Bad Credit Rating Credit Cards | September 10

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Bad Credit Rating Credit Cards Guide

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Part 3: How to Use a Bad Credit Rating Credit Card

BAD credit rating credit cards should be seen, as used, as tools to help improve your credit score and allow you to get back on your way to access to more competitive financial products in the future.

Using your bad credit rating credit card wisely is of the utmost importance when trying to rebuild a poor credit score, and will also keep you away from getting back into debt again.

Making the most of your card...

Budget your income and always pay back your spending
The best way to use a bad credit rating credit card is to spend regularly and always repay your balance at the end of each statement month.

When spending money on credit, it's important to budget your income so that you always have enough left at the end of each month to pay back any spending on your bad credit rating credit card.

Improve your credit score
Bad credit rating credit cards should be used as tools to improve your credit score. By using them wisely - always repaying your spending and never exceeding your credit limit - you will soon start to benefit from an improved credit rating.

There are other ways to improve your credit score, which should be done simultaneously to using a bad credit rating credit card.
- Have you salary paid into your current account
  This will show lenders that you have a regular salary.
- Use a debit card for your current account
  Although a debit card has nothing to do with borrowing money - as the transactions come straight out of your current account - using one regularly and never going overdrawn will help to improve your credit score.
- Always pay your bills on time
  Paying your utility bills and council tax promptly will have a positive knock-on effect to your credit rating, and some utility companies may even give you a prompt payment discount!
- Work on a long-term strategy
  Try and save a small percentage of your salary every month. Put it into a separate savings account so you'll be less inclined to spend it.
- Take out a credit card
  Take out a bad credit rating credit card and use it wisely. If your application is declined, it is best to wait 3 months before applying for another card, as frequent credit applications can further damage your credit score.

Things to watch out for...

High interest rates
Bad credit rating credit cards should be used like a charge card - always repay your spending in full each month.

The interest rates charged on bad credit rating credit cards are notoriously high, and any balance left to rollover from one statement to the next will incur a hefty interest cost.

Not only will you face these much higher interest costs, but you should also try and avoid leaving your credit card debt unpaid so your finances don't become unmanageable again.

Bad credit rating credit cards

This best buy guide does not cover all of the credit cards available in the market.

This 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: 2nd September 2010