Credit cards like Capital One
Capital One offers a range of "credit builder" cards catering to those with limited or damaged credit histories. It's not the only provider doing this.
A less than perfect credit history can make it harder to secure finance, including loans and credit cards. However, specialist card issuers like Capital One aim to provide a way around this, with tailored financial products that can help build or rebuild a positive credit history.
As you might expect, these cards tend to come with lower credit limits and higher APRs, but there’s good news too:
Like most cards on the UK market, if you pay your balance off in full each month, you usually won’t incur any interest at all, so a high APR might not mean anything to you in practice. Watch out for exceptions to this rule, such as non-sterling transactions or cash advances (withdrawing cash on the card).
The acceptance criteria for these cards tend to be more lenient and it’s normally possible to find out before you apply (and without hurting your credit score) whether or not you’re likely to be approved, thanks to the prevalence of “soft search” facilities.
Annual or monthly account fees are very rare in this space and finally, credit limits are often subject to review more frequently and within a short time of holding the card.
Comparison of alternatives to a Capital One card
Key considerations for credit cards like Capital One
Credit builders can be a useful tool, if they’re used correctly. Aim not to carry a balance from month to month: if you do, you’ll stand to pay a hefty amount in interest. It can be tempting to make only the minimum required payment each month (and your card issuer might love this), but that will cost you much, much more in the long run.
Due to the higher rates that apply to cards such as these, it’s often smart to think of them as a “stepping stone” product to finance agreements with better terms. In other words, if you take out a credit builder, use it sensibly and then, when you’re able, switch to a card (or other financial product) with lower rates.
If you miss a repayment, you’ll most likely incur a penalty fee, pay additional interest and damage your credit record further. Pretty much every card issuer now lets you set up a direct debit for repayments and lets you choose to set this up for either the minimum required sum, a fixed amount or the full balance. It’s a smart idea to do this as you’ll safeguard your credit record.
More guides on Finder
Official figures say credit card usage is down, but are some having to use their cards more?
New research indicates that not everyone may have been using their card less throughout lockdown. The study found that over 2 in 5 credit card holders (43%) used, and are continuing to use, their credit cards more than they did before lockdown started in March.
Best 0% purchase credit cards
0% purchase credit cards can help cover the cost of large purchases or expenses, and are often cheaper than a personal loan. Here’s where you can get the best 0% purchase credit cards, and how you can get the best use out of your card.
Best credit cards for building credit
All credit cards benefit your credit history when you use them correctly, but these picks aim to support you on your journey to better credit.
Best first credit cards
If you’re looking to take out your first credit card, it can be hard to know what to look for. Here’s what you need to do to find the first credit card that’s best for you.
Sainsbury’s Bank Nectar Reward Credit Card review 2020
With a generous rewards points scheme and 0% balance transfer period, the Sainsbury’s Bank Nectar credit card is a well-rounded and low-cost reward card.
The Best American Express credit cards of November 2020
Looking for the best American Express Credit credit card? Here’s our guide to Amex’s best in class cards for cashback, rewards and more.
The best cashback credit cards of 2020
Cashback credit cards let you earn money back on every purchase you make, but which one has the best cashback offer, as well as the best rate?
The best balance transfer credit cards of 2020
Here’s how you can get the best deal on a balance transfer credit card, from finding the longest 0% periods to getting the lowest fees.
Amazon Business Prime American Express Card review 2020
Amazon’s premium business card, the Amazon Business Prime credit card lets you get the most out of your Amazon business purchases.
Amazon Business American Express Card review 2020
Amazon has joined the business credit card game with two reward-focused cards.
Ask an Expert