What Credit Card should I get if I have Bad Credit?
Posted January 20th, 2009 Having a bad credit rating drastically reduces your credit options; however there are a few options available to you. The major caveat is that these options can do more harm than good.
Before the credit crunch, most companies weren’t terribly fussy about who they gave credit to, giving out large amounts of credit to anyone who wanted them. However now that we’ve got a credit crunch, the financial institutions are a lot for picky.
Compare and contrast bad credit cards
In spite of that, there are still a few options available to you if your credit ratings poor, that, in addition to proving you with the option to improve your credit rating.
Bad Credit Cards
In spite of the slightly alarming name, they’re not actually ‘bad’ (although they’re not great), instead this phrase refers to credit cards for people with bad credit. Often the credit limit is a lot lower than a normal credit card. As these cards are designed for people with high credit risk, they also come with larger fees, larger minimum payments, higher rates and fewer benefits. Still, if you really need the card, this is one option.
Prepaid credit cards
Prepaid credit cards rely exclusively on money you’ve paid on the card, they’re not actually credit cards, although they do use the same payment facilities as normal credit cards. This is a great way to manage your expenditure (it’s impossible for you to get into debt), while giving you the opportunity to rebuild your credit rating.
Additional cardholder
If you’ve got a loved one with a good credit rating who’s willing to help you get back on your feet, consider asking them if you can be an additional cardholder on a credit card. Be warned though, if you mess up, the debt will be against their name as well as yours.
Store Cards
Store cards generally have less stringent requirements than normal credit cards. This is offset by the generally high APR, as well as restrictions on use. This is a pretty bad option, but it is an option.
What to watch out for with Credit Cards for Bad Credit
The standard rule of “If it looks too good to be true then it probably is” applies here.
Here are some things to watch out for
Upfront Fees
If they ask you to pay a fee before you get the card, you’re being scammed. Don’t even consider the card if this is the case.
High Fees
If the annual charge is disproportionately high against the amount of credit that’s supplied, you should consider your options.
Short Interest Free Periods
The interest free period is the time between when you make a purchase and when they start charging interest. If the interest free period is less than 25 days, you should seriously consider shopping around a little more.
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Comparison of Top 10 Credit Card Offers
| Credit Card | Card Details | Interest Rate | Cash Advance Rate | Balance Transfer Rate | Annual fee | Interest free days | ||
|---|---|---|---|---|---|---|---|---|
 Halifax All in One Credit Card |
The Halifax All in One credit card offers a great introductory rate, and is perfect for saving you money now as well as in the future. | 15.9% APR | 27.95% p.a. (variable) | 0% for 9 months | No Annual Fee | 59 Days interest free |
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 Virgin Credit Card |
As well as a great rate, the Virgin Credit Card comes with:
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16.6% APR (variable) | 27.9% p.a. (variable) | 0% for 16 Months (2.98% fee on balance transfers) | No Annual Fee | 50 days on card purchases |
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 Capital One Classic Visa |
This card is designed for people with bad credit ratings, this is why the rate is quite high. |
Typical 34.9% APR variable | 34.9% APR | 34.9% APR | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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As well as earning Flying Club miles which you can spend on brilliant rewards like flights, upgrades, car hire and more, a Virgin Atlantic Credit Card gives you up to 46 days interest free on card purchases. |
17.9% APR typical rate | 20.9% p.a. (variable) | 0% for 6 months (2% handling fee) | No Annual Fee | Up to 46 days on card purchases only. |
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The Virgin Prepaid MasterCard from Virgin Money is a prepaid Mastercard that you can add funds to, and use these funds for normal purchases. |
N/A | N/A | N/A | N/A | N/A |
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5% cashback on purchases in your first three months (up to £4,000 of spend). Thereafter, earn 0.5% on the first £3,500, 1% on £3,501 to £10,000, and 1.5% after £10,001. |
18.9% p.a. | 27.9% p.a. | 18.9% p.a | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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Vanquis Visa Card is designed for people with no credit history or who have previously had bad debt. |
39.9% APR variable | 39.9% | 39.9% | No Annual Fee | Up to 56 days on card purchases only |
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The award winning prepaid card with no credit check or bank account needed. | Funds in your Account will not earn interest | Prepaid only - N/A | Prepaid only - N/A | £59.40 p.a. (£4.95/month) | Prepaid only - N/A |
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