There is relief out there
If you’re the kind of person who has a bad credit rating, finding someone to give you a credit card can be tough.
True, there are certain types of loans (called Bad Credit Loans) out there, but a loan is often seen as a ‘big deal’ – if it’s only small purchases or spending you want to cover, cards can certainly seem like an easier option.
Thankfully, there are a number of credit cards available for bad credit individuals that could not only provide the credit you’re after, but even help improve your bad credit rating if used properly.
These companies may be able to help
While most companies have restrictions on who they give credit cards to, three companies – Capital One, Vanquis and Aqua – offer special credit cards for bad credit holders.
The good news is that providing you’ve not been registered bankrupt in the last 12 months, are on the electoral roll and have some form of good credit in your history, you could be approved for one of these cards relatively easily. All three companies have extensive experience working with people who have a bad credit rating, so it’s likely that could help you if you’re need of some quick and simple credit.
Don’t rush in
Not surprisingly though, such credit cards come with a few catches. As already mentioned, there are criteria that need to be met before you can consider applying and sometimes, it’s things like not having a permanent address or not being on the electoral roll that can be responsible for a poor credit history forming in the first place.
More importantly, however, is the interest rate tied to these cards – clocking in at between 35 and 40%, they’re substantially more expensive than more traditional cards which can potentially create more problems than solutions in terms of debt. That said, the credit limits on such credit cards are often restricted to between £150 and £1,000, making it difficult for you to go overboard with spending and get into trouble further down the line.
This is not a quick fix
As well as being a good source of quick cash for people with bad credit though, these cards can actually help repair a bad credit rating if used responsibly – regular payments can raise your credit rating and leave you with more options to get credit elsewhere.
What’s more, the card providers often lower the interest rate and raise the spending limit if you can show responsible use of the card, so there’s the option for it to be a long-term source of credit rather than just a quick fix.
Credit cards for bad credit…
• Are offered by a select number of lenders
• Have higher rates of interest than regular credit cards
• Tend to have lower credit limits initially
• Have restrictions on the types of applicants they accept
• Can have their rates lowered and credit limits raised if you use them responsibly
• Are easy to apply for and can be approved quickly if you fit the criteria