Capital One's new 0% card is designed to help people improve their credit score.
Capital One has launched a 0% credit card that almost anyone can get.
The Classic Platinum card has a three-month 0% interest period on new purchases. And as with most cards designed for borrowers with poor credit histories, it comes with of this kind has a hefty interest rate of 34.9% representative.
The deal
The Classic Platinum Purchase MasterCard has a credit limit of between £200 and £1,500, depending on your financial circumstances, and there are two potential credit limit increases allowed per year. An email alert will also be set up to remind you when you need to make a payment towards the debt.
To be eligible for the card you’ll need to be at least 18 and have a history of managing debt. If you’ve been declared bankrupt in the past 12 months or you’ve never had credit in the UK, you’re unlikely to be accepted.
How does the card compare?
The credit builder sector of the market is relatively small compared to say the fiercely competitive 0% balance transfer card section. The latest card from Capital One is one of the best, but there are similar deals around when you look at the interest rate.
The Aqua Classic MasterCard, for example, has a rate of 29.7% whereas with the Vanquis Bank Acquis Visa card it’s slightly higher at 29.8% but neither offer 0% purchase periods.
Our comparison tables show a fuller picture of the market but here I’ve listed the top five.
|
Card |
Purchases |
APR |
Notes |
|
Three months at 0% |
29.8% |
Rate of 34.9% on purchases |
|
|
n/a |
29.7% |
Free Aqua Credit Checker worth £80 |
|
|
n/a |
29.8% |
Receive a £10 Amazon.co.uk Gift Certificate, restrictions apply. |
|
|
n/a |
34.9% |
Credit limit from £200 to £1,500. Choose your own card design |
|
|
n/a |
34.9% |
Repay on time and your rate could reduce to 19.9% APR |
Purchase cards
A credit card with a 0% purchase rate can be handy if you’re about to make some big purchases but want to spread out the cost.
However, if you’re applying for a credit builder card, then it’s not a good idea to start racking up debt on it – especially as the interest rates are higher than most standard cards.
When it comes to 0% purchase cards there are better options around. The Tesco Clubcard Credit Card for purchases, for example, has a 18-month 0% period, while Halifax has a card which comes with a 17-month 0% period.
However, it’s worth remembering that both of these cards, and most of those in the top of the credit card tables, will only be given to people with a good credit score. Check out The best 0% purchase credit cards.
Credit builder cards
Missing a credit card payment, going over the limit or running out of cash to pay off your debts can all lead to a bad credit score. Once this happens you’ll have a black mark put against your credit history and every time you apply for credit this will show up.
If you’re repeatedly being turned down then a credit builder card may be an option. To use them effectively you should aim to clear the debt each month to prove you can manage your debts effectively. The best way to do this is to set up a direct debit payment to clear the card.
Before taking out more credit it's worth talking to an expert to make sure you're not pushing yourself further into debt. For those people who are in serious financial debt charities like StepChange are on hand to offer free and confidential advice and they can also create debt management plans and ask lenders for interest holidays.