How to Compare Bad Credit Rating Credit Cards: part 2
Bad Credit Rating Best Buys
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» Suitable for people with a poor credit history or who are new to credit. |
Credit limit from £250 to £2,000. Why? "With all of the cardholder services you'd get with a Platinum Barclaycard - the Barclaycard Initial credit card certainly has nothing shaved off it's value.
Offering free fraud and purchase securities, travel services and shopping discounts - and is a great way to build or rebuild a credit history."
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» Suitable for people with a poor credit history.
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Credit limit from £250 to £2,500. Why? "The Capital One Classic credit card enables people with a less than perfect credit history to rebuild and strengthen their credit score.
Offering an instant decision when you apply online, fraud protection including identity theft services and 2 free credit reports a year."
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» Suitable for people with a poor credit history. |
Credit limit from £250 to £1,600. Why? "From our friends at the Halifax, the aqua card can help to put the points back onto your credit report."
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Bad Credit Rating FAQ's
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Bad credit rating credit cards can give you access to credit that can help you to start rebuilding a poor credit score.
There is now a fair range of credit cards available for people with past credit problems and the guide aims to help you understand what to look for and what to be aware of when you compare bad credit rating credit cards.
What to look for...
- Interest free period
The interest free period on a credit card is the amount of time you have from the first day of your statement to repay your balance in full.
The longer the interest free period, the more time you have to repay the full balance on your credit card statement before you are charged any interest.
Interest free periods usually only include purchases. So, as always, try and use your debit card for any cash withdrawal you may need to make.
- A sensible credit limit
Bad credit rating credit cards generally offer a sensible credit limit.
If you use the card wisely - always repaying your balance and never exceeding your credit limit - the card issuer will likely increase your limit after a few months.
Remember to only spend what you can afford to repay each month.
The Capital One Classic credit card, Barclaycard Initial credit card, aqua credit card and the Vanquis Visa credit card all offer sensible credit limits with the ability to improve your credit history.
- Online account management
Some bad credit rating credit cards will offer online account management facilities.
If you have Internet access, online account management can be a quick and easy way to keep abreast of your credit card balance and to make payments to your account.
The Capital One Classic credit card and the Barclaycard Initial credit card both offer online account management.
What to watch out for...
- High interest rates
Due to the increased liability of lending to people with past credit problems card issuers charge much higher rates of interest on bad credit rating credit cards.
The interest rates charged on purchases alone is generally double than on a standard credit card.
However, if you repay your balance in full each month - the interest free period offered on purchases means that you wouldn't be charged any interest.
- Cash transaction interest rates and fees
Getting your hands on some cash is generally never best done on any credit card, and the higher interest rates found on bad credit rating credit cards are even more reason to use your debit card for cash transactions.
Cash transactions will also incur handling fees and are not included in the interest free period - so even if you repay your balance in full, you will still be charged interest on your cash balance from the date of transaction.
Remember that cash transactions include more than just ATM withdrawals, they also cover getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and gambling transactions.
Don't forget!
- To repay your balance in full
It's really important to repay your credit card balance in full each month.
The best, and easiest way would be to set up a direct debt for the full statement balance to be paid off each month.
If you only use your bad credit rating credit card for purchases, repaying the full balance will make use of the interest free period - so you'll never be charged any interest for using your card.
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Compare credit cards for a bad credit rating
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