<Credit cards

If you have a low credit score, getting approved for a standard credit card can be challenging. A bad credit credit card is designed to be more accessible, giving you a way to build or rebuild your credit history.

These cards typically come with higher interest rates and lower credit limits, reflecting the increased risk for lenders. While you might not find them offered by major high street banks, there are specialist providers that cater to those with a less-than-perfect credit history.

Used responsibly - by making payments on time and staying within your limit - a bad credit credit card can help improve your credit score over time.

As with all credit cards, bad credit credit cards offer a maximum spend limit. However, this credit limit is generally far lower compared to a standard credit card – typically somewhere between £200 and £1,500. 

This is because lenders view those with bad credit as higher risk - with the chances of defaulting on debt being more likely compared to someone with good credit. Higher credit limits tend to be offered to borrowers who have a higher credit score and higher income, as this suggests financial reliability meaning they're more likely to repay what they owe.

However, if you use your bad credit credit card carefully and you repay what you owe in full and on time without exceeding your credit limit – your provider might increase your credit limit at regular intervals.

Bad credit credit cards also tend to offer higher interest rates compared to standard credit cards, making it even more important to pay off your balance in full each month.

Put simply, your credit score is a number that tells lenders how responsible you are with borrowing. It's used by lenders to assess whether you should be offered credit.

All your credit contracts, everything from a monthly phone contract or broadband deal to your overdraft, mortgage and store cards, are reported to three credit reference agencies (CRAs) – Experian, Equifax and TransUnion. Find out more in our guide on how CRAs work.

Each agency calculates your credit score based on your track record of paying bills on time and keeping within your borrowing limits. This record is your credit history. If you’ve been late on a few repayments or defaulted entirely on some bills, you're likely to have a low score or what's commonly known as bad credit.

How to get a bad credit credit card

The process for getting a credit card for bad credit is just like getting any other card. Just follow these simple steps:

Use an eligibility tool

--If you have bad credit, using an eligibility tool like through our partner at Experian is the best way to protect yourself from damaging your credit further by applying for cards you’ll get rejected for. Instead, the tool shows you the cards you’re most likely to get and because it uses a “soft search” credit check, you can use it as many times as you want without affecting your credit score. --

Compare bad credit credit cards

--Once you get your results, you’ll ideally want a card that offers the lowest interest rate for the highest credit limit you can get, but you’ll also need to prioritise what’s important to you based on your needs. The results are based on your likelihood of approval, so you can be confident about getting the card you pick.--

Fill out an application

--It’s easiest to apply for a credit card with bad credit online, but you can also apply by phone or by visiting a branch. You’ll need to provide your name, contact number and other financial details. It can take a week or more to find out if you’ve been accepted, although most online providers will let you know instantly. Once you’ve been accepted, most credit cards arrive within 10 working days.--

If you have bad credit, the last thing you want is to hurt your credit score further.

An eligibility tool uses information that you provide about your individual finances to match you with the cards that you can get.

Your personalised results are based on your likelihood of approval, so you can be confident about getting the card you pick and avoid a rejected application that could negatively affect your credit record if you have to apply for another card soon afterwards.

  • Use an eligibility tool. Always use an eligibility tool to help you find cards that you can get and avoid a rejected application.

  • Pay your balance in full. Clearing your balance in full will help you avoid the high interest charged on bad credit credit cards. Doing this for several months should also help improve your credit score.

  • Avoid withdrawing cash. Cash withdrawals using your credit card are something you should avoid at all costs - unless it’s an emergency. Not only does it incur a fee, you’re also charged daily interest until it is paid off.

  • Pay at least the minimum payment. If you’re unable to pay off the full balance, make sure you at least make the minimum payment by the due date. Failing to do so not only incurs a missed payment fee, but also leaves a mark on your credit report.

Other options for borrowing with bad credit

Credit cards are only one way to borrow money if you have bad credit. There are other products that may be more appropriate depending on how much you need to borrow, and their eligibility requirements. Here are some alternatives:

Bad credit loans

--These are usually [unsecured personal loans](https://www.money.co.uk/loans/unsecured-loans). They are meant for those with poor credit histories – or those with a limited or no history at all – who are usually excluded by mainstream lenders.-- --Interest rates are typically much higher on bad credit loans than on normal personal loans. This makes them an expensive option for borrowing money. There might be strict limits on the amount you can borrow too.--

Guarantor loans

--[Guarantor loans](https://www.money.co.uk/loans/guarantor-loans) are personal loans that require a close friend or family member to act as a guarantor. This means they agree to repay the loan for you if you're unable to.-- --The interest rates are often lower than for bad credit loans because the lender has added security that the loan will be repaid.-- --However, your guarantor should be aware of what they’re signing up to as being a guarantor is a major commitment. They will also need a good credit score and be a homeowner.--

Credit union loans

--Credit unions offer savings accounts and loans to local communities. They are often low-cost and significantly cheaper than other lenders. If there's one in your area, they could be a good option.----To borrow from a credit union, you usually have to become a member and share a common bond with other members. This could be living in the same area or working for the same company. --

Budgeting loans

--These are [interest-free loans from the government](https://www.gov.uk/budgeting-help-benefits/what-youll-get). The maximum amount you could get is £812 and the money must be used for certain expenses, like advance rent or funeral costs. To be eligible for a budgeting loan, you must be receiving certain benefits from the government.-- --If you're already being paid Universal Credit instead of these benefits, you may be able to get a Budgeting Advance instead. You can apply for a budgeting loan on the gov.uk website. --

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About the author

Lucinda O'Brien profileLucinda O'Brien
Lucinda O'Brien has spent the past 10 years writing and editing content for regional and national titles. She applies her industry knowledge to ensure readers can make confident financial decisions.

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