Bank holding company Capital One has launched a new credit-builder card to allow UK consumers with a patchy credit score to build their rating.
The ‘Classic Preferred’ card carries the cheapest rate available to people with bad records applying for a credit card, at 28.9%, an offer available for applications before 14 May via price comparison sites.
Those applying will be offered a credit limit between £200 ($336.3) and £1,500, depending on their circumstances.
Those given a limit below the maximum will have the opportunity to extend it twice a year if they manage their account responsibly.
Everyone accepted will be offered the headline interest rate but Capital One provided some guidelines on the type of applicant likely to be accepted: being over 18 year old and being on the electoral roll with some history of managing credit, even if this includes County Court judgements or defaults.
The company specified, however, that those who have never had any form of credit in the UK or who have been declared bankrupt in the past year are unlikely to be accepted.
The fees include 3% on cash withdrawals, 2.75% on non-sterling transactions and 3% on balance transfers.
Credit-builder cards are designed for those struggling to get accepted for a regular credit card. The interest charged is usually set between 30% and 50%, but providers can accept people with a history of debts or no repayment history at all.
Previously, the card that offered the best buy rate was Aqua’s ‘Classic Card’ at 29.13%.