Bad credit current accounts

Bad credit current accounts offer the basic features of a standard current account but are available to those with a poor credit score. You can compare the best accounts at MoneySuperMarket.

Current accounts for those with bad credit - Ordered by monthly fee - lowest to highest

    • Provider/Product name Activeplus

      Activeplus

    • Monthly Fee No monthly fee
    • Operate by Online Phone Post Office SMS Mobile App ATM
    • Product Type Basic Account
    • Customer Service Rating Currently unrated
    • Go to site

      Phone

      More details

    Exclusive

    Exclusive to MoneySuperMarket: No Monthly or ATM fees for the first three months

    Great for
    Up to £250 overdraft and £1,000 Direct Debit cover available - subject to approval
    Add Creditbuilder to your account at no extra cost
    But be aware that
    Normal fees apply after three months
  1. Great for
    Online Banking
    Easy application, instant acceptance with no credit checks
    But be aware that
    There is a fee of £0.75 per UK ATM withdrawal
    There is a dormancy fee if the account isn't used for 120 days
  2. Great for
    Up to £250 overdraft and £1,000 Direct Debit cover available - subject to approval
    Free UK ATM withdrawals, Direct Debits and Standing Orders
    But be aware that
    Must be a UK resident aged 18+
  3. Great for
    Online Banking
    Building credit rating
    But be aware that
    There is a £9.95 monthly fee
    There is a dormancy fee if the account isn't used for 120 days
  4. Exclusive

    Receive £10 cashback, no set up fee & no monthly fee for 12 months

    Great for
    Guaranteed acceptance
    Receive a Chip & PIN debit MasterCard®
    But be aware that
    £1.50 charge for ATM withdrawals in the UK
    • Provider/Product name current account

      current account

    • Monthly Fee £12.50
    • Operate by Online Phone Post Post Office SMS Mobile App
    • Product Type Managed Account
    • Customer Service Rating Currently unrated
    • Go to site

      Phone

      More details

    Great for
    Cashback rewards - earn up to 3% at participating retailers
    FREE mobile app
    But be aware that
    There is a £12.50 monthly fee
    50p charge for ATM withdrawals in the UK
    • Provider/Product name Managed Account

      Managed Account

    • Monthly Fee £17.50
    • Operate by Online Phone Branch Post Post Office SMS Mobile App
    • Product Type Managed Account
    • Customer Service Rating
      Great
      66%
      OK
      25%
      Poor
      9%
    • Go to site

      Phone

      More details

    Great for
    No ATM withdrawal charges in the UK or hidden fees
    Personal customer service to help you manage your money

Bad Credit Current Accounts

The vast majority of us require a current account to help us manage our finances, but if your credit score isn't up to scratch, you could find it a struggle to get one.

If this sounds like a familiar story, it's worth applying for a bad credit current account, designed specifically for those with poor credit ratings.  

There are generally two types of account to consider – a basic bank account or a managed bank account. 

Basic bank accounts are offered by many of the big high street banks and are free-of-charge. They won’t offer an overdraft or chequebook but will come with a debit card with which you can use to withdraw cash from an ATM and pay for items in stores and online.  

But some of these accounts will still require a credit check to be carried out – and if you have a criminal conviction for fraud or are an undischarged bankrupt, you're very likely to be turned away.   

Managed bank accounts, on the other hand, are less likely to require a credit check. But, in return, you will usually have to pay an opening fee and/or a monthly fee for operating the account. 

Who are bad credit current accounts suitable for?

If your credit rating is fairly low, perhaps because you've missed several bill repayments or been made bankrupt in the past, you could find it hard to get accepted for a standard current account. 

But, as bad credit current accounts have more flexible acceptance criteria, you won't be automatically turned down.  

However, it’s often the case that banks won't offer you a bad credit current account unless you specifically ask – but by doing this or comparing accounts at MoneySuperMarket, you won't have to miss out.

What do bad credit current accounts offer?

With a bad credit current account, you'll be able to pay your bills and rent or mortgage repayments by direct debit. 

Paying by direct debit will ensure you never miss a payment, which, in turn, will help you to build up your credit history. As you do this, you'll increase your chances of being accepted for a more competitive standard current account in the future.

But paying by direct debit also means you could qualify for a cheaper deal on certain household bills. Many energy companies, for example, will offer a discount to customers paying by direct debit.

On top of this, you'll be able to arrange for your salary, benefits and tax credits to be paid into your bad credit current account. 

Managed accounts, on the other hand, tend to come with a prepaid card which you must top up with funds in advance. You can then use this card to make purchases as normal, and a number of cards even offer cashback on your spending. In addition, you can use the card for cash withdrawals, but be aware you might have to pay a fee.  

What are the disadvantages?

The main drawback to managed bank accounts is that they can be expensive. You could be paying as much as £12.50 to set up the account and a further £12.50 a month for the service charge - plus ATM withdrawal fees on top.  

So if you plan to apply for a managed account, be sure to shop around and compare fees carefully – you can do this right here at MoneySuperMarket. 

Another drawback to bad credit current accounts is the lack of overdraft facility. However, this isn't necessarily a bad thing as it's easy to become dependent on an overdraft, and not having one can encourage you to manage your finances better. But be aware that if there are insufficient funds in your account when a direct debit is due to go out, you could be charged a fee. 

In addition, current accounts for those with poor credit ratings are not competitive. This means you won't earn interest on in-credit balances as you would do with the most competitive standard current accounts. 

But, on the plus side, current accounts for those with bad credit scores are a great starting point and as you build up your credit rating, you'll have a greater chance of being accepted for a more competitive standard current account in the future.

You can compare a wide range of bad credit current accounts here at MoneySuperMarket.

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