People with bad credit scores are often excluded from taking out standard issue credit cards, the primary reason for which being that they are seen as unreliable borrowers. Thanks to so-called credit building cards, however, you can still pay with plastic even with a sketchy rating - all the while getting your score back on track with regular, on-time payments.
When does a credit building card become an option?
If your credit score is unblemished then you're better off opting for a standard credit card - as the interest payments will be lower.
Credit building cards are there to help people with bad credit rebuild their ratings, so are primarily aimed at the following groups:
What are the perks of taking out a credit building card?
Unfortunately, there is no quick fix for improving your credit score after getting yourself into financial trouble - so don't expect taking out a credit building card to change your life overnight.
The idea is that you pay all your bills on time and within the agreed terms over a period of several months (and perhaps even years, depending on your starting point) and eventually get back into lenders' good books.
What do I need to be wary of with a credit building card?
Credit building cards are of course not without their downsides. Here are a few things you need to be wary of:
Which credit building cards should I apply for?
As with any credit card it's always important to shop around before you sign on the dotted line, both to find the best APR and borrowing terms and ensure the totality of the service being offered - customer support, online banking, et al - suits all of your needs.
Make sure you don't apply for loads of credit building cards at once though. Each time you put an application through - whether online, over the phone or in-person - the lender performs a "hard check" on you which damages your credit score. Instead, use a "soft check" tool to assess your eligibility for each card.
Here are some current UK cards worth checking out:
Barclaycard Forward Credit Card
Fluid Credit Card
Vanquis Bank Ltd Classic Credit Card