What are credit cards for bad credit?
Credit cards for bad credit are designed for those who aren’t eligible for mainstream credit cards because they have a poor credit score or no credit history.
- Find out how to check your credit score for free.
These ‘credit-builder cards’ have lower limits, higher interest rates and fewer benefits than a traditional credit card, but they will allow you to build – or rebuild - your credit rating if used sensibly.
How to fix bad credit with a credit-builder card
If you've never borrowed money before or made borrowing mistakes which have impacted your credit score, you'll find it difficult to get access to credit cards and loans – especially those with the cheapest rates.
Showing that you can repay on time and stay within the credit limit you've been given will help show lenders you are a responsible borrower and give your credit score a boost.
In time using a bad credit credit card will boost your chances of being accepted for better credit cards as well as loans and mortgages with better rates in the future.
Best credit cards for bad credit
Here are our picks of the cheapest credit-builder credit cards available on the market right now. You can compare more credit cards for bad credit using Which? Money Compare.
Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a credit card provider before committing to any financial products.
|Credit card||Min/max starting credit limit||Representative APR|
|Vanquis Chrome 24.7% Credit Card||£250-£1,000||24.7%|
|Barclaycard Platinum 18-Month Balance Transfer Credit Card||Not stated|| |
|Tandem Journey Credit Card||£150-£1,200||24.9%|
Recommended providerTesco Bank Foundation Clubcard Credit Card
Who are the best credit-builder card providers?
You’ll never know what you’re going to get with provider until you’ve signed up.
Luckily, Which? has reviewed 29 of the biggest credit providers to help you find out what they are like for customer service, cost, rewards and managing your account.
Credit card for bad credit – the golden rules
#1 Avoid borrowing
Because credit builder cards are aimed at higher risk customers, APRs tend to be very high, so you should never use them to borrow.
#2 Stick to your limit
Credit-builder cards tend to have a low credit limit, and you should avoid exceeding this.
Keep on top of your spending by regularly checking your account online and don’t spend more than you can comfortably afford to repay each month.
Failure to stay within your credit limit will result in additional charges applying to your account and could make obtaining credit more expensive or difficult in future.
#2 Pay in full – or at least the minimum – on time
Pay your balance off in full and on time every month to avoid interest, and to build up a record of successfully managing credit.
If you don’t pay on time, you will lose any promotional offer, be hit with a fee and your provider will report your missed payment to the credit reference agencies, reversing any good work you might have done.
Set up a direct debit to ensure that your minimum payments are met in advance of the credit card payment date.
#3 Never withdraw cash on them
Don't use your credit-builder card for withdrawals from cash machines as it will hit your pocket and your credit rating.
Cash withdrawals on a credit card are expensive - you'll pay a fee plus interest from the moment you take the cash out until it's paid off, often at a higher rate than on spending.
The move is also noted on your credit record and is a clear warning sign to lenders that you may not be great with managing your money.
#4 Check your progress
After a few months of using your credit-builder card, it’s worth checking your credit report to see if your score has improved and where you stand in the eyes of lenders.
Find out how to check your credit score for free in our guide.
You should eventually find that you'll be able to access better credit card deals.