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The "guaranteed credit card" – and why it doesn't exist
Rebuilding a credit history always takes time and effort - and as with anything that claims to be the quick and easy answer to all your problems, it's always a good idea to check the finer details closely.
You may have seen offers or advertisements promising "guaranteed acceptance" on a credit card. The details vary from case to case, but they usually say that you're guaranteed to be accepted for the provider's MasterCard, VISA or AMEX card without first running an eligibility check i.e. No matter your credit history, income, employment status, or anything else which a lender would usually check. They might also say that their customers don't go through a credit check at all.
For some people, this sounds too good to be true – and of course it is. No matter who the lender is, anybody who applies for a credit card goes through some kind of credit check. Aside from the regulatory requirement to check creditworthiness before lending, a lender who gave away credit to absolutely anyone who applied (including fraudsters, for example) wouldn't stay in business for long.
If you read the small print on these kinds of deals, you'll usually find that they're either for prepaid cards, or they require customers to make a security deposit up-front to be accepted.
This, however, does not apply to eligibility checkers, which can tell you with a great amount of certainty, how likely you are to be accepted – it is sensible to use these eligibility checkers where possible to avoid negative marks on your credit file.
Prepaid cards aren't really credit cards at all – although they're a plastic card with the Mastercard or VISA logo on them, you have to load them up with your own money before you can use them. They don't report to credit agencies because no credit lending is taking place.
Some prepaid cards do come with loan advance schemes, which let them function in a similar way to credit cards. Used this way, they can be a way to help you rebuild your credit rating. However, if you want to use this facility you will have to go through a credit check first, and if your credit history is poor, you may be rejected. Some prepaid cards also come with additional costs, such as withdrawal charges or monthly fees.
Security deposit cards
Also known as 'secured cards', security deposit cards don't require a credit check because the risk is offset by your deposit, which is often as much as the credit limit it’ll allow. For instance, if you want a credit limit of £2,000, you might need to put down a deposit of £2,000 first.
Many secured cards may come with fees attached, and the rate of interest is usually high as well.
Can "guaranteed" cards help my credit score?
If you're looking for a guaranteed credit card, you're most likely not to be in the best financial situation – and these sorts of deals aren't likely to help. You might have been turned down by several lenders already, or you know your bad credit history will stop you from getting access to credit.
If this sounds familiar to you, Vanquis provides credit cards that might be a better way forward. We don't guarantee acceptance (and we wouldn't want to) unless you grant us permission to carry out a ‘Soft Credit Search’ on your file by completing a short form using Express Check. We will always consider applications from people who've experienced financial difficulty – even if they've been declared insolvent in the past.
Our "bad credit" and "credit builder" credit cards are specifically designed to help people with bad credit rebuild their scores by borrowing and repaying small amounts at a time, at a rate of interest they can afford. Over time, this demonstrates to lenders that they can manage credit responsibly, until they are able to access more competitive forms of credit again.
Think one of our cards could help you? Find out more here.