Home → Finance →

Best Credit Cards for Bad Credit and Unemployed People

Written by, Marija Petkova

Updated August, 1, 2022

If you’re in between jobs or have a bad credit score, you might think that you’re chances of qualifying for a credit card are slim. But, that’s not necessarily the case. 

There are several lenders in the UK who offer credit cards for bad credit and unemployed people, however, they often come at a bigger cost. 

To help you make the right choice, we’ve rounded the best places where you can find a credit builder card.

Let’s dive in.

Tesco Foundation Card

  • Credit limit: £250 – £1500
  • 27.5% APR representative
  • Monthly repayments from £25
  • Clubcard points 
  • Purchase interest-free period (up to 2 months)

Vanquis Chrome Credit Card

  • Credit limit: £250 – £1200
  • 29.5% APR representative
  • SMS account management
  • 24//7 fraud watch
  • Option to build your credit up to £4.000

Barclaycard Forward Credit Card

  • Credit limit: £50-£1200
  • 33.9% APR representative
  • 0% interest on purchases for 3 months
  • 3% interest rate reduction (for timely payments)
  • Text and email alerts

Lending Expert

  • Credit limit: Varies
  • Large market comparison
  • Results in just a few minutes
  • FCA-regulated credit broker

Aqua Classic card

  • Credit limit: £250 – £1200
  • 39.9% APR representative
  • No annual fees
  • Boosted Payments’ option
  • Access to Aqua coach

OceanFinance Credit Card

  • Credit limits: Up to £1500
  • 39.9% APR representative
  • Option to add up to 3 other cardholders
  • No hard checks
  • Credit limit increase option

Buyer’s Guide

Can I Get a Credit Card If I’m Unemployed and Have Bad Credit?

You may not be able to get the best credit card deals while you’re unemployed or have bad credit, but you could still get a credit card from lenders that offer credit cards to people with a low credit score.

What Type of Credit Card Can Help You Build Your Credit Score?

One of the best ways to boost your credit score is to get a credit builder card

These cards are designed for people who have a little-to-no credit history or an adverse credit history, and want to improve their scores. 

There are two types of credit builder cards: a regular credit builder card and a credit builder prepaid card.

Credit builder card

With a credit builder card, you will get a low credit limit, which you can use to make small purchases. 

For example, Tesco’s Foundation Credit Card for unemployed in the UK has starting credit limits of up to £1500.  

This card can help you demonstrate responsible borrowing if you pay off the balance at the end of every month, which will improve your credit score over time.

Credit builder prepaid card

Credit builder prepaid cards don’t require any credit checks, which means you could get one even with a bad credit score.

These cards work like a regular debit card but come with an option to add a credit builder service. If you opt for this service, the provider will lend you a year’s worth of monthly fees (between £5 and £10 a month). 

Repaying what you owe on time will boost your credit score.

You may be interested in: What is a cash card?

Pros and Cons of Getting a Credit Card While Unemployed

The main advantages of getting a credit card during a period of unemployment are:

  • It gives you a chance to improve your credit score.
  • It can be a great budgeting tool.
  • It is useful for emergency funding.
  • It provides financial protection on purchases.

The drawbacks of credit cards for unemployed individuals are:

  • They have a high-interest rate.
  • They have low credit limits.
  • They can further damage your credit score if you miss payments. 
  • They can apply additional charges if you fall behind on your repayments.

Can I Get a Credit Card If I Am On Benefits?

Being on benefits doesn’t necessarily mean that you can’t get a credit card, but you probably won’t get the best APR or credit limit.

Does Being Unemployed Affect My Credit Score?

A good credit score reflects how well you manage your debt and certain finances.

Your employment won’t affect your credit score directly, but losing your income can impact your ability to make repayments. If you fall behind on your repayments, your credit score will drop, which will make it more difficult to get finance in the future.

What Are The Requirements For Getting Credit Cards For The Unemployed?

When deciding whether to accept an applicant, most lenders look at:

  • Age and residence: All UK providers require applicants to be at least 18 years old, and the majority of them only offer credit cards to UK residents. 
  • Income: Some credit cards are only available to people who earn over a certain amount but there are others who have looser requirements. For example, the Aqua Classic credit card is designed for people that are on zero hour contracts (among other things).
  • Financial History: Traditional card providers are unlikely to accept your application if you have negative items on your credit file. While some of these can stay on your credit report for 6 years, lenders such as Barclaycard would still give you an offer even if you have a CJJ or bankruptcy on record.
  • Credit score: Whether it’s a loan, mortgage, or credit card, the first thing that lenders look at when considering your application is your credit score. Although lenders that offer credit cards to people with bad credit scores won’t reject your application solely based on that number, they will give you a higher interest rate if your credit score is low.

Things To Consider Before Applying

Here are the things you should consider before applying for an  unemployment credit card:

  • Work out your budget: If you’re unemployed, getting a credit card could be a good way to build up your credit score, but a lack of a steady income can lead to financial difficulties. That’s why it is important to work out a monthly budget and make sure you can afford the card. 
  • Credit card’s purpose: Credit cards can be useful in cases when you need quick access to a small amount of money, but there are better options if you don’t have an income and are strapped for cash. In that case, you might consider applying for loans available to people on benefits.
  • Features and rewards: Different lenders offer different features and rewards. For example, Barclays provides fraud protection for their card users, while Aqua has a free app where you can track your finances.

Alternatives To Credit Cards For Bad Credit And Unemployed

While credit builder cards can encourage responsible borrowing and help you improve your credit score, they’re not the ideal option for every situation. You should also consider:

  • Unsecured personal loans
  • Guarantor loans
  • Secured loans

Looking for a way to get cash by leveraging your home equity? See our guide on how you can borrow money against your home.

Bottom Line 

If you’re unemployed or have a poor credit score and looking to borrow a smaller amount of money then a credit card could be the best option for your situation. What’s more, credit cards can offer you a way to rebuild your credibility as a borrower and help you improve your financial management. 

My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.