Credit Card Questions & Answers

Which banks offer credit cards for people with a bad credit rating?
There are a number of credit card issuers who offer cards designed especially for people with a bad credit rating or poor credit history.

Of these providers are Capital One, Barclaycard, Vanquis and aqua.

Bad credit rating credit cards can help to rebuild and strengthen a poor credit history. Used properly, these cards can show other lenders that you can manage a credit facility and will improve your credit score.

The interest rates on credit cards for people with a bad credit rating are high, and while these cards should be used regularly, it’s also important to make sure the balance remains repaid in full.

How might the credit crunch affect me?
The credit crunch has led to many banks reducing their risk by tightening up on lending criteria, such as whom they will lend to as well as how much they will lend.

"Sub-prime" applicants, such as people on low incomes or with poor credit histories are likely to be most affected, with many banks removing sub-prime mortgages from their product offerings.

Credit card products have also been affected, with some providers reducing credit limits as well as increasing rates and fees. Bad credit rating credit cards are still available to people with a poor credit history, but it’s advised to used these cards wisely and focus on keeping abreast of repayments and improving your credit score.

I've been rejected for a credit card – what should I do?
With the arrival of the credit crunch over recent months lenders are tightening up on their approval criteria, which means some credit cards are becoming harder to get accepted for.

If you do have a credit card application turned down, the first thing to do is to try and find out the reasons why it was rejected. When you know why, you’ll be able to take the right next steps – either waiting a few months to apply for a more suitable credit card or working on improving your credit score.

What is my credit score? How can I obtain my credit report?
Your credit file and credit score are extremely important to your financial future, as they will hugely impact your ability to get affordable finance.

Obtaining access to your credit report can be done online through credit reference agencies like Experian or Equifax, who are the main credit reference agencies used by lenders in the U.K. to check your credit rating when you apply for credit.

Can I get a credit card if I'm bankrupt or still repaying past credit?
If you are bankrupt then you will not be able to get a regular credit card, as these are subject to credit checks. However, you will find that pre-paid credit cards are becoming more and more popular, and these can be used in the same way as regular cards except you will not get yourself into debt, will not be charged interest, and will not have to subject to credit checks.

If you have a tarnished credit history as a result of past debts or existing debts that you are still repaying then there are some companies that specialise in credit cards for those with poor credit, such as Capital One and Vanquis Bank.

What should I do if I'm already in debt?
If you are already in debt your main priority should first be to repay your debt – or at least get your repayments under control. Keep in mind the four steps of debt control: 1. Make a list of your debts, 2. Work out your budget, 3. Deal with your priority debts, 4. Deal with your non-priority debts.

How can I improve my credit rating?
Rebuilding a bad credit rating is possible, and whilst it may take patient and diligence, it's not as impossible a task as it may seem. To improve your credit rating you can.