Best Credit Cards for Bad Credit

Read on to find out more about credit scores and how to build your credit report.

Updated: May 21, 2024
Matt Crabtree

Written By

Matt Crabtree

|
Rebecca Goodman

Edited By

Rebecca Goodman

CompareBanks is reader-supported. When you click through some links on our site, we may earn an affiliate commission. Learn more

Your credit score can significantly impact your financial future. It ultimately decides if you can get a mortgage, a loan, a credit card, or any other credit products, and what interest rate you will pay.

If you have poor credit score or no credit history, it is possible to improve your score to make yourself a more promising candidate to potential lenders but it's something that doesn't happen overnight.

Big credit companies may reject you if your credit score isn't high enough but there are other options such as credit builder cards which can help. If used correctly, and you make the monthly repayments on time, these cards can help to boost your credit score over time.

In this article, you'll learn how credit scores work, how to boost your credit report, and how credit builder credit cards can help.

The best credit cards for bad credit ratings

To kick things off, here's a list we have compiled of what we think are the best cards if you don't have a good credit score.

Card NameScoreDetails
1. Vanquis Bank Chrome Credit Card★★★★★Learn more
2. Tesco Bank Foundation Credit Card★★★★★Learn more
3. Capital One Classic Credit Card★★★★★Learn more
4. Barclaycard Forward Card★★★★Learn more
5. Post Office Classic Credit Card★★★★Learn more

1. Vanquis Bank Chrome credit card

You should aim to clear your card balance in full each month but if you're not able to, the Vanquis card offers a decent interest rate for a credit builder card.

This card has no annual fees, and you get up to 56 days of 0% interest on purchases when you've paid the whole balance on two or more consecutive monthly statements.

Vanquis Bank Chrome Credit Card

Vanquis Bank Chrome Credit Card
Credit Limit
Minimum £500
Representative % APR (variable)
29.5% APR
  • Rates of 26.5% APR (variable) or 29.5% APR (variable) depending on individual circumstances.
  • Credit limit £500 to £1,500 (subject to status).
  • £10 minimum repayment.

Representative Example – If you spend £1,200 at a purchase interest rate of 29.5% p.a. (variable) your representative APR will be 29.5% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Advantages

✔️ The credit limit is reviewed every five months

✔️ Starting credit limit up to £1,500

✔️ Additional interest-free periods may be available occasionally with promotional offers

Disadvantages

❌️ Could be offered a higher APR than advertised

❌️ More competitive credit builder cards may be available

2. Tesco Bank Foundation credit card

With Tesco's card, you can earn Clubcard points from almost anywhere (including Tesco) whilst working on your credit score. You'll be able to keep track of your credit score with monthly updates.

Tesco Bank Foundation Credit Card

Tesco Bank Foundation Credit Card
Credit Limit
Minimum £250
Representative % APR (variable)
29.9% APR
  • Collect Clubcard points almost every time you shop.
  • Credit limit £250 to £1,500.
  • Access to Tesco Bank CreditView, provided by TransUnion, for 3 years from account opening.

Representative Example – If you spend £1,200 at a purchase interest rate of 29.9% p.a. (variable) your representative APR will be 29.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Advantages

✔️ Competitive representative APR for the credit-builder market

✔️ Earn Clubcard points on spending

✔️ Access to your credit report for three years

Disadvantages

❌️ You may not be accepted if you've had any county court judgements (CCJS)

❌️ Minimum payments start at £25

3. Capital One Classic credit card

This credit builder card is great if you already have a credit score you want to increase. However, your application will be rejected if you’ve declared bankruptcy within the last 12 months or have no credit record.

Capital One Classic Credit Card

Capital One Classic Credit Card
Credit Limit
Minimum £200
Representative % APR (variable)
34.9% APR
  • For people with bad credit or building credit.
  • Credit limit £200 to £1,500.
  • Minimum repayment £5.

Representative Example – If you spend £1,200 at a purchase interest rate of 34.94% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Advantages

✔️ It helps you stay in control of your spending with email alerts

✔️ The same APR is offered to all successful applicants

✔️ Credit limit increases are possible if you prove you've got good card management

Disadvantages

❌️ Unavailable to applications with no credit history

❌️ Unavailable to anyone with recent bankruptcies

4. Barclaycard Forward card

This card is a smart choice if you're looking to build a good credit score and it comes with a personal credit limit based on what you can afford. You can easily manage your account with handy alerts via text or email too.

Barclaycard Forward Card

Barclaycard Forward Card
Credit Limit
Minimum £50
Representative % APR (variable)
33.9% APR
  • 0% interest on purchases for 3 months (from the date you open your account).
  • Credit limit £50 to £1,200.
  • Minimum repayment £5.

Representative Example – If you spend £1,200 at a purchase interest rate of 33.9% p.a. (variable) your representative APR will be 33.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Advantages

✔️ You’ll receive a 3% interest rate reduction if you make all payments on time for the first year

✔️ Get a 0% interest rate on purchases for the first three months

✔️ Up to five months of free Apple subscription

Disadvantages

❌️ Credit limit as low as £50

❌️ Unavailable if you've had CCJs or bankruptcies in the last six years

5. Post Office Money Classic credit card

The Post Office card is globally accepted anywhere that accepts Mastercard® and it offers a low interest rate, which is ideal for people with a poor credit rating or no credit record. You can also make balance transfers with this card.

Post Office Money Classic Credit Card

Post Office Money Classic Credit Card
Credit Limit
Minimum £200
Representative % APR (variable)
34.9% APR
  • 0% on purchases for up to 12 months and 0% on balance transfers for up to 12 months (2.9% transfer fee). Subject to eligibility.
  • Credit limit £200 to £8,000.
  • Minimum repayment 3% or £5, whichever is greater.

Representative Example – If you spend £1,200 at a purchase interest rate of 34.94% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Advantages

✔️ You could be given a credit limit of up to £8,000

✔️ Benefit from APR rates as low as 19.9%

✔️ Competitive credit builder APR

Disadvantages

❌️ You will know later (before applying) precisely what your APR will be

❌️ A balance transfer of 2.9%

What is a credit rating?

Your credit score depends on your credit record which is a history of all your financial interactions including credit taken out and repaid.

A high credit score indicates you're a low risk to lend money to, and a poor credit score makes you a higher risk.

You may be wondering what or who decides your credit score and the truth is there are lots of different factors used by the credit reference agencies, Experian, Equifax, and TransUnion, to determine your credit score. They include the following:

  • Payment history: if you have missed repayments, declared bankruptcy or debt settlements.
  • Length of credit history: lenders want to see how long you've been using credit and if you have any long-term debts.
  • Credit utilisation: how much you've used of your total available credit and how much you owe on different accounts.
  • Types of credit: the mix of credit types you have taken out, such as mortgages, store cards, and credit cards.
  • New credit inquiries: any credit you've recently applied for is shown on your credit report.
  • Public information: details about your name and address, as shown in the electoral roll, will be looked at

Although all of these are looked at, the most important are credit utilisation and payment history, as these show a lender how you manage your money.

How your credit report is scored

Each credit reference agency has its own approach to calculating your credit score. However, a credit score is usually between 0 and 999. The main credit reference agencies here in the UK are Experian, TransUnion, and Equifax.

It's important to note that each credit reference agency has a different guideline on a poor, good or excellent credit score.

Experian rates credit scores as follows:

  • Excellent: 961 to 99
  • Good: 881 to 960
  • Fair: 721 to 889
  • Poor: 561 to 720
  • Very poor: 0 to 560

TransUnion rates credit scores as follows:

  • Excellent: 781 to 850
  • Fair: 661 to 720
  • Poor: 601 to 660
  • Very poor: 300 to 600

Equifax rates credit scores as follows:

  • Excellent: 800 to 850
  • Very good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 300 to 579

So, where in one credit agency your credit score is considered poor, it could be fair in another. It can also change regularly, and one way you can increase your credit score is with a credit builder credit card.

The different types of credit builder cards

A credit builder card is aimed at helping you to improve your credit score and if you use it correctly you should see it increasing.

Before looking for the right credit builder card, it's important to understand how credit cards work.

The different types of credit cards are:

  • Balance transfer cards: if you've already got a credit card, you can reduce the interest paid by moving your existing debt to a balance transfer card. These cards usually have a low interest or 0% rate as an introductory offer for a set period. You typically need a high credit score for this type of card.
  • Purchase cards: allow you to make purchases at a 0% interest rate for a set period. These cards are ideal for spreading the cost of a big purchase.
  • Balance transfer and purchase cards: this card will give you the best of both worlds and may suit you if your credit rating is good and you can pay off your cards quickly.
  • Reward cards: you can get rewards like cashback, shop discounts, or travel miles with these cards. They usually come with annual fees so they're only a good option if the rewards wipe out these costs.
  • Money transfer credit cards: this card allows you to transfer money from the card to your debit card. People use these cards to pay off expensive overdrafts. A good credit rating is needed for a money transfer credit card.
  • Travel credit cards: if you're travelling overseas, travel currency cards reduce the cost of using a card abroad.
  • Credit builder cards: designed for people who have a poor credit rating and are looking to build their credit score.

Taking out a credit card is a serious commitment, and if you aren't able to repay the debt, you could end up being charged a higher rate of interest, a late fee, and a mark being placed on your credit report. That's why before you start searching for yours, knowing what you're getting into is essential.

Advantages:

✔️ Spreads the cost of purchases: if you need something, you can use a credit card to pay for it and you can pay this back over a period of time.

✔️ Extra protection: it's safer than carrying cash and you're also protected under the Consumer Credit Act if anything goes wrong with something you've bought.

✔️ Building a good credit profile: many people get a credit card to help increase their credit profile so they can apply for a mortgage.

✔️ Spending abroad: you don't need to carry cash while travelling. A card can help you pay safely with little to no fees.

Disadvantages:

❌️ Long-term debt: by using credit cards, you can accrue debt. If you don't pay your cards off, you can get into severe debt that you may struggle to settle. So, paying back more than the minimum amount on your credit accounts is always a good idea.

❌️ Damaging to your credit score: although credit cards can help build your credit score, you can damage your credit score if you miss payments or pay late.

❌️ High-interest rates: you need to be careful of the interest rates on your cards. Many cards offer interest-free periods, but you must have a watchful eye for when these periods end.

How do credit builder cards work?

Credit builder cards help you build your credit score over time. They are designed to be used for small purchases which can be repaid at the end of the month.

A credit builder card works like a regular credit card but they usually have a lower credit limit and higher-interest rates. They're great if you've got a poor credit score or no credit score at all but if you can't clear the card they can be expensive.

It is also worth remembering that if you're a high-risk borrower with a low credit score, you'll find that if any credit card companies offer you their products, they'll come with much interest rates.

Advantages:

✔️ Improve your credit score: by borrowing small amounts and paying them back in full and on time every month, you can increase your credit score within six months

✔️ Purchase protection: card purchases over £100 and under £30,000 are covered under the Consumer Credit Act

✔️ More likely to be accepted: credit builder cards have lower application criteria, so you're more likely to be approved

Disadvantages:

❌️ Higher APRs: interest rates are higher than standard credit cards, usually from 27% to 60%

❌️ Lower credit limit: as you build trust with lenders, your credit limit will start low

❌️ Increased debt: if you already have debt accounts and have issues repaying them, adding another to the pile may not be a good idea

Best credit cards for bad credit scores

These are some of the factors we considered when putting together our list of the best credit cards for those with a poor credit history:

  • APR rates: although most credit builder cards have a high APR (up to 60%), we looked at ones that were on the lower end
  • Features: some cards have benefits like earning rewards, and some make it easier to spend safely abroad
  • Customer service: if any issues occur, the credit card provider must be easy to reach
  • Eligibility: it's not guaranteed you'll be accepted for every credit builder card you apply for, but we've found options for people with a poor credit record
  • Credit limits: credit builder cards usually offer a low limit, but limits will differ between card providers

Final thoughts on increasing bad credit

Using a credit builder card is one way to boost your credit score, if you are able to clear it each month. But there are lots of other ways to give it a boost too including with the following tips.

Just remember that while it is possible, there are no quick fixes and it will take time to boost your score.

You can:

  • Close unused credit accounts: if you're not using a credit account, close it, as this shows potential lenders you won’t overstretch yourself when borrowing
  • Repay on time: repaying your bills and borrowed credit on time shows you're a responsible borrower
  • Register on the electoral roll: registering on the electoral roll helps lenders as they will use this as proof of your address
  • Keep an eye on your credit file: regularly check for any mistakes and if you spot any errors, let the credit reference agency know so they can make amendments
  • Limit the number of credit applications: lots of credit applications in a row can have a negative impact on your credit score
  • Only use some of your credit limits: not fully utilising your credit limit shows your finances aren't stretched

Related Guides:

Related Articles

6 Best Avios Business Credit Cards
As a business owner, have you ever considered how to reduce travel costs? If you...
What Is a Visa Credit Card?
Are you looking for an extra cash boost but are not sure where to start? A Visa...
Best 0% Balance Transfer Credit Cards: Comparing APR, Fees, Rewards & More
Best 0% Balance Transfer Credit Cards: Comparing APR, Fees, Rewards & More
Are you looking to reduce your credit card debt and pay a lower rate of interest?...
Best Business Credit Cards in 2024
Best Business Credit Cards in 2024
Business credit cards offer a flexible way for businesses to get access to cash,...

Mentioned Banks

Part of one of the world’s biggest supermarket chains, Tesco Finance was launched back in 1997. The Head Office is based in Edinburgh, and although there were bricks and mortar branches...
Learn More
About Union Bank Union Bank, or Union Bank of Nigeria, was founded in 1917 as Colonial Bank. Its name was changed to Barclays Bank Dominion, Colonial and Overseas in 1925 after...
Learn More
About Vanquis Bank Founded in 2003, Vanquis Bank is a subsidiary of the Provident Financial Group. It works primarily in service of UK customers with poor, limited or uneven credit...
Learn More