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What Are The Best UK Credit Cards For Bad Credit (In 2014)?

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Credit cards don’t just make life a little easier; they’re also a great way to start rebuilding your credit if your credit has suffered in the past.

Of course, credit cards also represent a significant temptation so if you’re struggling with debt they’re generally best avoided so your problem isn’t worsened. But, if you’ve got your finances on track and you’re keen to start building your credit, which cards will actually accept you?

Features Of The Best UK Credit Cards For Bad Credit

If you’ve got bad credit then getting a credit card can be a real struggle. Due to the perceived increased risk that you will default on your payments, many “standard” credit card providers will refuse your request for credit.

You should also be aware that repeated credit applications can have a negative impact on your credit score – making it ever-more difficult to get approved for credit in the future.

Therefore if you know you’ve got bad credit having made late payments, defaulted on debts or suchlike it’s generally far safer (and easier) to apply directly to one of the credit card companies specializing in offering accounts to those with bad credit.

Not only are your chances of acceptance far higher but you also won’t be made to feel like a criminal when speaking to the card company!

That said, there are some differences between standard credit cards and UK credit cards for bad credit that you should be aware of. For example your credit limit is likely to be far lower than those offered to individuals with better credit.

Additionally, the interest rate is likely to be much higher – and indication of the increased risk that the credit card issuer feels they are taking.

Arguably these can be seen as good things. The low credit limit should (hopefully) prevent you from spending too much money on your card. In addition, with such a high interest rate you won’t want to spend too much money or it’ll take a long time to pay off.

Most providers of UK credit cards for those with bad credit make it as easy as possible to monitor and manage your account. Most offer online account management tools so you can log in securely, check your balance, view recent purchases and make payments on your card.

Some companies extend this “visibility” by offering text or email alerts, as well as mobile apps. All these services help to ensure that you don’t go over your credit limit and make your monthly payments on time so they should be seen as very positive aspects in helping you rebuild your credit.

And let’s not forget that a credit card for bad credit isn’t for ever. Take on a new card, spend wisely on it and make regular payments and you’ll see your credit rating improve over time.

Top UK Credit Cards For Bad Credit

Vanquis Credit Card Review

Vanquis is one of the original specialist providers of UK credit cards for bad credit. They currently have 1.8 million cards in circulation so are one of the best-known providers around.

Initial credit limits vary depending on your circumstances as may start as low as £150 or as high as £1000. Over time, if your card is carefully managed your credit allowance can go up to a maximum of £3000 over a period of years.

Like most of their competitors, Vanquis offer an online account management portal to keep an eye on your spending, manage your credit limit and make regular payments on your card. In addition, Vanquis offer a very helpful “text alert” service which provides you with instant reminders about forthcoming bills and outstanding balances ensuring you never miss a payment.

Equally, it’s worth noting that while the interest rate offered by all these providers is similar, the rate Vanquis offers is higher than most at 39.9% APR meaning you’ll pay more interest on purchases than you will with other competing bad credit cards.

Luma Credit Card Review

Luma offers credit limits up to £1,500 with a standard 35.9% APR interest rate. They offer online account management, a very welcome mobile app and text alerts to help you manage your card.

Sadly besides these “standard” features there isn’t a lot really that makes this card stand out. Even the so-called “rewards” – offering retailer discounts – are minimal and hardly worth writing home about.

Granite Credit Card Review

In many ways the Granite card is like a Vanquis card on steroids. Infact, while the card may have a different name, it’s actually issued and managed behind the scenes by Vanquis bank.

But if that’s the case, why should you consider a Granite card rather than the standard offering direct from Vanquis?

The primary improvement is the lower interest rate of 35.9% APR, though this is in line with many competing cards. On the downside, Granite offers no text alerts, no online account management and a maximum credit limit of up to £1,000.

The only stand-out benefit of this credit card for poor credit is the “rewards” package they offer – with discounts at a wide range of well-known high-street stores and online retailers.

Barclaycard Initial Review

Barclaycard is one of the better-known credit card brands in the UK, but did you know they also have an offering specially for those with bad credit? The so-called Barclaycard Initial is designed specifically either for people that have had problems with their credit, or who have no credit history whatsoever.

In line with many of their competitors the Barclaycard Initial offers a 34.9% APR interest rate, an initial credit limit up to £1,200 and the ability to manage your card account online.

To make managing your account even easier, Barclaycard also offer a mobile app together with email and/or text alerts to help you stay in control and manage your finances. In other words, there’s a solution for everyone.

There are two features however that help the Initial credit card stand out from the crowd. Firstly they offer 0% in all purchases for the first three months. Clearly this is a double-edged sword intended to get you spending as soon as possible on your card. However it *will* potentially save you money over the first few months – particularly useful if you’re considering using this card to rebuild your credit.

The other feature is that, rather like the Aqua card, Barclaycard promise possible rate reductions after a 12 month period if you keep your account in good standing. However the amount your rate will be reduced to is not clearly provided so it’s really a case of “buyer beware” here.

Capital One Classic Card Review

Capital One is a very well-established credit card provider and their credit card for those with bad credit is their most popular card of all. Known as the Capital One Classic card, it offers an initial credit limit of between £200 and £1,500 with a standard interest rate of 34.9% APR.

Capital One offers an online account management facility together with a mobile app though in an honesty it’s currently missing many of the features that makes their online service so popular. Reasonable for checking your balance or recent purchases, but you’re currently not able to update your personal information, make payments and so on.

Email alerts can be set up from your online account and the company promises regular raises to your credit limit if your account has been kept in good standing for some time.

That said, be aware of course that due to the interest rates currently being charged by most of these competitors, an increased credit limit does create additional temptation to spend on your card.

If you’re suffering from bad credit due to some unfortunate decisions in the past it’s therefore essential that you monitor your spending/interest/repayments carefully to ensure you can always been your obligations to the bank. Without this, you’ll struggle to improve your credit.

Aqua Classic Review

Aqua is a relative newcomer to the credit card market, servicing just 350,000 customers at present – a tiny percentage of Vanquis’ customer base. That said, this isn’t because of the services they offer.

With an initial credit limit between £100 and £1,600 and an interest rate of 35.9% APR you may well find this card works out quite a bit cheaper than Vanquis thanks to the noticeably lower interest rate.

Just like Vanquis, Aqua offers text alerts and online account management but they also offer one unique service which helps them stand out from the crowd.

Namely, if you properly manage your credit card account by ensuring it stays within the agreed credit limit and you make at least the minimum payment every month Aqua will actually reduce your interest rate by 5% a year.

In other words after three years your interest rate could be as low as 19.9% – half that offered by other card companies on the market.

Not only is this a very welcome reward to anyone that is trying their best to manage their card responsibly, but it also makes your card more affordable the longer you keep it.

This feature alone makes it, on our opinion, one of the very best credit cards for those with poor credit.

Comparison Chart

In the hope of making the main similarities and differences between these cards even easier to digest, here’s a simple comparison chart we’ve put together.

Credit Card IssuerInterest Rate (APR)Maximum Credit LimitBenefits
Vanquis 39.9%£150-3000
Luma35.9%Up to £1500
Granite34.9%£150-3000Discounts at retail stores
Barclaycard Initial34.9%Up to £12000% interest on new purchases for 3 months.
Capital One34.9%£200-1500
Aqua35.9% but dropping by 5% per year down to 19.9%£100-1600Free access to your credit report

The Best UK Credit Cards For Bad Credit

So now we’ve analyzed and discussed some of the best credit cards for bad credit the only thing remaining is to make a judgement call about which is the very best card currently on offer in 2014.

At the time of writing, and based on all the previous analysis, I’d have to say that the best card of all is the Aqua card. It offers free unlimited access to your credit report to help watch your credit improve, a reasonable interest rate and regular drops to your rate over time when you manage your account properly.

Looking for the best UK credit cards for bad credit? Here's a rundown of the best credit cards for this year.

Richard

Sun-worshipper and obsessive frugality blogger. For loads more money-saving advice come and join us on Facebook.

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