Can I get a credit card with bad credit?

If you’re struggling with bad credit, the path to rebuilding your financial health might seem daunting. However, there are options to help repair your credit report one step at a time, including credit cards for bad credit.

Although these cards typically come with lower limits and higher interest rates, they can be a practical method to help gradually improve your credit score. When used responsibly, they’ll help to show future lenders that you’re good at managing credit.

In this guide, we’ll explore how to get a credit card with bad credit, exploring the potential advantages and considerations. We’ll look at the different options available, and provide tips on using credit cards responsibly to help you build a stronger financial future.

In this guide: 

• What are credit cards for bad credit?
• Pros and cons of credit cards for bad credit 
• What credit cards can I get with bad credit?
• How to get a credit card with bad credit
• Where can I get a credit card with bad credit?
• What to consider before applying for a credit card for bad credit 
• Tips for using your credit card responsibly
• Alternatives to credit cards

What are credit cards for bad credit?

Also known as credit builder cards, credit cards for bad credit are specifically designed for people who have a poor credit history or no credit history at all. These cards are more accessible than traditional credit cards, making them a viable option for those looking to rebuild their credit.

Learn more about what causes bad credit in our bad credit score guide. We’ll explore how credit reference agencies assess your credit history, and how to fix it.

Pros and cons of credit cards for bad credit

Let’s break down some of the potential advantages and considerations for credit cards for bad credit:

Potential advantages:

When used responsibly, there are various potential benefits to getting a credit card for bad credit:

• Improve your credit score: When you make repayments on time, credit builder cards can help improve your credit score.
• Protected purchases: Like other credit cards in the UK, purchases made on the credit card will be protected as a consumer.
• Build your credit worthiness: There are many ways to improve your credit score, including being on the electoral roll. However, credit cards for bad credit can show future lenders that you can borrow and repay credit responsibly.

Potential considerations

However, credit cards for bad credit can come with limitations that you should be aware of before applying:

• Lower credit limits: Credit cards for bad credit usually have lower credit limits compared to standard cards. This means you won’t be able to borrow as much, which can be a good thing if you’re trying to manage your spending and avoid getting into further debt.
• Higher interest rates: These cards often have higher interest rates, reflecting the increased risk that lenders take on when offering credit to individuals with poor credit scores. This means that carrying a balance on your card can become expensive, so it’s important to pay off your balance in full each month if possible.
• Limited rewards: Unlike premium credit cards that offer perks such as cashback, credit cards for people with bad credit typically offer fewer rewards, if any. The main reward with these cards is the opportunity to rebuild your credit score by demonstrating responsible use.

What credit cards can I get with bad credit?

Getting a credit card with bad credit can be challenging, and there may not be as many options available to you, but it’s certainly possible. Credit cards for bad credit are made to help people set up healthy credit habits. So, if your credit report needs some improvement, you’re more likely to be approved for a credit builder card than a card with extra rewards.

What credit score do I need for a credit card?

Credit reference agencies use different rating systems to produce your credit score. This means that there’s no one-size-fits-all result that can guarantee that your application is accepted. Good credit scores start from 670 with Equifax, 881 with Experian and 661 with TransUnion.

However, your eligibility can also depend on the type of credit card, and your financial situation. You can often get an initial soft credit check first before you apply to see if you might be eligible.

How to get a credit card with bad credit

Getting a credit card with bad credit requires careful consideration and research. Here’s a step-by-step guide on how to get a credit card with bad credit:

1. Check your credit score

Before applying for any credit card, it’s essential to know where you stand. You can check your credit score for free through various online services, such as Experian and ClearScore. Knowing your score will give you an idea of which credit cards you might be eligible for and help you to identify areas that need improvement.

2. Research credit card options

Once you have a clear understanding of your credit score, it’s time to research credit cards designed for people with bad credit. Many banks and financial institutions offer these credit builder cards, so take the time to compare different options with initial quotes.

Consider factors such as:

• Interest rates
• Fees
• Credit limits
• Rewards

Remember, the goal is to find a credit card that will help you rebuild your credit, so prioritise low interest rates and manageable fees over perks and rewards.

3. Consider secured credit cards

If you’re struggling to get approved for a traditional credit card for bad credit, a secured credit card might be a good alternative. Secured credit cards require a security deposit that typically serves as your credit limit. For example, if you deposit £200, your credit limit will be £200. Because the deposit reduces the risk for the lender, secured credit cards are easier to obtain, even if you have bad credit.

Secured credit cards function like regular credit cards, where your payment history is reported to the credit bureaus. By making repayments on time and keeping your balance low, you can start tp improve your credit score over time.

Where can I get a credit card with bad credit?

Finding the right credit card for bad credit involves researching different lenders and financial institutions. Here are some places to start your search:

Banks and credit unions

Many banks and credit unions offer credit cards specifically designed for people with bad credit, or those with little experience with credit. Start by checking with your current bank, as they may be more willing to approve your application if you already have an account with them.

Online lenders

Various online lenders specialise in providing credit cards for people with bad credit. These lenders often have more flexible approval criteria, making it easier to get a credit card. However, be sure to research the lender’s reputation and read the terms and conditions carefully before applying.

Retail stores

If you frequently shop at a particular store, consider applying for their retail credit card. These cards are often easier to obtain, even with bad credit, but keep in mind that they can only be used at that specific store.

What to consider before applying for a credit card for bad credit

Choosing the best credit card for bad credit depends on your individual needs, financial situation and goals. Here are some factors to consider when making your decision:

1. Interest rates

Interest rates are one of the most important factors to consider when choosing a credit card. Even if you plan to pay off your balance in full each month, it’s wise to select a card with a low interest rate to minimise potential costs.

2. Fees

Be aware of any fees associated with the credit card, including annual fees, late payment fees and foreign transaction fees. Some credit cards for people with bad credit may have higher fees, so it’s essential to factor these into your decision.

3. Credit limits

Whilst most credit cards for bad credit come with lower credit limits, it’s still important to choose a card that offers a limit that meets your needs. Keep in mind that maintaining a low credit utilisation ratio (the amount of credit you’re using compared to your credit limit) is crucial for improving your credit score.

4. Rewards

Though rewards shouldn’t be your primary focus when choosing a credit card for bad credit, some cards do offer cashback or other perks. If you’re able to find a card with rewards that also has favourable interest rates and fees, it could be a good option.

Tips for using your credit card responsibly

Once you’ve got a credit builder card, it’s important to use it wisely to help rebuild your credit score. We’ve rounded up some tips to help you achieve this:

1. Make repayments on time

Whether it’s household utilities or credit repayments, your payment history is the most significant factor in determining your credit score. Always make your credit card repayments on time, as even one late repayment can negatively impact your score. Consider setting up automatic payments or reminders to ensure that you never miss a due date.

Find out more about how missed payments can impact your credit report in our complete guide.

2. Keep your credit utilisation low

Credit utilisation refers to the percentage of your available credit that you’re using. It’s recommended to keep your credit utilisation below 30%. For example, if your credit limit is £1,000, try to keep your balance below £300. This shows lenders that you’re managing your credit responsibly, and you’re not dependent on borrowing.

3. Avoid applying for multiple credit cards

Each time you apply for a credit card, you’ll receive a hard inquiry on your credit report, which can temporarily lower your credit score. To avoid this, limit the number of credit card applications you submit in a short period of time. The key is to focus on using the card you have responsibly before considering additional credit.

4. Pay more than the minimum

Whilst it’s important to make at least the minimum payment each month, paying more can help you pay off your balance faster and reduce the amount of interest you pay over time. If possible, aim to pay off your balance in full each month to avoid interest charges altogether.

Will a credit card for bad credit help me?

Credit cards can be helpful to spread the cost of purchases over a longer period of time, as well as gradually build your experience in repaying credit. However, you could get into expensive debt if you don’t pay off your card in full each month.

If you’re finding it challenging to pay for your current commitments, such as priority bills or other debt, it might not be the right time to borrow more with a credit card.

Focus on paying off any other outstanding debts first, and check your credit report to see what else you could do to help improve it. Our guide on how to improve your credit score explains what to do to help boost your report.

Alternatives to credit cards

If you’re not ready to apply for a credit card or want to explore alternative ways to rebuild your credit. From secured borrowing options to bad credit loans, consider the following options:

Debit cards

Whilst debit cards don’t help you to build credit since they’re linked directly to your bank account, they can be a useful tool for managing your finances. By using a debit card instead of cash, you can track your spending and avoid accumulating debt.

Secured credit cards

As mentioned earlier, secured credit cards are a great option for people with bad credit. They require a security deposit, which reduces the risk for the lender and makes them easier to obtain. By using a secured credit card responsibly, you can rebuild your credit over time.

Credit builder loans

Some financial institutions offer credit builder loans, which are designed specifically to help individuals improve their credit scores. With a credit builder loan, the money you borrow is held in a savings account whilst you make monthly payments. Once the loan is paid off, you receive the funds and your payment history is reported to the credit bureaus. For more information about loans, read our guide: Can applying for online loans damage my credit score?

Discover more helpful resources

Hopefully you should have a better idea of how to get a credit card with a bad credit score. Building your credit can take time, and this journey can look different for everyone. Remember to be patient with yourself as you work towards your financial goals, always making sure to make your repayments on time.

Continue building your financial confidence and working towards your goals with our wide range of financial insights. Explore everything from how to get a car with bad credit, to our guide on how overdrafts work.

And remember, if you’re ever worried about covering your expenses, free support is always available. Get in touch with StepChange, Citizens Advice, and MoneyHelper for independent financial advice, or explore our third-party organisations and charities page to learn more. 

Representative Example

Based on the last working day of each month

Interest rate 288.35% pa (fixed) Representative 1,267.9% APR

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Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.

*Our guide to financial promotions: https://www.moneyboat.co.uk/marketing-terminology-explained/