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 Money
Page > Credit
Cards > Bad Credit Credit Card - UK Guide
 In a
nutshell
A credit card that can be taken out by
people with credit problems
Best
Credit Card For
People with bad credit or other
related credit rating problems.
Credit
Amount
There is no average credit limit you'll be
given for a credit card - it will all depend on your card
company's own limits, your salary and how your credit rating
comes out when it's checked. If you have bad credit then you
are extremely unlikely to be given a high limit and how much
you get will probably be staggered according to the severity
of your actual financial problems. You may find, however, that
if you manage your bad credit card responsibly once you are
given one, you may be able to raise your credit limit over
time.
Advantages
We may all
want to get the credit card with the lowest interest rates in
the sector - unfortunately we won't all get it. If you have
bad credit or related problems, then many standard card
companies won't accept your application. You won't have this
problem with a bad credit credit card. These cards are
specifically designed for people with credit problems. You can
also use a bad credit credit card to help you build up a
better credit rating. If you manage the use and repayment of
your card account responsibly and in a timely manner, then
you'll build up positive marks that can help you get lower
interest rates later and perhaps even tidy up your credit
rating. So, you can sometimes use a bad credit credit card as
a stepping stone to a mainstream card later on.
What to
look out for
If you're in a bad credit situation
then you need to be extremely careful that things don't get
any worse. Credit card APRs are high compared to other lending
products in any case - as a bad credit customer you'll have to
pay higher rates just to get a card from many
providers.
And, if you get even further into debt with
your bad credit credit card, you could just make your poor
financial record even worse. It's tempting to use your card
and then to only pay back the minimum repayments necessary
every month - but interest will keep rolling up and you might
be surprised at how quickly you can find yourself in serious
debt (and how little your repayments will actually go to
paying off what you owe). And, if you get into serious
trouble, you run the risk of having your property or
possessions repossessed so that your card company can get
their money back.
Another downside can occur if you
start missing payments, for example. Do this and you won't
just get fined by your card provider, but it'll show up on
your credit rating as well.
Alternatives
Unfortunately,
with a bad credit record, this kind of card may be your best
and only option.
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