Credit Card 101: how to find the best credit cards for bad credit

This month, we thought we’d look at how to find the best credit cards for bad credit.

You'll probably come across quite a few articles online that mention the top 5 best credit cards for bad credit. However, lots of these articles can be quite outdated and with the market trends changing so quickly, you never know if you are still looking at the top 5 credit cards or has something new emerged in the market that you might be missing out on.

So instead, we decided to write about the best credit cards for bad credit in a way that highlights a quick and easy process for you to follow and find out yourself. Plus your situation might be different to another person's and what suits you might not suit another. On top of that, no matter how outdated this article gets, whenever you read it you'll have all the information you need to find the right credit card and to start repairing your credit score. 

Finding the best credit cards for bad credit: a step-by-step guide

Step One: Get to know your credit score

Before you start looking for the best credit cards for bad credit, it’s a smart move to make sure that you’ve got a bad credit score and whether there’s anything you can do to bump your credit score up and get access to credit cards with better rates.

We’ve written an article before on how to check your credit score for free, so make sure to check that out here, but if you’re in a hurry, we recommend signing up for the free Experian service.

Not only does it keep track of your credit score and give you insights from the most trusted credit agency in the UK, but it also gives you access to another great feature: their eligibility scores.

What are eligibility scores?

Just like our soft search feature that lets us give you a preliminary decision on a loan without leaving a mark on your credit report, Experian have a service that calculates how likely it is that you will get the a loan, credit card or any other line of credit based on your credit history and the other information you provide.

Which makes it the perfect tool for looking for the best credit cards for bad credit...

Stage Two: Use Experian’s free tools to your full advantage

As we’ve already mentioned, Experian’s eligibility tool is an incredibly useful tool when it comes to applying for a credit card, but what happens before that?

Well, unsurprisingly, Experian have another awesome tool that helps you find the best credit card for bad credit.

Once you’ve logged in, choose the credit card option and navigate to the “Improve Credit” option. These credit cards help people in your situation improve your credit score.

Once you’ve done that, all you’ve got to do is enter some information about yourself -- residential status, income, employment status, income and address -- and they’ll pull a list of the best credit cards for bad credit that are suitable for your situation.

You’ll also see their eligibility calculation, which shows how likely it is that you’ll get the credit card. Of course, the higher the number, the more likely you are to get the credit card.

80% and 90% ratings are fantastic, of course, but the green tick is the thing you’re looking for. If you've got the green tick, you are pre-approved!

Even better, if you see a green tick next to a credit card or loan, it means that you can apply for that line of credit with no worries about being rejected.

Step Three: Choosing the best credit card for bad credit

Now, while the green tick is oh-so-tempting, it pays to take a minute to look through your options. The best credit card for bad credit might not necessarily be the one you’re pre-approved for.  It pays to do a little digging and research.

So, how do you choose the best credit card for bad credit?

You need to look at:

Annual Percentage Rate (APR):

The APR is the annual cost if you don’t pay the whole balance of the credit card off each month. Comparing the APR for different cards is a quick way to spot the cheapest card for you, however, remember to compare fees, charges and other costs associated with each card.

Minimum repayment:

If you’re planning on only paying parts of the credit card off each month -- rather than in full -- then it’s important to check the minimum repayment. Typically, the minimum repayment is a small percentage of the balance owed -- but it varies from card to card.

Charges:

It's important that you check the charges for two reasons:

• so you don't get an unexpected fee
• so you can make an informed decision if you think you might go over your credit limit or use your card overseas.

For more important credit card terms, check out our glossary.

Now you know how to find the best credit cards for bad credit and you’ve made your choice, there’s only one thing left to do: apply.

Even if you’ve got the green tick for lots of credit cards, make sure you only apply for one credit card at a time. Not only do you not want to open lots of credit cards, but an influx of applications can be a signal that you’re in financial hot water and get your application rejected.

Take it slowly and apply for the best card for you. If you aren't successful, wait a few weeks to apply for the next best option (if you can) to protect your credit score.