What are credit cards for bad credit?
What are credit cards for bad credit?
A credit card for bad credit is designed to help people who have misused credit in the past to repair their score through sensible borrowing and repaying.
Whether you have ‘bad credit’ or ‘no credit’ you can take steps to improve your credit rating:
What is considered bad or poor credit?
There isn’t a single answer to this question, as different lenders have different criteria for their product, and calculate your overall score in different ways. However the more negative marks on your credit history – such as bankruptcies, county court judgements or missed repayments – the less likely you’ll be accepted if you apply for credit.
Will a credit card for bad credit help me if I have a lot of debt?
It will depend on how you use the card – if you make your payments on time you’ll avoid paying any interest, which means you can focus on other existing debts. However if you don’t use the card responsibly then you’ll end up paying a much higher interest rate – which won’t help at all.
How should I manage my credit card?
Here are some tips for using your card responsibly that will help you avoid paying more than you have to in interest, so you can improve your credit score:
- Set up a direct debit so you never forget to make a repayment
- Don’t use too much of your credit limit – be aware of how much you can afford to pay back
- Avoiding taking out further lines of credit
What other types of credit cards could I use?
If you have a limited credit history, rather than ‘bad credit’, you’ll benefit from a credit-builder credit card – these work in much the same way as credit cards for bad credit.
When you’ve improved your credit score, you’ll likely qualify for a bigger range of cards, including:
- 0% interest credit cards, which offer a set period of usually 12 months – during which you won’t be charged on interest. You can use these cards to make purchases or transfer existing debts from credit accounts that currently charge interest.
- Reward credit cards, which actively reward you for spending on them – and offer rewards such as cashback or store loyalty points like Clubcard or Nectar points
Credit card comparison
If you’re applying for a credit card, you might be able to find a better deal if you look through offers from different providers before taking one out. With MoneySuperMarket you’ll be able to search through multiple credit cards and compare them by a range of factors, including their interest rates and any benefits and rewards they come with.
All you need to do is answer a few questions about yourself and your financial situation, and our Eligibility Checker will show your chances of being accepted for different credit cards. This won’t affect your credit score, so you can run a check without any worries.
Once you know which card you want, you can normally apply by phone, online, or in person if the provider has a high street branch. However, when you do apply, the provider will usually run a hard credit check – which will show up on your credit report – to confirm whether they’ll give you the card. If you’re accepted they’ll tell you your credit limit and interest rate, and soon you’ll be ready to start using your credit card.
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