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To apply for borrowing, you must be 18+ and living in the UK. Subject to lending criteria.
What are credit builder cards?
New to borrowing? Got a low credit score? Then it could be hard to borrow money. That's where a credit builder card could come in handy.
A credit builder card could help you build your credit score
If you pay back what you owe on time, your credit score could go up. All credit cards could improve your credit score. (This isn't guaranteed, though, as your score depends on lots of things.)
So, why do you want a good credit score?
Because if you've got a good credit score, it could be easier for you to borrow in future.
See the NatWest Credit Builder Card
Representative 34.9% APR (variable) Card is exclusively for existing customers who've had a current account for 3+ months. Must be UK resident, 18+ and earn £8.5k+ a year.
How does a credit builder card work?
If you pay your credit builder card back on time, it shows you're reliable. So lenders are more likely to lend to you – and charge you less interest.
A credit builder card is similar to other credit cards:
You'll have a credit limit – this is the most you can borrow. With a credit builder card, this limit is usually less than other credit cards.
- Every time you spend on your card, you borrow money – you'll then get a monthly statement saying how much you owe.
- You have to pay at least the minimum each month – your monthly statement will say how much this is.
- You'll be charged interest if you don't pay back the money you owe each month – credit builder cards usually charge more interest than other credit cards.
- Take care if you take cash out with this card – you'll pay interest from the day you take cash out.
So, is a credit builder card best for you?
Who are credit builder cards for?
If you've got a good credit score, a different type of credit card could be cheaper.
A credit builder card could be for you if:
- you've got a low credit score.
- you’ve never borrowed money before.
- your income is low.
So, how do you get a credit card?
How could a credit builder card improve your credit score?
Like all credit cards, a credit builder card could boost your credit score... or harm it.
It all depends on how you use it.
Tips to build your credit score:
- Don't go over your card's credit limit – the maximum amount you can borrow.
- Pay off all your balance (what you owe) every month – to avoid paying interest.
- Set up a Direct Debit to pay each month – this takes money from your account automatically, so you don't forget a payment.
- Can't afford to pay in full? You need to at least pay the minimum – your monthly statement will tell you what this is.
- Don't miss a payment – or you might have to pay extra fees, your credit limit could go down, and so could your credit score.
- Don't take out cash with your card. You'll pay interest from the day you do, plus (maybe) fees. It could also harm your credit score, especially if you do so frequently.
Want more tips?
How to improve your credit score
How do credit builder cards compare to other credit cards?
Credit builder cards tend to be different from other credit cards:
Lower credit limit. So, you can't spend as much on a credit builder card.
Higher interest rates. They could cost you more if you don't pay your balance back in full each month.
Don't usually have perks. It's unlikely you'll get 0% interest offers on purchases or balance transfers, or cashback on spending.
What other credit cards are there?
- Purchase credit cards. These are handy to spread the cost of big purchases. You may get a 0% introductory offer.
- Reward credit cards. These come with rewards like discounts or travel miles.
- Balance transfer credit cards. You could shift debt from other credit cards, for a fee. Often come with 0% interest offers.
- Travel credit cards. These cards are good for travelling abroad, as they don't usually charge you fees if you use them abroad.
- Money transfer credit cards. You don't use these for spending. Instead, you put the money you borrow into your bank account.
So, is a credit builder card best for you?
How else could I improve my credit score?
A credit builder card could help you improve your score if you pay it back on time.
7 tips to improve your credit score:
- Get on the electoral roll.
- Avoid lots of credit applications at the same time.
- Don't miss or be late with repayments.
- Don't take cash out on a credit card.
- Use consistent answers on your credit card application.
- Don't get joint credit with someone with low credit.
- Cancel unused credit cards.
Want a free credit score and more tips?