It is very difficult to obtain a credit card if you have had bad debt problems, however there are a few cards out there that may well suit you.
Experiencing bad debt problems is difficult enough, but finding ways to improve your personal finance situation and find ways to pay for everyday items is also challenging, particularly if you can’t get a credit card.
Fortunately help is at hand as a few credit card companies now have cards aimed at those with bad debt problems, although it does depend on the severity of your situation, and there is a price to pay with higher than average interest rates.
If you have been declared bankrupt within the last twelve months then you will just have to accept that even the most forward thinking credit card company will be reluctant to offer you any form of credit, although there are some pre paid card options available to you.
Prospects for those who have been declared bankrupt more than twelve months ago, or who have CCJ’s or taken out an IVA, look better, as we discuss now.
Vanquis Credit Card
The Vanquis credit card is designed for those with debt problems and they will consider applicants on a case by case basis.
So if you need a credit card and your have bad debts problems then apply to Vanquis and let them decide if they want to accept you or not.
There is a penalty with interest rates, however as they charge 39.9% representative APR, which is high when you consider that most conventional cards charge around 16.9%.
The benefit of this credit card is that you can slowly rebuild your credit score as start to repair your credit file. This is because they will gradually raise your credit limit when you prove to them that you are managing your account well.
This means meeting your monthly payment obligations without falling behind and managing your budget well without adding more debts.
Capital One Classic Credit Card
The Capital One Classic credit card is also designed for those with bad debts.
The most important criteria for Capital One is that you must have some credit history, be over 18 and have UK residency.
They will not accept applications from those declared bankrupt within the last 12 months, but will consider those with loan defaults and CCJ’s.
If your application is acceptable then you will be given a credit limit of £200 which will be reviewed periodically. There is a 34.9% APR representative variable interest rate to consider however.
Aqua Credit Card
The Aqua credit card is also aimed at those with debt problems, or who have difficulty being accepted elsewhere because they are self employed or are not on the electoral roll.
There is a 35.9% APR representative variable interest rate, but there is no interest payable on purchases if the card balance is paid in full every month and no annual card fee.
Aqua already have 150,000 people using their credit card so they are definitely worth considering if you need a credit card, but are struggling to be accepted elsewhere.
So if you are experiencing bad debt problem, it is reassuring to know that there are several companies who will at least consider offering you a credit card.
The key point to consider, however, is responsibility. By using your account carefully and ensuring that you pay your monthly bill, you can start to repair your credit history bit by bit, which is very good news for your long term prosperity.