Can I get a credit card if I'm bankrupt or still repaying debt?

poor credit card application

For those with a severe debt problem in their past trying to get a credit card can be difficult.

For those currently declared bankrupt or repaying bad debt it can be downright impossible.

We'll start off by looking at those with current severe debt problems. Those who have been, but are no longer, in serious debt can skip ahead if they wish.

Current debt problems: the options

By severe debt, we mean a recent bankruptcy, or a high level of debt being paid off informally with the lender or formally through an Individual Voluntary Arrangement (IVA) or similar.

Why get a credit card?

Frankly, the first question for people who still have debt is: why get a credit card?

Needing to borrow more could be a signal that a current method of debt repayment isn't working. Good debt advice (find some here) is likely to be much more useful than a new source of borrowing to worry about.

Debt repayment
Our guide to the different solutions

In any case, the credit cards available to people with poor credit tend to have very small credit limits, often around £100 to £200, and high interest rates, which might make borrowing elsewhere far more attractive.

The other big reason people who have debt problems look for credit is because they want to start rebuilding their damaged credit history.

But concentrating on repaying current debt is likely to be much more useful than attempting to rebuild a "good" credit history.

The time for rebuilding is after debts are repaid or well under control. See the next section for more details.

Finally, those who do decide to go forward with a credit card application should note that the information below refers to lenders who will consider applications from those with current debt problems.

Applications may well still be rejected - and rejection will, of course, have a short term negative effect on an already bruised credit rating.


There are no credit cards available to non-discharged bankrupts.

However, some lenders do make their sub-prime products available to those who were made bankrupt in the fairly recent past.

Capital One and Barclaycard both offer "rebuilding" cards, on the proviso that applicants haven't been declared bankrupt in the last 12 months.

The Aqua credit card range is also open to those who registered as bankrupt more than 18 months ago.

Vanquis Bank state that people can apply as long as they are not legally restricted from obtaining credit, so applicants may be considered as long as the bankruptcy is discharged.

Another option for recently discharged bankrupts are cards that can be prepaid. We've a full guide to these cards here.

Unlike credit cards, prepaid cards aren't subject to credit checks although some do require proof of ID - especially those that offer credit rebuilding services. The CashPlus prepaid card, which we review fully here, is the most well known credit building prepaid card.

In debt now

For people who are still repaying past debts, eligibility for a credit card will depend on a number of factors.

The current level of debt, along with the amount being paid towards it, will be taken into account when assessing eligibility.

Even some providers who issue cards designed to help holders repay debts specify that applicants can't be in too much debt.

For example, among the nine different types of credit card offered by Barclaycard are a couple of long term balance transfer cards where the application criteria include the specification that, excluding mortgages, applicants' debts must be less than 10% of their income.

That might seem somewhat extreme, but it's fairly typical in the sense that lenders tend to look at the level of an applicant's unsecured debts - such as that on store and other credit cards - rather than secured debts such as mortgages.

As we said above, a good rule of thumb is to pay off as much debt as possible before applying for anything new.

Past debt problems: the options

Once debt problems are in the slightly more distant past, applying for a credit card becomes somewhat easier and more likely to be beneficial.

Why get a credit card?

Being able to show a record of completely repaying debts without missing payments can actually positively affect the way an applicant is viewed by potential lenders.

In other words, having a carefully selected and carefully used credit card can help to rebuild a credit report: it shows an ability to manage borrowing and pay back a debt, as well as being handy day to day.

Have a look at our comparison table for examples of "credit builder" cards, including brief details of the types of applicants they will consider.

However, many credit cards - and borrowing in general - won't be suitable for those with past debt problems.

Firstly, those who have recently been in debt may well have the same issues as those still in debt: opening a fresh line of credit could prompt them to fall back into a debt spiral. No one wants that.

Secondly, as card providers must consider the credit history of an applicant before making a decision, there is a high chance that those with recent debt issues may find themselves rejected - even for a card marketed for credit rebuilding.

For this reason it's vital to drill down into every card's eligibility criteria before applying - and doing as much as possible to get finances on an even keel beforehand.

The options

Among the providers who offer credit cards to those with poor credit histories are Vanquis, Aqua and Marbles, and Argos - we cover these cards in more depth here.

However, depending on how much debt someone has had, and how old it is, others - including cards from Barclaycard and Capital One - may also be available.

For example, missed payments - on credit cards, or on secured or unsecured personal loans - do have an impact on a credit history. Each missed payment will stay on a credit report for three years, and can therefore be seen by lenders.

After that, though, they are expunged.

It's very rare that they will be a serious barrier to someone trying to gain credit - although the more missed payments on the record at any one time, the greater the impact they could have on getting an application accepted.

More serious action taken to resolve problem debt - such as County Court Judgements (CCJs, explored further here), Individual Voluntary Arrangements (IVAs) or insolvency will stay on file much longer - usually for six years from the date of issue.

Because of the seriousness of the measures involved, and the sums owed, anyone with one of these on their credit file can expect to be excluded from the top deals altogether.

As mentioned above, it may be worth considering products such as the CashPlus credit builder facility. Alongside the credit card element of the product, it offers a manageable way to take out and repay a loan, in the form of the card's annual fee.

This can help improve a damaged rating, which may help the holder gain access to further credit in the future.

Debt advice

This article can only offer general information, and it can't take into account the variable nature of personal situations.

Anyone who needs specific debt advice should make their first port of call a free debt advice agency, such as Citizen's Advice, StepChange or National Debtline. These organisations will offer a personal response and more in-depth information.


14 August 2014

I am a discharged bankrupt. I was made bankrupt by one of the large banks for outstanding invoice financing from a company that I owned. At the time of my bankruptcy I had two credit cards (Aqua & Luma) both with small limits but I always paid on time and the full amount because I wanted to re-build my credit rating. The problem I have now that I am discharged is that many of these cards will not offer to you again if you held one of their cards at the time of going bankrupt.
I have tried Vanquis but I even get turned down by them. Is there anyway that I can get a credit card to help me rebuild my rating?

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