Compare Credit Builder Cards

Credit builder cards are a specialist type of credit card. They are meant to give people with poor or limited credit histories an opportunity to improve their credit score by making payments on time and showing they can handle credit responsibly.

» MORE: What is a credit builder card?

You can use a credit builder card to make purchases, both online and in store. You would then repay the amount you’ve spent through monthly payments at a date set by the lender.

For a credit builder card to improve your credit score, you need to stay within your credit limit and make your repayments on time, as a minimum.

Bear in mind you also need to manage any other credit commitments and not get behind on other repayments, for example, to see your credit score improve.

A credit builder card is a type of credit card. It works in the same way, but it is specifically designed for people who may find it difficult to get a more standard credit card.

Because they are intended for people with lower credit scores who are viewed as a higher risk, credit builder cards will often come with higher interest rates and lower credit limits.

If you stay within the terms of your agreement, including making payments on time and staying within your credit limit, a credit builder card could help to improve your credit score.

However, your credit history is affected by a range of factors, so whether your credit score improves or not will depend on other aspects of your finances, not just the credit builder card.

No. When you apply for any type of credit card, including credit builder cards, providers will run a credit check. They will also use information from the credit check to work out the terms of the card, including its credit limit and interest rate.

A credit builder card can help you to build up your credit score by giving you the opportunity to borrow money and repay it by a set deadline. If you make repayments on time, they can help to prove that you can manage your credit effectively.

The credit card provider will report your payments to credit reference agencies (CRAs), and this positive information can help to build up and increase your credit score.

Different card providers will have different eligibility criteria, but you will normally need to be at least 18 or 21 years old and a UK resident to get a credit builder card.

If you have a bad or a limited credit history, you may still be eligible for a credit builder card as they are designed to help people with poor credit. However, check the requirements of individual providers as some may require a minimum income or may not accept applications from people with CCJs, for example.

You can see if you’re eligible for a credit builder card here.

Yes, you may be able to get a credit builder card even if you don’t have a credit history, although the final decision will rest with the individual provider. Different providers will have different criteria, so you may not always qualify for a credit builder card if your credit history is limited.

Having bad credit won’t necessarily stop you from getting a credit builder card, but you may not be eligible for every deal. The decision will rest with individual providers.

If you have bad credit, you can see what cards you may be eligible for before you apply.

» COMPARE: Credit cards for bad credit

In most cases, credit card providers will require you to have some form of income to be accepted for a credit card, whether that’s from a full-time or part-time job or from benefits. However, depending on your circumstances, it may still be possible to get a credit builder card if you’re on a low income or your lack of income is temporary, if you’re unemployed for example.

The interest rate you get on a credit builder card will vary, depending on your individual circumstances and the credit card company.

Typically, credit builder cards will charge a higher interest rate than standard credit cards.

» MORE: Credit card interest rates explained

Credit builder cards usually come with lower limits than standard credit cards for those with better credit scores. The limit could be as little as £100 or it could go up to £1,000 or higher. Your credit score and financial situation will affect the credit limit you get.

If you prove you can make payments and manage your card, you may be able to increase your credit limit.

This depends, as your credit score is affected by many different factors.

It could take at least a few months of regular payments on your credit builder card before you start to notice a change in your credit score. Overall, the length of time it will take to build credit will depend on the state of your credit history and how you manage your credit card, as well as how well you manage other areas of your finances.

» MORE: How to check your credit score

You don’t need a credit card to build credit. Your credit history is affected by a wide range of factors, and a credit card is just one way to show you can make payments and handle credit responsibly.

For some people, getting a credit card won’t be the best way to build credit. A credit card can only help you to improve your credit history if you can afford the repayments and avoid getting into debt.

» MORE: Should I get a credit card?

A credit builder card isn’t the only way you could improve your credit history.

If you have any other credit products, such as a mortgage, loan, overdraft, and car finance, repaying these on time could help to improve your credit score. Rent and bill payments could also affect your score.

Other factors that could help your credit score include registering to vote and limiting the numbers of applications you make for credit.

» MORE: Tips to improve your credit score

You may be able to use a credit builder card to withdraw cash, but this is likely to be an expensive choice as providers will often charge higher interest or extra fees for cash withdrawals.

As with any other credit card, any purchases you make on your credit builder card worth between £100 and £30,000 can qualify for protection under Section 75 of the Consumer Credit Act.

Credit builder cards are not the only option if you want to borrow money but have a bad or limited credit history. For example, there are credit builder loans that are designed to help people boost their credit score as well. Credit builder loans are typically offered by credit unions and specialist providers.

Before taking out any form of credit, be sure you can afford to make the repayments.