Bad debt credit card

If you've had bad debt in the past then getting hold of a credit card can be a tricky proposition.

It's worth remembering that a credit card is just like an unsecured personal loan. Therefore the lender has to have some faith that you will actually be able to pay the money off that you borrow. So if you've had bad debt in the past, you're never going to be an ideal candidate.

It's likely that you'll be rejected by banks and other mainstream providers if you have a history of bad debt. Credit cards have however become more widely available regardless of whatever previous financial problems you might have had.

There are credit card companies that specialise in helping consumers who have bad debt in their past. They offer credit cards that come with specific requirements and restrictions to help ensure you don't struggle with bad debt again.

Some providers will just simply give you a very low borrowing limit to ensure you don't borrow beyond what you can afford to pay back. Others will require you to deposit money, so that you begin in credit before spending. This is an act of good faith on your part, which shows the provider that you have the money to pay them, and aren't just intent on wracking up debt.

Another way of getting hold of a credit card with a bad debt history is to secure it against an asset. This means that if you default on payments then the provider isn't left to take you to court or foot the bill themselves. However, although this can help you get a credit card you have to remember that whatever you secure it against, stands to be repossessed if you don't keep up with repayments. So if you can't afford to lose this asset, don't bother securing finance against it in the first place.

When you're looking around for a bad debt credit card, it's likely that you're going to be charged a higher rate of interest, and greater penalty fees if you're late on repayments. However, this doesn't mean that you can't shop around for a good deal. It's very easy to jump at the first credit card offered you, but if one company is prepared to give you plastic, then there will almost certainly be others and they might have better rates.

Like any product, getting a good deal on a bad debt credit card will be easier if you do your research and look around for the best offers. We have provided details of where you can get a credit card if you are or have been in bad debt.