Compare credit builder cards

Having bad or limited credit doesn't mean credit cards are off the table. Find out how credit builder cards work and how to choose the right one.

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Name Product Finder Score Annual/monthly fees Initial credit limits Minimum income Representative APR Incentive Link
Barclaycard Forward Credit Card
3.8
★★★★★
£0
Min. limit £50, max. limit £1,200.
£3000
33.9%
Rate discounts: 3% interest rate reduction if you make all your repayments on time for the first year, and a further drop of up to 2% more if you continue to do so in the second year.
Representative example: When you spend £1,200 at a purchase rate of 33.9% (variable) p.a., your representative rate is 33.9% APR (variable).
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Zable credit card
3.4
★★★★★
£0
Min. limit £200, max. limit £1,500.
£9,600
48.9%
Representative example: Representative 48.9% APR (variable). Based on assumed borrowing of £1200. Rate of interest 48.9% (variable) annual.
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118 118 Money Guaranteed Rate Card
3.6
★★★★★
£0
Min. limit £500, max. limit not specified.
£8400
49%
Representative example: When you spend £1,200 at a purchase rate of 49% (variable) p.a., your representative rate is 49% APR (variable).
Check eligibility
Additional account needed
AIB Student Credit Card
4.0
★★★★★
£0
Min. limit £300, max. limit not specified.
Not specified
12.9%
Representative example: When you spend £1,200 at a purchase rate of 12.2% (variable) p.a., your representative rate is 12.9% APR (variable).
Additional account needed
HSBC Student Credit Card Visa
3.5
★★★★★
£0
Min. limit £250, max. limit £500.
Not specified
18.9%
Available alongside an HSBC Student Account (receive £100 and a 1-year subscription to Headspace when you open a new student account).
Representative example: When you spend £500 at a purchase rate of 18.9% (variable) p.a., your representative rate is 18.9% APR (variable).
Additional account needed
TSB Student Credit Card
3.5
★★★★★
£0
Min. limit £500, max. limit £1,000.
Not specified
21.9%
Representative example: When you spend £1,000 at a purchase rate of 21.95% (variable) p.a., your representative rate is 21.9% APR (variable).
Sainsbury's Bank Everyday Credit Card Mastercard
4.0
★★★★★
£0
Min. limit not specified, max. limit not specified.
Not specified
29.4%
3 Nectar points per £2 spent in Sainsbury's, Argos, Habitat and Tu clothing, and 1 Nectar point for every £5 spent elsewhere. 1 point = 0.5p (min 500pts)
Representative example: When you spend £1,200 at a purchase rate of 29.4% (variable) p.a., your representative rate is 29.4% APR (variable).
Tymit Credit Card
4.0
★★★★★
£0
Min. limit £500, max. limit £15,000.
Not specified
29.9%
Representative Example: 29.9% (variable) based on a borrowing of £1200 over 12 months with no annual fee.
Bip Credit Card Mastercard
4.0
★★★★★
£0
Min. limit £250, max. limit not specified.
£5000
29.9%
Representative example: When you spend £1,200 at a purchase rate of 29.95% (variable) p.a., your representative rate is 29.9% APR (variable).
Tesco Bank Foundation Card
3.9
★★★★★
£0
Min. limit £100, max. limit not specified.
£5000
29.9%
5 points per £4 spent (£4 minimum) in Tesco and 1 point per £8 spent (£8 minimum) outside Tesco. Must have available credit to earn points. Points are converted to Tesco vouchers or can be exchanged for Partner rewards to receive money off a variety of restaurants, entertainment or Avios points.
Representative example: When you spend £1,200 at a purchase rate of 29.9% (variable) p.a., your representative rate is 29.9% APR (variable).
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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

What is a credit builder card?

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.

How are credit builder cards different from other cards?

Credit builder cards work in a similar way to standard credit cards, but with some key differences:

  • Higher interest rates. The “APR” (Annual Percentage Rate) on a credit builder card will usually be much higher compared to that of a standard credit card. For example, you might pay around 27% APR compared to 18% APR for a standard card. Keep in mind that the advertised representative APR only has to be offered to 51% of successful applicants – the remaining 49% could be offered a higher rate.
  • Lower credit limits. Because lenders think there’s a risk you won’t repay your debt, credit builder cards have lower credit limits compared to standard cards. This is the maximum amount you can spend on your card and it will often be around £100 to £1,000 for a credit builder card. However, if you repay your balance on time each month, your credit limit could rise later down the track.
  • Fewer frills. Typically, a credit builder credit card won’t offer much in the way of bonuses or extras. However, you might find that some cards offer a short 0% introductory offer on purchases or balance transfers.
  • Tools to help you build your credit. To help you improve your credit rating, your card provider might offer features such as access to your credit report (through companies like Experian), text or email alerts when a payment is due or when you’re close to your limit, or tips to help you boost your credit score faster.

What is the easiest credit card to get with poor credit?

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).

What is the easiest credit card to get with poor credit?

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).

How should I compare credit builder credit cards?

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:

  • How much is it going to cost you? If you clear your balance each month (and don’t withdraw cash on your card), the APR won’t matter too much. However, it’s still worth comparing rates carefully in case you can’t afford to pay off your balance in full one month. Also check whether there are any monthly or annual fees.
  • Are you eligible? Check any minimum income or other requirements before you apply. The last thing you want to do is apply for a card you won’t qualify for. Rejected applications can make it harder to get accepted for credit in the future. It’s well worth using an “eligibility checker” as this will give you that you can use to get an indication of how likely you are to get approved before applying. And as it runs a “soft credit check”, it won’t affect your credit score.
  • Will it help you stay on top of your finances? A good credit builder card should make it easy for you to track and manage your account and manage repayments. That might mean a decent mobile app, text alerts or even visibility of your credit record.
  • Are there any perks? Rewards on credit builder credit cards aren’t commonplace, but in some instances, the issuer might include basic benefits such as loyalty points on purchases or fee-free spending overseas. Some providers also include “money saving” benefits, like points that will save you money on your food shop. Just be wary of building up debt through chasing points – you’ll almost certainly end up paying more in interest than you earn in rewards.

Are credit builder credit cards a good idea?

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:

  • You’ve missed credit repayments in the past
  • You’ve previously been declared bankrupt (likely because you had too much debt and couldn’t repay it)
  • You’ve had a county court judgement (CCJ) against your name (you might have one if someone takes court action against you saying you owe them money and you do not respond)
  • You have never borrowed before and so have no credit history

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.

Pros and cons of credit builder credit cards

Pros

  • Build your credit score. The main benefit of this type of card is the ability to rebuild your credit score over time.
  • Get access to credit. A credit builder credit card is an entry level option that will give you access to credit, especially when you’ve been refused elsewhere.
  • Get interest free days. Almost all credit cards come with up to 55 or 56 days of 0% interest on purchases, provided you clear your balance in full each month. If you don’t, interest will apply.
  • Purchase protection. Thanks to Section 75 of the Consumer Credit Act , all purchases on a credit card that cost more than £100 and up to £30,000 will be protected if something goes wrong. This applies even if you only paid a deposit on your credit card.

Cons

  • Higher interest rates. Credit builder credit cards come with higher interest rates, making it more important to clear your balance each month.
  • Low limits. If you’re approved for a credit builder, you’re likely to start off with a low limit. These limits are tailored to the individual, but can be reviewed periodically.
  • Limited rewards. Although some providers do offer 0% purchase periods or rewards, you are unlikely to get more lucrative rewards like air miles or perks like complimentary travel insurance.

What should I watch out for?

If you want to take out a credit builder card, it’s important to keep the following points in mind:

  • Never miss your minimum repayments. This will result in additional fees and damage your credit score even further. To help you remember, set up a direct debit to (ideally) pay off the full amount each month.
  • Avoid withdrawing cash. Cash withdrawals on any credit card are expensive. As well as being charged a fee, you’ll also pay a higher rate of interest – plus this will be charged from the moment you get your money, even if you pay off your balance in full that month.
  • If you are rejected for a card, wait before applying again. Every time you apply for credit, it shows up on your credit file. Too many applications in a short space of time can make you look desperate for credit and lenders might be put off. Then wait at least 3 to 6 months before applying for another card.

How else can I improve my credit score?

There are a number of other steps you can take to improve your credit score. For example:

  • Check you’re registered on the electoral roll. This helps lenders confirm your address.
  • Pay bills on time. Keeping up to date with all bills will show lenders you can manage your finances.
  • Consider a credit building tool like Loqbox. You can find out more about how this works here.
  • Check your credit report for mistakes. If you spot any, contact the credit reference agency and get them corrected.
  • Try to avoid changing jobs too often. Lenders prefer stability.

You can read our full guide on how to improve your credit score.

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We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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Written by

Rachel Wait

Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full profile

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