Adverse credit cards

What are adverse credit cards?

Adverse credit cards are aimed at people who have a blemished credit history, and are unsuccessful in standard credit card applications. Adverse credit card clients are perceived as a higher risk than those with a good credit rating; hence APR levels are set especially high on these cards.

What are the benefits of an adverse credit card?

Adverse credit cards have high levels of interest but they can be useful in helping people with bad credit rebuild their credit rating.

By regularly paying off the full balance each month and using the card responsibly, you will show that you can manage your credit cards in a sensible manner. Over time you will rebuild your credit rating and be able to successfully apply for a standard credit card, enjoying the benefit of a lower rate of interest.

What else should I know about adverse credit cards?

• The primary disadvantage of adverse credit cards is the exorbitantly high APR, typically around 30%. If you miss a payment, or only repay the minimum amount each month, then this will result in you paying huge amounts of interest.
• On some cards, the minimum payments are lower than the interest charged; consequently you will not be paying off any of the debt.

For more information, take a look at our article on 10 ways to rebuild your credit score.