At a glance
Subscription credit is a form of flexible borrowing that might be offered if you don’t qualify for more common forms of credit, such as a personal loan
With subscription credit, you pay a monthly membership fee rather than interest
It’s usually an expensive form of borrowing and you should only subscribe if you’re confident you can make your repayments on time
Most arrangements have 12-month standard contracts
What is subscription credit?
Subscription credit (also called subscription finance or membership loans) is a type of borrowing where you:
Pay a monthly fee to access credit
Can borrow money up to an agreed limit
Don’t usually pay interest on what you borrow
Exactly how much you can borrow, and how quickly you can borrow it, varies from provider to provider.
Some might loan you a small amount that you pay off over a period of months (typically up to a year), while others might loan you one amount for six months and then a further amount for the remaining six months of the term.
If you’re struggling to pay your bills, help is available from UK charities such as StepChange Debt Charity and National Debtline.
How subscription credit works
Join a provider
Choose a membership and start paying a monthly fee
Get access to a credit limit
The amount available will depend on your eligibility
Borrow when you need to
Request funds within your limit
Repay what you borrow
Make sure you stick to the repayment terms, which will vary
Keep paying the membership fee
This gives you continued access to borrowing.
Some providers may charge additional fees. Always check the terms carefully before signing up
Subscription credit vs traditional loans
Subscription finance works differently from standard loans.
Factor | Subscription credit | Traditional loan |
|---|---|---|
How you access credit | Take out a membership | Apply each time |
How you pay | Monthly fee | Fixed monthly repayments |
How you borrow | Ongoing access | One-off amount |
Cost | APRs tend to be high | APRs tend to be lower (although this depends on your credit history and the lender) |
Pros and cons of subscription credit
Advantages
Predictable monthly cost
Flexible access to borrowing
You won’t pay interest, although a monthly subscription fee applies
You may be more likely to be approved than for other forms of credit
Making repayments on time can help build your credit profile
Credit limits are typically small, reducing the risk of building up an unmanageable amount of debt
Disdvantages
You pay even if you don’t borrow
APRs are generally high, making it an expensive form of credit
Credit limits are often lower than for other credit types, so you might not be able to borrow the amount you need
Not designed for long-term borrowing
Is subscription credit right for you?
Subscription credit definitely isn’t the right option if you’re not totally confident you can make the repayments on time. Beyond that:
It may suit if you...
-
Want predictable monthly costs
-
Need flexible access to smaller amounts of money
-
Don’t qualify for a traditional loan and want to try to build your credit score
It may not suit if you...
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Don’t expect to borrow often
-
Want a cheap form of borrowing
-
Need to borrow larger amounts
-
Prefer a fixed, one-off loan
-
Can’t afford the monthly subscription cost
Things to check before you sign up
Before taking out any form of credit, it’s important to understand how it works for you. Check:
The total cost over time
Your borrowing limit
Repayment terms
Any additional fees.
FAQs
Can anyone get subscription credit?
Subscription credit is sometimes an option for people who don’t qualify for other types of credit, but being accepted isn’t guaranteed. Your eligibility will depend on the provider and your circumstances.
Is subscription credit safe?
Not all subscription credit is regulated, so you should always check the terms and make sure you can afford repayments.
Can subscription credit affect your credit score?
If you make all payments on time and your loans are settled as paid, this could have a positive impact on your credit score.
As well as writing for Churchill and Privilege insurance websites, Karen’s CV includes working with M&S, Debenhams, Tesco, Sainsbury’s and John Lewis. With over 20 years of editorial experience for big household names she leads a talented content team with a focus on simplifying personal finance for everybody.
Ele Clark is an award-winning editor who has held leadership roles at Which? and news-stand publications in London and Dubai. She’s appeared across the press and media, including BBC’s Panorama. With almost 20 years’ experience in personal finance, insurance and consumer journalism, she leads a talented team at Compare the Market, creating insightful, accessible content to help people make informed financial decisions.
Charlie is a senior commercial leader with close to a decade of experience across the UK’s leading personal-finance and comparison platforms. Before joining Compare the Market as Head of Commercial in 2024, he held senior commercial roles at TotallyMoney and MoneySuperMarket Group.
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What our expert says...
“If you’re not eligible for standard types of borrowing, such as a loan, subscription credit could be an option – but only if you’re sure you can pay back on time.
“Before applying, it’s important to check how the fees add up over time and think about whether it suits how often you’ll actually borrow.”