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Less Than a Perfect Credit Rating? Which Credit Card?

You can guarantee that if there is a market for a financial product then the financial providers will rapidly step in to satisfy that market. The financial crash made obtaining credit much more difficult and that was especially true if you had a poor credit history. It is surely a sign of recovery that these same financial institutions are now competing to attract those with a poor credit score.

So what can you expect to find if you are one of the many looking for credit but have been passed over for the best credit cards because of your supposed credit risk? Well, the answer is that there is now an interesting array of products and, depending on what you are looking for; a few of the best are outlined below.

First – a couple of warnings. Providers are only obliged, by law, to extend the advertised APR to 51% of applicants. This means that nearly half of all applicants may be accepted but at a higher APR or, possibly, a lower credit limit. Secondly, credit cards are designed to tempt you to spend more than you can afford – they only work in your favour if you pay off your balance in full every month.

One of the reasons for applying for a credit card is to restore and/or improve your credit score and so the cards we are discussing are often referred to as credit builder cards.

One card that has received a lot of advertising recently, mainly targeted at those with a poor credit score, is the Luma card from Capital One. It offers an attractive cashback of 4% on fuel and grocery shopping which is a rate that is normally reserved for those with an excellent credit score. The credit limit is £1500 and the APR is 35.9%, both of which are fairly typical for those with a poor credit score. However, the Luma credit card has capped cashback earnings at £108 each year. So far, the Luma card is one of the only credit builder cards offering an extra perk and is definitely worth considering.

The Barclaycard Platinum Transfer Card is also targeted at those with a less than perfect credit history and offers an 18 month 0% APR on balance transfers and on the first 3 months of purchases. The APR after the initial 3 month period is an attractive 24.9%.

If you want cashback on all purchases, rather than just fuel and groceries, then the Capital One Classic Extra Card pays 0.5% plus an annual £10 if all repayments are made on time although the APR is a fairly high 34.9%.

The Aqua Classic offers a competitive 29.7% APR and allows unlimited access to your credit report with their own Aqua Credit Checker. This could be quite useful if you want to have an idea of your credit score in anticipation of buying a home or obtaining other substantial financial credit.

The Aquis Visa Card has a low initial credit limit of £1,000 but this can increase every 4 months up to £3,000. The 29.8% APR is low although they have a history of very high rates to some of its applicants.

For a brief summary of the good and bad of all credit cards, including a section for those with poor credit history, it is worth visiting