How do credit cards for poor credit work in UK?
If you decide to take out a card for poor credit or a credit-builder credit card, it will give you an opportunity to improve your credit score and build your credit history from scratch, or to rebuild your credit if you’ve had some financial difficulties with your borrowing in the past. Your payment history for your new credit card will be reflected in your credit report, thus helping you build or rebuild your credit. It is important to remember that if you only make your minimum monthly repayments, or continuously carry a high balance, it may hinder you if you are trying to improve your credit rating.
Getting into the basics of credit cards - they allow you to buy things ‘on credit’. They are a form of borrowing. You’ll get an agreed credit limit, and can make purchases up to this credit limit; then you’ll get a monthly bill for everything. It’s ideal to pay everything off each month - if you’re unable to do so, there will be a minimum repayment you can make; but ideally you should make more than the minimum repayment.
If you don’t pay off your full balance every month, then you will pay interest at a rate agreed when you take the card out. It is a good idea to set up a Direct Debit as soon as you can when, or after you take out your card. This means you'll be sure to make your monthly repayment on time, every time, providing you have the funds available in your bank account.
Some credit cards for poor credit also allow you to make cash withdrawals, but this can be at a different rate to the purchases you make, and you might have to pay a fee for each withdrawal you make. You can compare various bad credit credit cards by looking at their representative example, and the pre-contractual documents provided during the application journey (such as a Summary Box). This will allow you compare the credit limit, interest rate and representative APR.
How can I apply for a poor credit credit card?
The first step is to check if you’re likely to be accepted for a poor credit credit card using a pre-application eligibility checker. Many card lenders, including 118 118 Money offer this service for their cards on their site. This can be beneficial if you have poor credit as you can see if you’re likely to be accepted or not. This saves you creating unnecessary footprints on your credit report, too many of these in a short period can also have negative impact on your credit score.
To complete the pre-application checks you’ll need to provide information such as your name, address, employment details and outgoings – the exact information required may differ between lenders. By verifying this information, the card provider can give you an indication if you’re likely to be accepted or not.
If the eligibility checker indicates you’re likely to be accepted, you can then make an informed decision based on your individual circumstances whether you wish to apply with that lender or not. Remember, if you choose to complete a full application, a full credit check will be completed.
Introducing something totally different
Finally, there's a credit card that's as unique as you are. The 118 118 Credit Card – guaranteed rate credit card - a credit card for people with less than perfect credit.
Unlike other credit cards, you’ll find it easy to use and understand. And it can help build up your credit if you stay within your limit and make at least the minimum payment each month.
You can use our Eligibility check to find out what credit limit we'll offer you before you apply.
Remember, we do charge fees for late or missed repayments (£12) and cash withdrawals too (5%).
What makes the 118 118 Credit Card different?
With its simple flat interest rate and a guaranteed credit limit, we’re here to offer what no other credit cards for people with poor credit can.
- No fee for balance transfers on this 118 118 Money Credit Card.
- Get one simple interest rate.
- Interest free period for up to 51 days on purchases, so long as you pay off your balance in full each month.
- Guaranteed Credit Limit. Guaranteed APR.