The Best Credit Cards for Bad Credit UK in 2021
Every adult in the UK has a credit score. This is what landlords, employers, lenders and other institutions look at before taking you as a client or customer. In March 2021, the average credit card debt per household in the UK was £1,945. During the same period, the change in outstanding credit card balances was -21.7%.
To get the best deals on mortgages, loans, credit cards and more, you need a good credit score. People with the best credit scores do not use more than 30% of their money. Sadly, over 37% of people in the UK do not stick to this rule. Sticking to the 30% rule shows lenders that you can manage your credit sensibly.
The good news is you can get a credit card with poor credit.
What Is a Credit Card for Poor Credit?
A credit card for poor credit is an option for people with bad or no credit history. When you apply for a credit card, bad credit affects whether the lender will offer you credit. It also affects how much the lender will offer and at what interest.
Your credit score is usually based on your record of making debt payments and paying bills. If you’ve a bad credit score, it means you have a history of late payments or missing payment, mortgage arrears and bankruptcy. However, your credit score is not solely based on your credit report. It’s also based on how much you earn and your employment status.
If you have a poor credit score, you need bad credit cards.
Credit Cards for Bad Credit
The following are credit cards for poor credit.
Aqua Classic Credit Card
Want to improve your credit rating or build your credit? Failure to stay within your credit limit or make payments on time will lower your credit score. Thankfully, the Aqua Classic Credit Card can improve your credit score. It comes with a host of tools to help you use your credit card responsibly.
The tools include:
- Notifications to keep you on track
- Mobile app to keep you in control
- A free credit builder tools in the app
They also offer excellent customer support from their UK based call centre. Unlike other credit cards, there are no annual fees. To apply for the Aqua Classic Credit Card, you must meet the following requirements:
- Be 18 and over
- Have a permanent UK address
- Have a current account with a UK bank or building society
- Must not have registered for bankruptcy in the past 18 months
- Must not have received a County Court Judgment in the past year
You should also not have an Aqua card or taken out other cards such as Marbles, Opus or Fluid in the past 12 months. The initial credit limit is between £250 and £1,200. The representative APR is very high – 37.9% APR. If you make a late payment, Aqua will charge you up to £12.
Before getting the Aqua Classic Credit Card, check eligibility.
Marbles Classic Credit Card
The Marbles Classic Credit Card is also aimed at customers with bad credit. As a credit builder, the Marbles Classic Credit Card has a manageable credit limit from £250 and up to £1,200. Marbles review credit limits after every 3 months. If you keep with your payments, you could get an increase on your fourth statement.
Like the Aqua Classic Credit Card, the Marbles Classic Credit Card also comes with tools to help you manage your credit. With Marbles online account management, you can view transactions and track your balance even on the go. Marbles will also send eStatements, helping you stay in control.
When approaching your credit limit, you will receive notifications or text alerts. This ensures that you don’t miss payments. In addition, if you are unable to make payments for a particular month(s), Marbles allows you to change the payment date up to twice a year.
The Marbles Classic Credit Card is only available to people aged 18 and over. You must be a resident in the UK. The representative APR for the Marbles Classic Credit Card is on the high end – 34.9% APR. But it applies to your account depending on Marbles assessment of your application.
Check eligibility for Marbles Classic Credit Card.
Capital One Classic Card
The Capital One Classic Card is one of the most popular credit cards for bad credit. Over 4 million are currently using the Classic credit card to improve or build their credit. To receive your Capital One Classic Card, you must be:
- Over 18
- On the electoral roll
- Have some history of managing your credit
Capital One may decline your application if you:
- Declared bankruptcy in the past 12 months
- Have not had credit in the UK
If your application is successful, Capital One will require you to pay each month. They will tell you the minimum amount to pay each month. All you need to do is check your statement. You can repay more than the minimum amount up to the full balance. But make sure that you pay at least the minimum amount.
The credit limit is between £200 to £1,500. Subject to eligibility, Capital One will increase your credit limit up to two times per year. To stay on top of your payments and spending, we recommend setting up email alerts. The representative APR is quite high – 34.9% APR variable.
Check your Capital One Classic Card eligibility!
Barclaycard Forward Credit Card
The Barclaycard Forward Credit Card is a smart choice for those who want to improve their credit rating. It comes with a personalised credit limit between £50 – £1,200. Unfortunately, the £50 credit limit is low and not practical. If this is a concern, we recommend checking out other credit builder cards listed above.
If you make all your payments on time for the first year, you receive a price promise – 3% interest rate reduction. If you keep this up through the second year, Barclays will give you another 2% reduction. In case you do not qualify in the first year but qualify in the second year, you’ll get a reduction of 3%. The rate reduction usually starts from the date when you receive your first payment.
When you make minimum payments, you’ll get a rate reduction. To know how long it will take you to pay off your credit balance, use the Barclay Repayment Calculator. Besides a rate reduction, Barclays offers 0% interest on purchases for 3 months. The representative APR for this card is 33.9% APR. This is lower than that of the Aqua Classic Credit Card and Marbles Classic Credit Card.
Barclay Forward will send alerts to let you know your weekly balances, balance limit and when your balance is due. To apply, you must be:
- 18 or over
- Have not declared bankruptcy in the past 6 years
- Don’t have a County Court Judgement
- Have a permanent UK address for at least 2 years
- Employed with an income of £3,000 per annum or more.
Before you apply, check eligibility.
Capital One Balance Credit Card
If you’re over 18 years and living in the UK, you can apply for the Capital One Balance Credit Card. The card has a credit limit of between £200 to £1,500. Per month, you can pay off the balance. Capital One will inform you of the minimum amount to pay each month. Just check your first statement.
The standard interest rate on purchases is 34.94% per annum. So if you borrow £1,000 to £1,500, the representative APR will be 34.9% APR. A higher credit limit allows you to meet your day to day expenses, one-off buys and emergencies. But this also means running up a bigger balance.
To apply for the Capital One Balance Credit Card, you must be 18 and over. In addition, you should be a UK resident and must not have declared bankruptcy in the past 12 months. If the COVID-19 had an impact on your income, you need to check your details. You should include any income changes due to being:
- Out of work
- Working reduced hours
You should also include your accommodation costs, especially if you took a payment holiday. The application takes less than 5 minutes, and you’ll receive a response in 60 seconds.
Apply for your Capital One Balance Credit Card.
Capital One Classic Complete Card
Get your Capital One Classic Complete Card and start building your credit. The card has a credit limit of £200 to £1,500 with up to two optional credit limit increases every year. But this is subject to eligibility.
With a maximum credit limit of £1,500, the card can help you in emergency situations and day to day expenses. However, Capital One will only accept your application if you:
- Are over 18
- Are on the electoral roll
- Have some history managing your credit
But if you’ve declared bankruptcy in the past 12 months and don’t have credit in the UK, they will not accept your application. So before applying for a credit card, check eligibility. It takes less than 60 seconds to receive a response, and the credit check will not affect your credit rating.
Capital One Platinum Card
The Capital One Platinum Card has an annual fee of £0. As a solid option for those with bad credit, you will not pay foreign transaction fees on overseas purchases. Also, you will not earn rewards or cashback. But, if you make your payment on time, Capital One will increase your credit limit in as little as six months.
The credit limit is between £200 to £1,500 with interest rate on purchases – 29.84% per annum. This card has the lowest representative APR of 29.8% APR compared to other credit cards for bad credit. Besides a lower representative APR, the card has the following benefits:
- Unlimited access to the CreditWise app
- Fraud coverage
- No penalty APR for late payments
- Platinum Mastercard benefits
To apply, you must be 18 and over. Before that, check for eligibility.
Can you Get a Business Credit Card for Bad Credit?
Yes, you can get a business credit card for bad credit. Useful for day to day expenses and emergencies, they work similarly to personal credit cards. But the account is in your company name instead of your name. If you’re the company’s owner, you’re responsible for paying back the money borrowed on your credit card.
You can borrow more on your business credit card compared to a personal credit card. This is because it’s based on your business income, not personal income. But like a personal credit card, there is a minimum amount your business needs to earn to qualify for the card.
Not all lenders accept all companies. Others accept certain types of companies.
Are Credit Cards for Bad Credit the Same As Other Credit Cards?
They are similar, but credit cards for bad credit have high-interest rates. The representative APR for most credit cards for bad credit range from 25% to 40%. Some of the cards come with offers such as cashback, rewards, 0% interest on purchases and balance transfers. But to enjoy these benefits, you need to keep up with payments.
What are the pros and cons of bad credit credit cards?
Credit cards for bad credit have several pros and cons. The pros are:
- Will help you in day to day expenses and emergencies
- Provides an excellent way to build your credit rating
- Offers fraud protection
- No annual payments
- You can spread the payments.
The cons are:
- Higher interest rates than normal credit cards
- Lenders will offer a lower credit limit
- Risk of running into more debt is high
How to Improve Your Credit Score
The following are ways to improve your credit score:
- Don’t miss repayments on your debt – pay on time
- Avoid payday loans
- Never use more than half of your credit limit
- Use bad credit cards to build credit
- Closed unused credit account
- Avoid making several credit applications
- Avoid unauthorised overdrafts
- Check for credit record mistakes
To avoid debt, make a budget, track your expenses, and have an emergency fund.
If a lender rejects your credit card for bad credit application, do not reapply straight away. This will dent your credit record. What you need to do is check your record and take steps to improve it. If you need to borrow, get a loan with bad credit.
If your application is successful, pay more than the minimum amount every month. Paying the minimum will take you more time to clear the balance. If you make a late payment or go over your credit limit, the lender will require you to pay a charge. Keep checking your email or notifications to keep up with your payments before the due date.