Compare credit cards for poor credit

What is a ‘bad credit’ credit card?

Cards of this type are aimed at people with a less than perfect credit score or credit history.

It used to be tough to get approved for a credit card with a poor credit history, but these days financial providers are increasingly looking to different sectors of the market where they can offer specialist credit cards.

Credit cards for people with bad credit typically have higher interest rates, lower credit limits and not much in the way of extra benefits. However, they’re easier to get approved for and are designed to help you improve your credit rating over time – therefore increasing your chances of approval for other credit products in the future.

What is my credit score?

Your credit score is simply an indicative number calculated from lots of data points in your credit history. It’s a useful gauge for how strong a position you’re in when it comes to applying for credit, and financial providers will consider it when they assess whether to approve you for something like a credit card or loan.

There’s no single standardised way of calculating credit scores, with credit reference agencies (CRAs), banks and credit card companies using their own rating systems when assessing a customer’s credit rating and creditworthiness.

There are 3 main CRAs in the UK – Experian, Equifax and TransUnion. They each have different credit scoring scales, which we look at below.

• Experian: 0–999
• Equifax: 0–1,000
• TransUnion (formerly Callcredit): 0–710

Depending on your score, you’re said to have excellent, very good, good, fair, poor or very poor credit:

What financial products can I get with bad credit?

There are a number of financial options to consider if you have a bad credit score, some of which don’t involve a credit card at all.

• Specialist credit cards for bad credit. A number of banks offer credit card options for people with a poor credit history. These cards typically have low credit limits, higher interest rates and few extra benefits, but they do allow individuals to improve their credit rating over time. It’s not recommended that you apply for one of these cards if your objective is to use it to tackle existing debt, as this can simply lead to greater debt. Work on clearing existing debts before applying for a card like this.
• Debit cards. A good way to avoid debt is to steer away from credit and only spend what you have, by using a debit card to pay for your purchases. Although using a debit card is unlikely to affect your credit rating, a current account with sensible, regular debits (payments) going out is a good sign to a potential lender. Banks sometimes offer cash incentives to switch your current account (which you get your debit card with), so if you are thinking that a debit card could be a good option for you, make sure you compare the best banking deals.
• Prepaid cards. Prepaid cards are similar to debit cards in the sense that you’re spending only what you have. Unlike a debit or credit card though, you load funds onto the card before using it. These cards also don’t affect your credit rating and don’t charge interest, so they can be a good way to build up your budgeting skills. Most prepaid cards are either a Visa or Mastercard, so you should be able to use them in the same places that you’d use your credit or debit card. Compare prepaid cards.
• Bad credit personal loans. Personal loans are traditionally used to borrow larger amounts of money to help pay for a significant purchase or to consolidate debt. There are some bad credit personal loans on the market that cater especially to people with poor credit ratings. Again, the interest rate can be higher but the rate is often fixed, making it easier to budget. If you keep up with your loan repayments, this can help you to rebuild your creditworthiness.
• Guarantor loans. With a guarantor loan, a friend or family member agrees to step in and make repayments if you fail to do so. Lenders will be able to consider the second individual’s credit rating as well as your own.

Make sure you compare credit cards for people with a poor credit history before you make an application. You shouldn’t apply for every card and loan under the sun, because multiple applications for credit in a short space of time can ring alarm bells with potential lenders and could actually harm your credit score.

There are steps you can take to improve your credit rating and manage your finances so that you can live free of debt. A good place to start is by requesting a copy of your credit report from the CRAs and identifying the negative listings on your file.

It’s also worth using an ‘eligibility checker’ before you apply for a credit card or loan, as this will show you the deals you’re most likely to get accepted for, without affecting your credit score.

List of documents needed for credit card application

Bottom line

If you have a low credit score or a poor credit history, the good news is there are financial options open to you.

There are several specialist financial products available to enable you to take control of your finances and improve your credit score, including credit cards for people with bad credit. With reponsible use, these financial products could help you improve your credit rating and help you unlock better financial deals in the future.

Frequently asked questions

• How are credit cards for poor credit different to other credit cards?

  With ‘poor credit’ credit cards, you’ll likely have a lower credit limit and a higher interest rate compared to other credit cards. Your card is also unlikely to have features such as cashback and rewards.

• How do I check my credit score?

  You can find out your personal credit score by contacting a credit reference agency. The 3 main credit reference agencies in the UK are Experian, Equifax and TransUnion.

To make sure you get accurate and helpful information, this guide has been reviewed by Rachel Wait, a member of Finder's Editorial Review Board.

Written by

Chris Lilly

Head of publishing

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

Chris's expertise

Chris has written 602 Finder guides across topics including:

• Loans & credit cards
• Building credit
• Financial health