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Bad Credit Rating Credit Cards | March 10
Our Best Buy Guides: fact-packed and updated monthly
Part 2: How to Compare Bad Credit Rating Credit Cards
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.
Both the Capital One Classic 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 offers 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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 Bad credit rating credit cards
This best buy guide is updated monthly, which means if any facts, rates or fees change during the course of a month this guide will not reflect those changes until the next scheduled update.
While we will make every effort to ensure and maintain current and accurate information in this guide, readers are always advised to check rates and fees with the credit card provider before signing up.
Date of last check: 9th March 2010 |
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