Rebuilding a credit history and improve your credit rating with credit cards

MANY people who have had severe financial problems may have sworn that they will never use a credit card again. But not having a credit card can be as disadvantageous as having one and not paying off the interest each month. Equally continually apply for a credit card and getting turned down can also impact on your credit rating. There are a few cards on the market designed to get people back on track. The APR rates are horrifically high nudging the 40% but if you are re-building your credit status that is not necessarily the point. If you can demonstrate that you can operate a card prudently over a few months then the door to a better deal may well open. These cards specifically are aimed at people who have had credit problems or who have no credit history. It goes without saying that the point is to use them as lightly as possible and make the repayments on time each month. Tip: Make the full payment by Direct Debit and NEVER EVER use them as a loan then the interest rates will hurt.

• The Aqua Mastercard offers up to £2,200 at an APR of 35.9%
• Barclaycard Initial offers £250 to £2,000 at 27.9% but stipulates no CCJ's and not for students
• Capital One Classic offers up to £2,500 at an APR of 34.9%
• Vanquis Visa card offers from £250 to £1,000 at 39.9% APR

It may take a year or more of careful husbandry but if the financial climate improves the chances are that then you could transfer the balance to a more mainstream card with APR at current levels of around 17%.