Best credit cards for building credit

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Bad credit

Aqua Classic Credit Card

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Limited credit history

Tesco Bank Foundation Card

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Balance transfers

Aqua Classic Balance Transfer Card

What is the best credit builder credit card?

Credit builder credit cards cater to those with very limited or damaged credit records. They’re easier to get approved for, but they tend to have higher interest rates. Card issuers like Vanquis and Aqua specialise in credit cards for those looking to build credit, which means you may still be eligible for a card from their ranges even if you have bad credit. Meanwhile, big names like Barclaycard typically have one dedicated credit builder in its range.

But how do you know which credit builder is best for you? Well, in reality, the first thing to do is identify which of the cards you’re likely to get approved for. After all, there’s not much point in closely scrutinising the T&Cs of cards that are out of reach.

Each card has basic eligibility requirements that you’ll need to meet in order to apply, but the reality is that each application for a credit card is considered on its own merit. Card issuers will look at factors like your credit history, your income and your expenses to reach a decision. The good news is you can use an eligibility checker to get an idea of which cards you stand a strong chance of getting approved for.

Best card to build credit

Used correctly (not missing any payments and not going over limits), any credit card will have a positive impact on your credit score. However, dedicated credit builders can support you in your journey with features like customisable alerts, credit score monitoring and credit limits with regular, guaranteed reviews.

Ultimately, building credit is a relatively slow process, and credit reference agencies want evidence that you can consistently manage your debts and credit on a long-term basis.

Aqua Classic Credit Card

★★★★★

Check eligibility Read review

29.7%

Representative APR

£0

Account fee

Up to 48 days

Interest-free each billing period

£250

Minimum credit limit

• Overview
• Pros/cons
• Details

Aqua's dedicated credit builder is the easiest card in its range to get approved for. Like other credit builders, it has a relatively high interest rate, but clear your balance in full each month (you can set up a direct debit to do this) and you can avoid interest altogether.

• Although the rate is good by credit builder standards, it's not a card you'd want to carry a balance on for months and months

Availability	Available to new customers
Residency	UK resident
Foreign usage charge (EU)	2.95%
Cash advance fee	5% (min. £4)

Representative example: Assumed credit limit £1,200, representative 29.7% APR (variable), purchase rate 29.75% p.a. (variable). Please note: you can’t have two Aqua accounts or open an Aqua account within 12 months of opening a Marbles, Fluid or Opus account, issued by New Day

Best credit builder for low fees

Credit builders tend not to come with annual or monthly account fees, but there are penalties for misuse, and if you don’t pay off your balance in full each month, the interest you pay can be costly. If you do pay off your balance in full each month, you could potentially avoid the card costing you anything at all (just bear in mind that withdrawing cash or using a card abroad can involve fees).

118 118 Money Guaranteed Rate Card

★★★★★

Read review

0%

Balance transfer fee

34%

Representative APR

0%

Foreign transaction charge

£0

Account fee

• Overview
• Pros/cons
• Details

Credit card rates and fees can get pretty complex, but the 118 118 card is all about simplicity. Fees have been done away with, but the interest rate remains high. Clear your balance in full each month and this doesn't have to be an issue as you'll avoid interest altogether.

• Rates and limits are guaranteed (provided you get approved for the card)
• No fees to worry about
• Credit limit reviews every six months

• A relatively high interest rate
• Although there are no fees, if you miss a payment, remember that (as with any credit card) this will still damage your credit record and cost you in the long run

Availability	Available to new customers
Min. income	8400
Foreign usage charge (EU)	0%
Cash advance fee	0%

Representative example: When you spend £1,200 at a purchase rate of 34% (variable) p.a., your representative rate is 34% APR (variable).

Best credit builder for perks

Credit builders tend not to offer a lot in the way of rewards and perks, but there are a few exceptions. Just be careful not to rack up debt chasing points – if you carry a balance from month-to-month, what you’ll pay in interest is likely to massively outweigh the value of any rewards you earn.

Tesco Bank Foundation Card

★★★★★

Read review

27.5%

Representative APR

£0

Account fee

Up to 56 days

Interest-free each billing period

£100

Minimum credit limit

• Overview
• Pros/cons
• Details

Who says you can't earn rewards while improving your credit record? This card lets you collect Clubcard points on virtually all your day-to-day spending (not just at Tesco).

• One of the only credit builders on the market to offer a rewards scheme
• Offers access to your credit report and score
• Handy text and email alerts

• Could tempt users into spending just to chase points
• CCJs are a no-no for Tesco Bank

Availability	Available to new customers
Residency	UK residents
Min. income	5000
Foreign usage charge (EU)	2.75%
Cash advance fee	3.99% (min. £3)

Representative example: When you spend £1,200 at a purchase rate of 27.542% (variable) p.a., your representative rate is 27.5% APR (variable).

Should I get more credit cards to build my credit fast?

No – having multiple credit cards will not necessarily help you build your credit score more quickly and can even make it harder to get approved for credit in the future.

If you apply for multiple credit cards in a short period of time, this can actually damage your credit rating, as each application for credit involves a small (usually short-lived) negative impact on your score. It could also suggest to would-be lenders that you’re having issues managing your expenses and debts.

Ultimately, the best way to build your credit score is to use your card responsibly, keep your existing credit card balance low and make sure you always pay your credit card bill on time.

How to choose the best credit-builder credit card

1. Understand what you want out of the card. Are you simply looking to build your credit history, or do you want the ability to earn rewards, transfer a balance or get 0% interest on purchases?
2. Do your research.While there are many dedicated credit-builder cards, you can still build your credit using a regular credit card, so it’s also worth considering other cards.
3. Compare cards. Look out for cards offering the features you want, and make sure to compare any rates and fees.
4. Check your eligibility. Before you apply for a card, you want to make sure you’re likely to be approved. An eligibility checker lets you confirm your chances without having to go through the full application process.
5. Apply for the card. Make sure you complete the application correctly and in full.

Bottom line

The benefit of credit builder credit cards is that they can help anyone build or improve their credit score, but this will only happen if you pay off your balance on time and in full each month. Credit builder credit cards generally also have higher interest rates than regular cards, which makes it doubly important that you completely pay off your balance each month so that you avoid expensive interest charges.

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• Save from £20 to £200 a month
• Build and improve your credit history
• Once you’ve finished unlock your savings

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