Another night sat at the computer here on my blog. What to write about tonight I ponder. Tonight I will most likely ramble on about credit cards for bad credit. If you are interested in finding out more then please stick around.
If your credit rating is poor and you have already been hammering through many applications for a bad credit credit card then I would recommend taking a look at a recent article I wrote called ‘The Trap of applying for Credit when you have very poor credit‘. In that article I talk about a few things there which you may find interesting or it may bore you to death. Either way at least you know about it now.
Back to getting a credit card with bad credit. Well to begin this information applies to those of us in the UK. I am not sure how relevant it would be elsewhere so if you are in the UK then you are in luck.
In the UK we have several providers of credit cards for customers with bad credit. Here are the ones I know about: –
- Aqua Card.
- Barclaycard Initial
- Capital One.
- Granite (Definitely Vanquis as I have this card)
- Luma (They seem to be linked to Capital One).
- Marbles (Possible link to Aqua as both issued by Newday)
All of the above credit cards are designed for customers with bad credit but that doesn’t guarantee acceptance unfortunately. So the question is, why do you want a credit card?
- You want to rebuild your Credit Rating.
- You would like a Credit Card for emergencies only.
- You need a credit card to hire a car abroad.
- You want to spend on the card and buy lots of stuff.
- You just want credit for the sake of it.
- You need it because you have no money.
My own experiences
A few years ago I was in the process of rebuilding my credit rating. I started small and applied for a Credit Card with Capital One. I had very poor credit at the time but was hoping to improve that. The Capital One card looked like the right way to go.
After six months of managing the card well, I applied with Aqua Card. This was also accepted. Six months after that I was approved for a Credit Card with Vanquis. It was at that time I could also finally get a contact phone with O2. In all my credit rating had improved somewhat.
Unfortunately I also had all this credit at my disposal and it wasn’t long before I had spent on all three cards and got into a bit of a pickle. The Interest rates on these types of Credit Cards is very high. The end was not a good one. I defaulted on two of the three credit cards and was back to square one with credit rating.
The reason I put good and bad reasons before writing about my own experiences is so you can see what I think about these cards. Absolutely if managed well they can definitely help you improve your credit rating. The sting in the tail of course is when you spend on these high interest Credit Cards. The repayments can quickly escalate, especially if you credit limit is quite high. In the case of Aqua Card my limit was £1700, it started out at £400. The interest rate was around 40% per year so as you can imagine the interest charged each month was quite expensive.
What do you want to do?
OK so if you are still reading this than thank you. What is it you are looking to achieve? Do your answers fall within the good reasons or bad reasons I provided above? If your reasons are good then I wish you all the best when you make your application. If your answers are bad then it is story time.
Once upon a time a guy had three bad credit credit cards. At first he was very good with them, paying off the balances in full and only spending in an emergency. Suddenly the temptation to spend on these cards became too much and he maxed them all out quite quickly. The repayments got out of control and in the end his credit rating was very poor again. Two defaults later and it was all over.
Well of course the story above is just me but I just want anyone who reads this to see what could happen if you take your eye off the ball. These cards can be a blessing to some but a complete nightmare for others. So long as you are careful then there is no reason for you not to get one, unless there is something you aren’t telling me? Just kidding.
Applying for a Credit Card with Bad Credit
OK so you have decided that you want to apply for a credit card with bad credit. Excellent. Before you go rushing off here is some useful information. Before making any applications I would recommend signing up with Noddle. Noddle offer a FREE credit report but what’s even better? Well for a start you can find out whether you are likely to be accepted for a credit card without harming your credit rating. This is very important when your credit rating is poor as you don’t want to cause further damage by making a massive amount of applications for credit.
Once you have completed your sign up there is a Card Matcher link at the top of the page. Simply click that link and put in some details. You will then be shown a list of cards you have been matched to. As it stands today the only match was with Vanquis. 🙁 However I am working on fixing my Credit Rating, a bit like you then really. 🙂
The reason you would want to use something like the Card Matcher option over at Noddle is it saves you making a ton of applications with each individual lender only to have your application declined. It also saves lots of credit searches appearing on your credit report in a short space of time, something that can also have a negative effect on any future applications you make.
I realise that like most of my articles, this one may have gone a bit all over the place so here is a handy summary of what I waffled on about…
- A Bad Credit Credit Card is good for emergencies and helping you to rebuild your credit rating.
- A Credit Card for Bad Credit is not good if you are going to borrow long term and have to repay interest.
- I once had three Bad Credit Credit Cards and damaged my Credit Rating even further.
- Noddle let you get your Credit Report for Free and have a Card Matcher Service.
That’s it for now. Not sure what I write about next but I hope this article helps someone out there who is searching for a credit card for bad credit!
Image: bluebay / FreeDigitalPhotos.net