Vanquis Credit Card, How Can It Help?

Credit building cards like Vanquis can be very useful when going through the painstaking process of rebuilding a damaged credit history. The process begins with Vanquis issuing a card with a very low credit limit (usually £200). By using the credit card regularly and making regular payments, a customer's credit profile begins to improve. The extent of the improvement obviously depends on the severity of adverse history on the customer's file.
If there are recent defaults everywhere, but a £5 minimum payment on a vanquis credit card each month, the effect will be negligible. For this reason, the credit card should be just one aspect of the recovery.
To really repair one's credit history, all negative history needs to be dealt with. It is therefore worthwhile to check your credit file with a company like to see what has been recorded against you. It is important to deal with priority debts first, so if there is anything current that you are still being pursued for, those are the things to tackle. Mortgage or rent arrears, council tax or utility debts must take precedence.
It can, of course, be tempting to see a credit card like this as a useful source of extra money, especially in such difficult times, but these cards are only useful if managed properly, and whacking it up to the limit, then struggling to make the minimum monthly payment will only worsen your situation.
Be mindful that the interest rate for vanquis and other similar cards is very high, currently around 34% APR. Obviously, this reflects the risk of lending to customers who have histories of payment problems, so it is vitally important that you manage your vanquis account responsibly.
If, however, you have already dealt with your previous debts, but your credit rating is not quite good enough for a mainstream credit card, this could be for you. Be careful to ensure you can spend on it in a controlled way, and never spend more on it than you could do in cash. The best way to use a credit card of any kind is to pay the balance in full every month. This will minimise any interest and leave the best entry on your credit file.
Of course, if you can do this, there is always the question of why you need a credit card in the first place. It's likely that easy credit got you in this situation in the first place!
So, if controlled VERY carefully, a Vanquis credit card can be useful. In my next post, I will be looking at more of the dangers, and how customers can get dragged back down into the debt trap.