you can instantly compare a full range of bad credit credit cards and make an informed choice on the right card for you.
Your personalised chance of approval
We’ve taken the details you gave, and used them to show you personalised scores to tell you the chance that your application for each card would be successful.
Why is this important?
Every time you apply for a credit card, a mark is left on your credit score. That means it’s better to get it right first time. Your scores help you understand which cards you have the strongest chance of getting.
The higher the score, the stronger chance you have of getting the card. If you see a very low score, you’ve probably better off choosing a different card.
- Consider a different card
- Not eligible
- Your chances are good
- You've been pre approved
If you see a high score, you can be fairly confident. The scores aren’t a guarantee, as acceptance of your application is at the sole discretion of the card issuer, but they should help guide your choice.
In some cases, we will not be able to display a score for a product because we do not have enough information about the card issuer’s acceptance criteria or we have not been able to match your details at the credit bureau.
We work closely with our partners to improve our eligibility scores for all products that are of interest to you.
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