Bad credit history and desperate to rebuild your financial future?

As many as one in four of us in the UK have some form of adverse credit history such as late bill payments, defaults, arrears or CCJ’ s according to First4finance, the directory of UK finance websites.

Fear not as it seems that it’s not as difficult as you’d imagine with credit cards that are designed to do just that.

How do they work?

Here’s a piece of advice from me to you… don’t be tempted to spend on your new credit card unless you can repay in full immediately.

This is really important because the high rates of interest mean that your spending will spiral out of control and potentially leave you in a worse position.

However, I’d recommend using your credit card to make purchases. When you pop to the shops, instead of using a debit card or cash, use the credit card and pay the bill straight away.

This positive behaviour will show the credit card provider that you’re capable of managing your spending and always repay on time. Over time your credit score should start to improve – you may get a credit limit boost or even be transferred to a new ‘standard’ credit card.

If you’re up giving your credit rating a helping held, check out my top 5 credit cards on the market today. You can research more credit cards for bad credit more on our comparison tables.

Capital One Progress

Interest rate: 29.9% APR variable
Credit limit: Up to £1,500
Credit rating: Good
Minimum age: 18 years

Key Features:

• Reducing interest rate – 2% reduction every 6 months
• Identity theft protection
• Online account management
• Purchase protection insurance

I think the main thing to bear in mind with this card is that if you keep to your minimum payments, your interest rate could start to decrease. If you’re paying your balance immediately, like I’ve recommended, you should start to see the benefit straight away. Find additional information and apply for the Capital One Progress credit card here.

Aqua Classic

Interest rate: 29.7% APR variable
Credit limit: Up to £1,600
Credit rating: Good
Minimum age: 18 years

Key Features:

• Free Aqua credit checker
• Interest free purchases (subject to full monthly payment)
• Flexible payment dates

This credit card is ideal for people that have struggled to register on the credit score radar. It’s a catch-22, as if you’ve never had access to credit, whether it be a loan, overdraft, store card, mobile phone contract, you’ll struggle to get started. However, the Aqua Classic is available for self-employed and people new to credit. Find additional information and apply for the Aqua Classic credit card here.

Aquis

Interest rate: 29.8% APR variable
Credit limit: £1-3,000
Credit rating: Good
Minimum age: 18 years

Key Features:

• 24/7 Fraud Watch
• SMS and online account management

As the Aquis credit card has a credit limit of up to £3,000, it’s ideal for people that are planning to make larger purchases. No matter how large your purchase, don’t forget to repay in full as the interest charges could start to cause you trouble.

Remember that this credit card is designed to get you out of your credit nightmare, not start a new one. Find additional information and apply for the Aquis credit card here.

Capital One Classic Extra

Interest rate: 34.9% APR variable
Credit limit: Up to £1,500
Credit rating: Good
Minimum age: 18 years

Key Features:

• 0.5% cashback on all purchases
• £10 annual bonus available
• 60 second application
• Choice of card design

I particularly like the Capital One Classic Extra because of the ability to earn some cash, rather than simply spend it. The interest rate is quite high in comparison to some of the others, but if you repaying in full, this shouldn’t be a problem. Find additional information and apply for the Capital One Extra Classic credit card here.

Aqua Advance

Interest rate: 34.9% APR variable
Credit limit: Up to £1,600
Credit rating: Good
Minimum age: 18 years

Key Features:

• Free Aqua credit checker
• Flexible payment dates
• Online account management

If you’re unable to obtain any of the other credit-builder cards, the Aqua Advance is probably a good starting point. Again, the interest rate is quite high, but it’ll allow you to boost your score before moving to a ‘better’ card. Find additional information and apply for the Aqua Advance credit card here.

So, there you have it, my top five credit card lifesavers. Although these cards are designed for people with poor or no credit ratings, not everyone is guaranteed acceptance.

You can compare the top credit lifesavers at our website.

If you’re struggling to find a bad-credit card suitable for you, the next best option is a credit-builder prepaid card. These cards are not the same as a credit card, but by paying the monthly fee as a form of credit, you can give your credit history a head start.

	Written by :
	Jemma is a news & research reporter for compareandsave.com.Having worked as a journalist on a number of personal finance websites; she now spends time researching and commenting on UK personal finance stories and investigating new ways to help our readers save money.For press enquiries, please visit our Media Centre page.

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Average consumer borrowing (including credit cards) was £4,231 in March, an increase from the previous month, according to the latest statistics from Credit Action (the UK the national money education charity). Throughout the month 0.4 million purchase transactions were made using plastic every single day, racking up a total value of just over £1.5 billion.

When you consider the huge amounts, we are spending on credit cards you realise how important getting a good deal on your borrowing is. There are hundreds of credit cards on the UK market, but they are not all the same; there are many different types with various interest rates, benefits and certain regulations.

It definitely pays to shop around to ensure that your pack of cards is a strong hand. At compareandsave.com, we show you how to find the hot cards to keep in your wallet.

 Reward yourself

This type of credit card is designed to reward the customer every time they spend on their plastic. The rewards can vary from air miles, to cinema tickets and vouchers for grocery shopping.

It’s important that you work out the maths behind the rewards scheme, i.e. how much each point is worth in real money as these schemes can sometimes offer abysmal benefits.

British Airways American Express
Reward: BA Miles
Value per point: 0.68p
APR: 19.9%
Fees: None

Tesco Clubcard Credit Card
Reward: Tesco Clubcard Points
Value per point: Up to 4p on Rewards, 1p in store
APR: 16.9%
Fees: None

Royal Bank of Scotland
Reward: Reward Points
APR: 17.9%
Fees: None

Make the most of Cashback plastic

These cards are a type of reward scheme, but rather than points or air miles, users receive tax-free cash back in return. Every time you spend on the card, you receive a percentage of the value of the transaction back.

It’s important to keep an eye on the interest rate and annual fees with cashback credit cards.

Santander 123
Reward: 3% cashback on fuel (£300 per month cap), 2% cashback on selected department stores, and 1% cashback at the supermarket.
APR: 22.8%
Fees: £24 per year

Capital One MasterCard
Reward: 5% for 3 months, then up to 1.25% thereafter
APR: 19.9%
Fees: None

American Express Platinum Cashback
Reward: 2.5% for 3 months, then up to 1.25% thereafter
APR: 18.5%
Fees: £25 per year

Let’s build your credit

Bad credit or credit builder cards are ideal for those with little or poor credit history, as they provide users with smaller, manageable credit limits and the ability to rebuild a credit score.

The interest rates are much higher than standard cards, so the balance should be paid in full every month.

Aquis Visa Card
Credit Limit: Up to £1000 upon application, up to £3000 thereafter
APR: 28.9%-59.9%
Info: No 0% promotional period

Barclaycard Initial
Credit Limit: Minimum of £250
APR: 29.9% variable
Info: Not suitable for CCJs within last 12 months

Granite Credit Card
Credit Limit: Up to £500
APR: 34.9%-59.9%
Info: Existing Vanquis cardholders not eligible

Which balance transfer cards?

Moving your existing credit card debt to a new balance transfer credit card can save you significant amounts of money in interest charges. The new card repays your existing debts, clearing the cards, and starting again on a new card with 0% interest (for a limited period).

Avoid spending on this type of credit card and always keep an eye out for the balance transfer fee.

NatWest Platinum
0% Balance Transfer Period: 22 months
APR: 17.9% representative
Balance Transfer Fee: 3.2%

Halifax Balance Transfer
0% Balance Transfer Period: 22 months
APR: 17.9% representative
Balance Transfer Fee: 3.5%

Barclaycard Platinum
0% Balance Transfer Period: 22 months
APR: 17.9% representative
Balance Transfer Fee: 2.9%

Slash your card interest

Although balance transfer credit cards may be tempting with a 0% interest introductory period, but for people unable to clear their credit card debt within the interest free period, low interest cards are often more appropriate.

Sainsbury’s Low Rate Credit Card
APR: 6.9%
Eligibility: Good credit rating, Nectar customers only
Balance Transfer Fees: None

Barclaycard Platinum Simplicity
APR: 7.9%
Eligibility: Good credit rating, no Barclaycard balance transfers,
Balance Transfer Fees: None

Co-operative Bank Clear Credit Card
APR: 12.9%
Eligibility: Good credit rating, No Co-op bank balance transfers.
Balance Transfer Fees: None

It is easier than ever before to compare the different types of credit cards so there is no excuse to be caught out by a poor deal. If you’re looking for a new credit card, here are some final key things to watch out for before you chose the best hand for your wallet:

• Interest rates
• Fees & charges
• Eligibility criteria
• Rewards
• Credit limit

	Written by :
	Jemma is a news & research reporter for compareandsave.com.Having worked as a journalist on a number of personal finance websites; she now spends time researching and commenting on UK personal finance stories and investigating new ways to help our readers save money.For press enquiries, please visit our Media Centre page.

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If you are struggling with a poor credit rating you will find yourself excluded from the vast majority of mainstream credit options, including overdrafts, personal loans, mortgages, and credit cards. However, credit builder cards have proven to be a popular way for people to improve their credit rating and learn about managing their borrowing (without resorting to Pay day loans!).

Credit builder cards (often referred to as “bad credit credit cards”) offer consumers the opportunity to borrow small amounts and repay it. They typically have fairly low credit limits (£100 and £500), so there’s little possibility of debt spiralling out of control.

Of course there is a downside to credit building cards, they’re incredibly expensive. Interest rates can vary anywhere between 25% and 50% on these cards, making it all the more important that you do not use the card as a means of obtaining additional funds and pay off your balance each month.

The credit building card market
If you are in the market for a bad credit, or credit builder credit card, you might think that there is quite a lot of choice. A quick glance at a few comparison websites (including this one) shows us a number of cards available including ones from:

• BarclayCard
• Capital One
• Aqua
• Vanquis
• Aquis
• Granite

Considering the credit building card market isn’t the biggest of credit card categories, a choice of six different cards seems pretty reasonable. However, when you dig deeper you will find that you are not being offered the competitive market you first thought.

Rebadged cards
Vanquis Bank was launched in 2002 by its parent company Provident Financial, it is based in the UK, and in its 10 year history has accepted over 1 million customers. The Vanquis credit builder card is designed to help those with bad credit rebuild their history, improve their rating, and access more affordable credit in the future.

The Vanquis card offers a representative APR of 39.9%, a credit limit between £150 and £1000 depending upon your credit rating, and online account management.

The Granite card is geared more towards those with a very poor credit rating, as the maximum credit limit upon application is £500, but this can increase up to £3000. The representative APR is slightly better than that of the Vanquis at 34.9%. The Aquis Visa credit card offers an even better APR at 29.8%, and credit limits of up to £1000, also increasing up to £3000

All three of these cards are provided by the Vanquis Bank, the Granite and Aquis are essentially just rebadged Vanquis credit cards with slightly different terms.

Other credit building cards
The remaining credit builder cards, Capital One, Barclaycard, and Aqua are all separate credit cards and companies, so in reality there are only four options open to those searching for a credit builder card.

The Initial Credit Card, from Barclaycard, was launched to help consumers improve their credit rating. The card has a Representative APR of 29.9%, which one of the better rates available for cards promoted as credit building. It also offers access to the Freedom rewards scheme and includes contactless payment from Visa.

The aqua card celebrates its 10 year anniversary this year, and has helped hundreds of thousands of customers in that time. The card is aimed that those struggling to obtain mainstream credit cards either because of previous problems with debt, employment status, or income.

Last but by no means least, the Capital One Classic offers consumers credit limits between £200 and £1,500, and has a Representative APR of 34.9% on purchases, cash withdrawals, and balance transfers

When it comes to credit building cards, the choice really is yours, but choose well as each time you apply a your credit profile will be checked (and ironically multiple checks on your credit profile actually impact your credit score) and remember to check who’s really powering the card you’ve selected.

	Written by :
	Jemma is a news & research reporter for compareandsave.com. Having worked as a journalist on a number of personal finance websites; she now spends time researching and commenting on UK personal finance stories and investigating new ways to help our readers save money. For press enquiries, please visit our Media Centre page.

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With 1,603 County Court Judgments (CCJs) issued every day in the final quarter of 2010 and a person in the UK declared insolvent or bankrupt every 4.28 minutes, it’s no surprise that thousands are struggling with poor credit ratings.

When people get back on their feet and regain control of their finances, one of the first things they want to know is how to improve their credit rating. Our guide outlines five easy ways you can rebuild your credit standing.

1. Make sure the information on your credit file is correct

A common reason why people have a less than perfect credit rating is because there is incorrect or inaccurate information on file. If the information held by a credit reference agency is incorrect it stands to reason that there may be discrepancies when you come to apply for more credit in the future.

For example, you may not have changed your address on certain financial products when you moved home. Alternatively, your bank may have made an error regarding a payment which they have never corrected. It is wise to look carefully at your credit information in order to make sure that it is accurate.

2. Get on the electoral roll

One of the simplest ways that you can improve your credit rating is by ensuring you are on the electoral register. This is a crucial part of the underwriting process for many lenders and you will often be penalised in a credit score if you’re not on the voter’s roll at your current address.

You don’t have to wait until the annual reminder to be added to the electoral roll. You can write to your local council and be added at any time.

3. Use credit builder credit cards

There are lots of credit cards for bad credit available in the market. These cards are offered to applicants with a less than perfect/slim credit history and are designed to help you improve your credit rating by demonstrating that you are capable of managing credit responsibly.

Credit builder credit cards typically carry higher interest rates than other credit cards and so it’s vital that you compare credit cards before choosing one. The aim of credit builder credit cards is that you use them for purchases and then pay off your balance in full each month on time. Over a few months, your credit record will show that you have consistently made a payment to your credit card each month, demonstrating to future lenders that you are a good risk and that you will pay your commitments.

4. Make sure you manage your credit responsibly

The best way that you can improve your credit rating is to ensure you make all payments to loans, credit cards for bad credit, mortgages, secured loans and store cards on time.

Your credit file will record any late or missed payments and so it’s vital that you try and ensure all your payments are made in full and in a timely fashion every month. Only by demonstrating that you can manage financial commitments will you be granted further credit in future.

5. Regularly review your credit file

Once you have started using credit cards for bad credit and you are making your payments every month, it is important that you obtain a copy of your credit file on a regular basis to ensure the information remains accurate.

Regularly reviewing your credit file will ensure that the information held about you is accurate and up to date and will help you monitor for any fraudulent activity taking place under your name.  Most experts recommend obtaining a copy of your credit file from a credit reference agency, such as Experian, at least once every year.

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The demand for poor credit finance, including credit building credit cards and personal loans, remained high in 2010 after one third of all credit card applications were declined due to poor credit. The research from Equifax, published in the Daily Express, also found that a third of those declined had no idea why they were refused credit.

Poor credit card knowledge sees applicants refused deals

Neil Munroe from Equifax, one of the UK’s leading credit reference agencies, said: “The credit card market is still relatively subdued as lenders remain cautious about who they extend new credit to.”

One of the ways that you can increase your chances of avoiding credit builder credit cards is to regularly check your credit file.

Mr Munroe continued: “It’s vital consumers understand…how they can make sure their credit rating is at its best for them to get the most favourable interest rate.

“More than half of those who were refused a new credit card simply gave up applying. If they had checked their credit file they may have found they could do something to improve their chances in the future.”

There are various ways that you can improve your credit rating, such as ensuring you are on the electoral roll, correcting any personal information that is inaccurate (such as your address) and querying any adverse credit that has been registered in error.

Poor credit finance can help rebuild credit rating

If you have been refused credit due to a poor credit rating, credit building credit cards are a good way to help rebuild your credit standing.  A poor credit card can help you demonstrate that you are capable of managing a credit card responsibly by making your repayments on time every month.  By proving that you can manage poor credit finance, your credit rating will improve making it much more likely you will be approved for a leading credit card in the future.

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According to the ft.com, UK household utility bills look set to double every five years until at least 2020. These huge hikes are predicted due to the vast amount that utility companies need to invest to meet both future demand and environmental obligations, such as the Carbon Emissions Reduction Target.

The reasons behind the rocketing prices are laudable and understandable, but many households will find the rise in costs a huge strain on already tight finances. So, how can consumers keep on top of rising bills if income isn’t climbing at the same rate?

To start with, it makes sense for people to take a closer look at their spending – are there any unnecessary expenses that could be cut out to save money? People can also ‘jam jar’ their money by putting cash aside for their critical everyday living expenses, such as paying utility bills.

A prepaid credit card is the way forward for many people. All the customer has to do is top up their card with the amount of money needed to cover their bills – straight after pay day usually tends to work best. Then whatever further calls on their money are made, they can rest easy because they know that they’ve reserved the cash needed to stay on top of those rising water bills and shocking power bills.

One of the leading prepaid cards in the UK is the Cashplus prepaid Gold MasterCard®.  Cardholders can choose the ultimate in bill paying convenience: they can set up as many as 20 standing orders to automatically take care of their bills and subscriptions. So as long as the customer keeps topping up their account with the relevant amount, they need never miss a bill again or be hit by unexpected penalties that would further bite into the household budget.

And of course, they can save themselves valuable time and money spent on travelling to pay a utility bill in person.

Most prepaid cards allow customers to keep track of their outgoings 24/7 via free transaction tracking online, and get balance updates by opting for a text service. The latter are especially handy when out and about without access to an online computer.

Cashplus has made sure that topping up the account is convenient too – there are over 13,000 locations right across the UK where customers can top up for free.

With the rise in the cost of living and the stall in wage increases, plus a reluctance to hand out mortgages, it wouldn’t be surprising if there was a trend towards more people getting to together to rent a place. Again, prepaid cards can help keep on top of bills, because they’re ideal for pooling money to share the running costs, which is helpful for house-shares in particular. In fact, with some prepaid cards you can add up to four additional cards to one account.

It’s ironic that the very people who would find a card a great budgeting tool, are often excluded from having one. But with a prepaid card, acceptance is guaranteed for anyone aged 18 or over that lives in the UK. So the prepaid sector can help practically any household to budget for the dramatically rising cost of utility bills.

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Increasing numbers of Brits are turning to credit building credit cards having been refused credit in 2010, according to new research. The figures come as charity Credit Action reports that the total personal debt in Britain at the end of February 2011 was £1.454 billion, with someone declared insolvent or bankrupt every 4.28 minutes.

Millions turning to poor credit finance having been refused credit in 2010

The research from a leading price comparison website found that almost 4.5 million people were refused credit in 2010. With household debt rising (the average household debt in the UK is now £57,697), more and more people are expected to struggle to pay their credit cards and debts in 2011.

A study by a rival comparison site found that 22 per cent of people will be struggling to pay back the debt they owe on their credit cards in 2011. Late or non-payment will reduce their credit rating, increasing the numbers of people who will have to turn to poor credit card finance in the future.

Credit building credit cards can help you repair your credit rating

If you are one of the 4.5 million people that were refused credit in 2010, or if you have defaults, County Court Judgments (CCJs) or late payments on your credit file, you may find it tough to be approved for a credit card.

This is where poor credit finance can help you. Credit building credit cards are designed for people who have a less than perfect or ‘slim’ credit history. They allow you to use a credit card and make your payments on a regular basis, proving to future lenders that you are capable of managing credit responsibly.

Poor credit cards nearly always carry higher interest rates than standard credit cards (as they are a riskier proposition for the lender) but if you pay on time every month they can help you rebuild your credit and improve your chances of being approved for standard loans or credit cards in future.

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How good is your credit score?

With lenders ever increasingly using credit scoring to make lending decisions, having a good credit score has never been more important.

One way to improve your credit score is to use ‘credit building credit cards’. Our guide explains how these cards can help build a good credit score, as well as outlining two other ways that you can improve your credit rating.

Credit building cards can help build a good credit score

You may be surprised to learn that the most common reason applications for credit in the UK are declined is not for ‘bad credit’. In fact, the most common reason to be knocked back for a loan or credit card is because of ‘thin credit’ – where there is insufficient information about you on file for a lender to make a decision.

So, it is important that you build up a good credit record. Credit building credit cards allow you to demonstrate to lenders that you can manage credit. By using credit building cards and making all your payments on time, your credit record will show that you are capable of responsibly managing your borrowing.

If you do have poor credit, bad credit credit cards will again help you to repair your credit score.  Over time, making all the necessary payments to your poor credit credit cards will prove to future lenders that you are a low risk.

Make sure you are on the electoral roll

One of the easiest ways you can improve your credit rating is to ensure you are on the electoral roll.  Don’t wait for your annual reminder; contact your local council and make sure you’re on the voters roll straight away.

Make your payments on time

If you miss a credit card or loan payment, that will stay on your credit file for up to six years. A silly oversight can therefore prove costly for a long time. To protect your credit rating, make sure you always make at least your minimum repayments on time.

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How good is your credit rating?

More and more Brits are suffering from a poor credit rating. Credit Action, one of the UK’s main debt charities, reports that there were 1,716 County Court Judgments (CCJs) issued in the third quarter of 2010 and that the Citizens Advice Bureau deal with 9,389 debt cases every day in England and Wales.

However, even if you have poor credit, it is possible to take proactive steps to improve your credit rating.

James Jones, from credit reference agency Experian, recently said: “Although different lenders tend to employ different criteria for assessing credit applications, there are general things you can do that will certainly improve your chances of success, such as paying your bills on time and keeping a close eye on your credit report.”

1. Use credit building cards and loans

Credit building credit cards are designed for people with poor credit. While they may carry an interest rate that is higher than some other cards, they allow you to make purchases on your card and to make regular, timely payments. Using credit building cards carefully proves to lenders that you are capable of managing credit responsibly.

You could also consider bad credit loans which work in the same way.

2. Make sure your credit information is correct

Incorrect information, such as misspelt names or a wrong address, can harm your credit score. So, regularly check your credit report and correct any errors. If you don’t, you may find that you are declined for any type of credit, even credit building credit cards.

3. Pay everything on time

As well as paying all your bad credit loans and credit building cards on time, you can improve your credit rating by paying all your bills before the due date. Mortgage lenders, store card providers and even utility companies are now sharing information with credit reference agencies. Any missed or late payments will damage your credit rating.

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If you have experienced credit problems in the past then you may think that you will be ineligible for a new credit card. However, credit building credit cards are designed to help people who have a less than perfect credit history.Here are five things you should know about credit building cards:

1. You don’t need a perfect credit rating to get one

If you have defaults, arrears or county court judgments (CCJs) on your credit file you may have struggled to be accepted for a credit card through a traditional source. Credit building cards are designed for you if you have experienced credit problems in the past.

2. They can help you get your credit rating back on track

Along with bad credit loans, credit building credit cards are designed to help you repair your credit rating. If you make your payments on time on a regular basis, it will demonstrate to future lenders that you are capable of managing credit responsibly.

3. They will charge a higher rate of interest

As far as a lender is concerned, if you have had credit problems in the past, you are a riskier customer. That is why credit building cards often charge higher rates of interest than standard credit cards.

4. They offer many of the benefits of traditional credit cards

Credit building credit cards offer many of the same benefits as traditional credit cards. You can use them for the purchase of many goods and services in stores or online.

5. Your credit limit may increase as you go along

If you manage your credit building cards carefully and responsibly, and make all your payments on time every month, you may find that your credit limit increases. As you prove that you are a responsible and reliable customer, you may find that your credit limit will rise and, occasionally, your interest rate will also be reduced.

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