What should I look out for with credit builder cards?
You should be aware that credit builder cards typically start out with low credit limits. Some lenders will increase it over time if you prove that you’re using the card responsibly – staying within your limit and paying off at least the minimum balance on time each month.
The cards also carry a much higher rate of interest than other types of credit card. It’s therefore a really good idea to repay as much of the balance as you can each month. If you can repay all of it, great – you’ll pay no interest at all.
Using a credit builder card responsibly will, over time, build or repair your credit score. It doesn’t happen overnight though, think of it as first steps on the way to a better score.