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What is a bad credit credit card?
As the name suggests, bad credit credit cards are essentially credit cards for people with bad credit. In the UK, there’s no such thing as a universal credit rating that is used by every lender, so there’s no reason that just because you’ve been rejected by one you’ll be rejected by them all. However, most lenders have similar criteria they use to measure borrowers by. You can find out more about what this might include here.
One of the things most lenders will consider when deciding whether or not to lend to you is your credit rating.
If you have a long history of responsible borrowing, meaning that you always make your repayments on time or in full, there’s every chance you’ll be accepted for the deal you want.
However, if you have missed payments in the past, been late or struggled with your repayments, gone over your agreed credit limit or had to make use of a debt solution, your credit rating might stand against you. Similarly, if you have no credit history because you’ve never borrowed, the lender you’re applying to may not have the proof they need that you’ll be able to borrow responsibly.
This is where the bad credit credit card may help UK borrowers.
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What is a bad credit credit card for?
Credit cards for bad credit are designed to provide access to borrowing for people with a less-than-positive or non-existent credit history. If used responsibly credit cards can help you build your credit score at the same time. This may make borrowing easier in the future.
Whether your credit rating has been damaged by your previous borrowing or you’ve simply never used credit, if you want to borrow in the future and have the best chance of getting the most competitive deals on the market, you need to make your credit rating as strong as possible. This is difficult if your current credit rating means that lenders are wary of lending to you.
A bad credit credit card is designed to plug this gap.
The providers of UK credit cards for poor credit understand that the people applying for them do not have the best credit ratings, which means that this isn’t weighted as heavily in their list of acceptance criteria.
If you’re already overloaded with debt and struggling to make your repayments, you shouldn’t try to get a bad credit credit card in order to borrow more money. If you’re struggling financially already, borrowing more won’t help. It may be an option to seek professional debt help.
What our customers say
Feefo reviews are gathered anonymously from genuine customers who have taken advantage of the credit card we provide. Take a look at some of the comments from people Ocean has helped.
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Very quick decision and paperwork and card was exceptionally fast process with no hassle.
The service was very informative and frieny
Easy to apply and very good communication. A very easy and pleasant experience. Like the way I'm kept up to date with offers and advice.
good to deal with
So far so good very easy and great service
Very quick to answer call. Excellent service form the person I spoke with. Issue was dealt with.
How are they different from other credit cards?
There are so many credit cards on the market available online that many lenders are keen to take steps to ensure theirs stands out. They might do this by advertising a low interest rate, a high spending limit, or a package of rewards you can enjoy when you spend on the card. However, the best deals are usually reserved for the people that lenders perceive will be the best borrowers, like those with healthy credit ratings.
Bad credit credit cards typically come with fewer frills, though there are credit cards to build credit which could help you reach a better financial position. Credit cards for low credit ratings may have a lower spending limit and a higher interest rate than many of the most competitive cards available, and it’s unlikely there will be any rewards attached. However, the benefit of credit cards for bad credit, as with other credit cards, is that it’s a means for you to rebuild your credit rating and re-establish yourself as a responsible borrower. But remember not meeting your repayments on time or exceeding your credit limit can harm it further.
It’s important you fully weigh up the pros and cons of applying for a credit card before taking the next steps.
How should a bad credit credit card be used?
Credit cards for poor credit can be used like any other credit card! As your primary aim in using the card is to build a strong and healthy credit rating, it’s important you manage your borrowing responsibly.
You can do this by always paying back more than the minimum repayment on time every month and also keeping within your agreed credit limit. This means you should avoid any charges for missed or late payments with any of the UK credit cards offered to people with bad credit, which can show up on your credit report. To make sure you never forget, you could set up a standing order for a set amount or Direct Debit which can automatically take the minimum repayment or any amount above this that you can afford.
To make your card as economical as possible, it’s best to clear the balance in full every month if you can, so that you avoid paying any interest. This may mean you have to budget and only spend what you know you can afford on your credit cards for low credit ratings. But by paying back more than the minimum, you’ll pay less interest and clear the debt quicker than you would if you only paid your minimum payment every month.
If you have any problems repaying your bad credit credit card, contact your lender as soon as possible. If you’re struggling temporarily because, for example, you’ve changed jobs, talking to your lender is the first thing you should do.
What you shouldn’t do is ignore the situation and simply start missing repayments. This could mean that the credit card you took out to help you build up your credit rating only makes it worse, and may result in borrowing being even more difficult in the future.
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