Credit Cards for Bad Credit Scores

If you have a good credit rating, then you'll be able to choose from the full range of best buy cards, and take advantage of features such as cash back, balance transfers, and rewards.

If your rating isn't so good, your choice is more limited. You may be able to get one of the higher rate cards which have less stringent acceptance criteria, or even be offered a card with a higher APR than that shown in the advertisments. In extreme cases, you might have to settle for a secured card which you need to load with funds before you can use it.

There is, however, a middle ground of cards specifically aimed at people with a poor credit history, or those new to finance who have nothing on their file at all. These cards have little in the way of features, and have interest rates way above those found elsewhere. While they aren't a good choice for long term borrowing, they make an ideal way of re-establishing your credit rating by building up positive data on your file through responsible use.

Advantages of Poor Credit Credit Cards

• High Approval Rates - as these cards are specifically aimed at people with low credit scores, their approval criteria are fairly lax. Even if you've made a few late payments in the past, you're still likely to get accepted so long as it's nothing too serious and your other circumstances look okay. Depending on the card, you may even be able to get away with some serious black marks on your records such as CCJs or defaults, although these will generally have to have been satisfied if your application is to be successful.

• Build Up Some Positive History - like all credit-based products, the way you use them will be recorded on your file. This is how your rating became tarnished in the first place of course, but it works both ways. If you use your card responsibly, stay within your limits, and make your repayments on time, these facts will also be recorded on your file. Over time, this 'good' history will start to outweigh the bad, and the process will only accelerate as the older black marks begin to drop off under the six year rule.

The Disadvantages

• They're Expensive - credit card issuers are obviously taking something of a risk when they lend money to people with adverse history on their files. They need to compensate for this by charging higher interest rates so that the people who do pay their bills make up for those that don't. There's also the fact that there's little competitive pressure to push down rates such as you'd find on more mainstream cards.

• Few Features - You're not going to be finding any balance transfer offers or reward points programs on these cards. In fact, you'll find little other than the chance to take out finance at high rates.

• Low Borrowing Limits - a typical card of this type will have a very low limit of maybe a couple of hundreds of pounds. This might actually be a good thing at first so you don't go mad spending you new 'riches'. In any case, as you continue to use the card within the terms of your credit agreement, you'll generally find your limit is pushed up gradually.