Compare Credit Cards for Bad Credit

If you have poor credit history, finding the right credit card can be difficult. The good news is that credit cards for bad credit do exist out there and they can be key to repairing your credit rating.

With plenty of options out there, the best step to take is to compare credit cards for bad credit with several different banks and lenders.

Compare credit cards for bad credit

Coronavirus Update: Credit card providers may have temporarily stopped offering credit cards to customers due to the current Coronavirus (COVID-19) pandemic. This may result in a limited choice available to you.

Last updated October 2020

What are credit cards for bad credit?

Credit cards for bad credit are designed for those with poor credit history who are struggling to get a regular credit card.

With poor credit history, it can make getting accepted for a credit card or loan much more difficult. However, a credit card could be one of the very things to help you build up your credit rating.

Remember: Improving your credit score will give you access to credit cards with much better rates. Before applying for credit in any form, read these tips to help improve your credit score.

How do credit cards for bad credit work?

Credit cards for bad credit work just like ordinary credit cards. When you make a purchase, you are borrowing money from a bank which must be repaid at some point.

If you pay straight away or in full each month, you will avoid interest and any negative marks on your credit score. However, if you miss payments or only make the minimum payment each month, this will incur interest and negatively affect your credit score.

If you have bad credit and are looking to improve your score, the best thing you can do is pay in full and on time.

Advantages of a bad credit credit card

The main advantage of a credit card is that you can start to improve your credit score over time. With a card designed for those with poor credit, you can start rebuilding your credit rating. If you work on building your credit score, this also opens up the opportunity for you to take out credit for larger items such as a home or car.

Some other advantages of credit cards for bad credit include:

  • You will get protection on purchases you make - Making purchases with a credit card comes with a degree of protection that you otherwise wouldn’t have if you made a purchase from a debit card.
  • You are more likely to be accepted - Credit cards for those with bad credit are more likely to accept you and have more lenient eligibility criteria.
  • It makes larger purchases more attainable - Purchasing items on a credit card can be much more convenient and makes larger purchases more affordable if you spread repayments.

Remember: Taking on more debt can quickly spiral out of control if you can’t afford to repay. If you are struggling with debt, you can get free and confidential debt advice and support from Stepchange.

Disadvantages of a bad credit credit card

There are some downsides to bear in mind with bad credit cards. The main thing to keep in mind is that you will likely have limits and less favourable terms than you would have with a regular credit card. The main disadvantages of a bad credit credit card are listed below:

  • Higher interest - You may have to pay higher interest rates than with other credit cards.
  • Lower credit limits - Your credit limit is likely to be lower as you are considered more of a risk by the bank.
  • Risk of more debt - A new credit card could lead to more unmanageable debt which would make the situation worse.

If debt has been a problem for you in the past, another credit card does run the risk of making the problem worse. However, if circumstances have changed and you are confident you can make repayments on time, a credit card could help you to repair the damage.

Remember: If you haven’t accessed your full credit report, you can check it for free at Credit Karma. Keeping a close eye on your credit report will help identify any mistakes and fraudulent activity that could have a negative impact on your score.

Credit cards for bad credit FAQs

We have listed out some frequently asked bad credit credit card questions.

Credit cards for bad credit are fairly similar to regular credit cards. Where they differ is usually in higher interest rates and lower credit limits. That’s because lenders view those with less than perfect credit as a higher risk.

Another thing to bear in mind is that you may struggle to find cards with interest-free balance transfers or 0% interest on purchases. Most of the time, bad credit credit cards won’t come with deals like this.

Each lender and type of credit card will have its own lending criteria. Lenders will want details of your income, address history or financial history before they make a decision. It’s best to avoid credit cards with strict criteria or those with large credit limits as you are more likely to be rejected. This can then make it harder to get accepted in the future.

This all depends on how you use your new credit card. If you are confident you can make the payments in full each month, then this is ideal. If you think you will struggle and fall behind, a new credit card could make your score worse.

For those with no credit record, a credit card for bad credit or a credit builder card can be a great way to build up your credit history. With no credit history, lenders will see you as more of a risk than someone with a strong credit rating. For this reason, you may only be able to get low credit limits or high-interest rates.

It will be different for everyone and will depend on your personal circumstances and financial history. There’s not one card that’s ‘best for poor credit’.

Compare now to find the best bad credit credit card for you.

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