Credit Cards with Bad Credit
Credit cards are fast becoming an essential part of life, especially with online shopping becoming more and more widespread.
If your credit rating isn't brilliant, it can be difficult to get approved for many of the cards you see widely advertised.
However, that doesn't mean that you're definitely out of luck - there are cards availble for people of most credit ratings and situations, it's often just a matter of accepting you'll have to pay more in interest, and of seeking out cards not aimed at people with pristine ratings.
Risk Based Assessment
If your credit rating isn't great, but you haven't got any serious difficulties like defaults or CCJs, then there are a number of mainstream cards that may be worth applying for. These cards use a system called 'risk based assessment' which means that the rate offered will vary depending on your credit score. The better your score, the lower the rate. Look for cards which feature a range of APRs listed in their adverts, or which say something like 'rates will vary subject to status'.
These cards are not as common as they used to be, as changes in credit card advertising mean that this kind of card appears less competitive to people with better credit ratings, and so card issuers are more reluctant to provide them.
Specifically 'Bad Credit' Cards
Some card are aimed only at people with adverse credit scores. They have a high APR (interest charges) and will not offer features usually found on other cards such as introductory deals. The credit limits are also low to start off with, but these may be raised if you show you can keep up with repayments.
Capital One UK are a market leader in supplying credit cards to people with bad credit ratings - they claim their approval rates are amongst the highest in the industry. The APR is very high, and the standard starting credit limit low, but they charge no annual fee and the chances of success in your application are good. A successful application could be the all-important first step on the road to repairing your bad credit rating! Apply Online >>>
Another card from a brand-name issuer is Barclaycard Initial, which similarly offers an expensive APR rate but is especially for people with poor credit, such as people applying for their first card who have no credit history to back their application up.
The final option is a prepaid card. These aren't really credit cards at all, as you need to 'load' the card with money before you can use it to spend. The advantage of this is that there is little or no risk to the issuer, and so virtually anyone can get approved. The costs involved are much lower than a credit card too - you'll not be charged interest (or certainly shouldn't be!), although there will be an annual fee and maybe a percentage charge for money you transfer to your card.
Another name for a prepaid card is a secured card, and while they are on offer at many sites around the net, you may have to pay a fee for the privilege of applying for one. An alternative to consider may be the American Express Travellers Card which is a pre-funded payment card intended for travellers, but will work equally well in the UK.
While prepaid cards will not provide you with a credit facility, they at least allow you to spend online and by telephone.