Poor Credit History Credit Cards

How to choose a poor credit history credit card...

If you are trapped in the vicious circle - wanting to rebuild your credit rating, but unable to, as you can't get accepted for a credit card - then you are not alone.

Fortunately, poor credit rating credit cards are designed to rebuild your credit history and are far easier to get accepted for, so you can begin planning your new financial future.

These cards are good for:

A poor credit history
If you have a bad credit history and poor credit score (you can find out for free at CreditExpert.co.uk from Experian) then these cards are designed with you in mind.

If used property - i.e. not exceeding the credit limit, and always repaying the balance at the end of a month - then these cards can be a great tool to prove to lenders that you are a responsible and low risk client.

Improving your credit score
Lenders who offer poor credit history credit cards will add points to your credit score for careful use and regular and prompt repayment. If used wisely, over time, these cards can top up your credit score to a very respectable level.

These cards are unsuitable for:

Those still in financial difficulty
If you have mounting debts and are still struggling to meet repayments on current cards and outstanding bills, it would be ill advised to take on more credit - in any shape or form. These cards are designed for those who have now steadied their finances and want to rebuild their credit score.

If you are still in a position of financial difficulty it would be dangerous to take on one of these cards, as the high rate of APR - often twice the rate of a regular credit card - is likely to put you in a worse position than when you started! Instead, follow these steps first, which should put you on the right track to a better financial future.

1. Have your salary paid by BACS into your bank account (this proves to lenders that you have a regular source of income)
2. Get a current account and keep it in credit.
3. Pay back all bills - utility, loan, credit card etc - promptly.
4. Open a savings account - look for the best rate of interest available - and pay in as much money as you can afford to each month.
5. Consolidate your debts. If you have expensive debts in lots of places, then it may be worthwhile looking into getting a personal loan, to consolidate the debt at a reduced rate of interest (see our personal loan section to check if this option could benefit you).

Look for:

Online banking
The majority of credit card companies now offer online banking. It's a quick and easy way to keep an eye on your account - without having to wait on hold listening to bad music and running up a massive phone bill!

The interest free period
This is the amount of time you have to pay your bill after the statement arrives; the longer the better, for obvious reasons.

Watch out for:

Cash transactions
If you are strapped for cash and have a brand new credit card, it can be very tempting to exploit the spending potential, but this could be a more costly idea than you had first bargained on.

Companies will charge a handling fee for cash transactions, which are also exempt from the aforementioned interest free period - so you will end up with high rates of interest on top of the cash you've already taken out.

Don't forget:

Use, repay and rebuild
To get the most out of your new card you can't just leave it in a drawer and forget about it - it needs attention.

You need to use your card regularly, but ensure that you are repaying the full balance, every month. This is the best way to achieve credit rating results, as it shows you can use the credit available sensibly and repay what you owe on time.

Compare poor credit history credit cards