Approval for any credit card depends on your status. The representative APRs shown represent the interest rate offered to most successful applicants. Depending on your personal circumstances, the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow. Most of the data in Finder's comparison tables is provided by Moneyfacts.
If you have poor credit, you’re likely to find it harder to borrow money, whether that’s through a mortgage, personal loan or a credit card. The reason for this is that lenders use your credit score to determine how reliable you are as a borrower. If your credit score is poor, it suggests that you’ve had problems repaying debt in the past, meaning that lenders might be reluctant to offer you credit again.
The good news is that there’s a whole market dedicated to credit cards for those with less-than-perfect credit records. This guide explains how they work, what to watch out for and to compare current credit builder cards on the market
A credit builder card is a credit card that’s specifically designed for people whose credit score is low or average, either because they haven’t managed their finances well in the past or because they don’t have much of a credit history
If you’ve never borrowed before, there won’t be much on your credit file, which can make it difficult for lenders to determine your creditworthiness. This means they might be more reluctant to offer you credit or, if they do, you might be offered higher rates.
In this situation, a credit builder credit card will help you to build a credit history from scratch.
Credit builder credit cards typically have a more lenient eligibility criteria, making them easier to get accepted for. But because of this, they often have lower credit limits and higher interest rates so that providers reduce their risk. Like all credit cards, they need to be used with care.
Some card issuers like Vanquis and Aqua specialise in credit builder cards, and offer a whole range of cards for this market, while the big household names like Barclaycard or Tesco Bank are more likely to have just the one credit builder card in their range.
There are a number of other steps you can take to improve your credit score. For example:
You can read our full guide on how to improve your credit score.
Credit builder cards work in a similar way to standard credit cards, but with some key differences:
Although credit builder cards can be easier to get accepted for if you have bad credit, all card providers have their own eligibility criteria and you might find that while one lender rejects you, another accepts your application. To help you with your search, it’s crucial to check whether there are any minimum income requirements or any other criteria you need to meet.
The good news is that almost all card issuers now let you check your likelihood of approval before you submit an application – saving you time and protecting your credit score from further harm (full applications involve a “hard” credit search and have a slight negative effect on your score).
You should always compare all your options before applying for a credit card. To make sure you’re choosing the right credit builder credit card for you, it’s worth considering the following:
Credit builder credit cards can be a good idea if your aim is to improve your credit score or you’ve struggled to get credit in the past.
You might want to use a credit builder card if:
If you apply for a credit builder credit card and use it sensibly, it could be a handy way of helping you to improve your credit score over time. You’ll need to meet all your monthly repayments on time and stay within your credit limit. After 6 to 12 months you could see improvement in your credit score.
If you want to take out a credit builder card, it’s important to keep the following points in mind:
Boasting fee-free spending overseas and few fees, the Zable Credit Card (formerly known as the Level Credit Card) is refreshingly simple if you’re willing to set up a CPA.
thimbl. offers a straightforward credit builder card for those with good and bad credit.
Secured credit cards can help rebuild a positive credit history. While they are extremely rare in the UK, good alternatives do exist.
Enjoy one rate on all your transactions with this credit builder issued by Capital One.
thinkmoney’s card for bad credit, issued by Capital One, has one interest rate for all transactions.
Newday’s card for “near prime” credit lets you transfer existing card debt to enjoy an introductory 0% rate.
Having bad credit can limit your financial options. Learn how to increase your chances of getting approved for a balance transfer credit card.
You can get a credit card if you’re under 21. Find out what your options are.
Learn how the Marbles’ credit-builder card compares with other popular cards for rates, credit limits, eligibility criteria and more.
If you’re looking for a credit card but have a bad credit rating, use this guide to compare alternatives to credit cards and regain control over your finances.