In today’s financial world, a good credit score is essential. It’s the key that unlocks a variety of opportunities, from getting a mortgage or a car loan to securing a mobile phone contract. However, if you’re new to borrowing or have had some financial setbacks in the past, building or rebuilding your credit can seem like a daunting task. This is where a credit builder card comes in, and a prominent option in the UK market is the NatWest Credit Builder Card.
This card is specifically designed for individuals who need a helping hand in establishing a positive credit history. By using the card responsibly, you can demonstrate to lenders that you are capable of managing credit, which in turn can lead to a stronger credit score and better financial products in the future.
What is a Credit Builder Card?
A credit builder card is a type of credit card with a few key differences from a standard one. They are typically offered to individuals with little to no credit history or a poor credit score. The most important characteristic is that they often have a lower credit limit and a higher interest rate compared to cards for people with excellent credit. This is because the provider is taking on a greater risk.
The purpose of a credit builder card isn’t to be a long-term solution for borrowing or to carry a large balance. Instead, it’s a tool for demonstrating responsible financial behavior. By making small purchases and paying off the balance in full and on time each month, you show lenders that you are a reliable borrower. This positive activity is reported to credit reference agencies, which helps to improve your credit score over time.
Key Features of the NatWest Credit Builder Card
The NatWest Credit Builder Card stands out as a clear option for those looking to improve their credit rating. Here’s a closer look at its most important features:
1. A Tool for Boosting Your Credit Score
This is the primary function of the card. NatWest explicitly markets it as a way to boost your credit score, making it easier for you to borrow in the future. The bank reports your payment history and account management to credit reference agencies. By using the card and making your payments on time and within your credit limit, you build a positive payment history, which is a major factor in calculating your credit score.
2. Representative APR (Variable)
Credit builder cards typically have a high representative APR, and the NatWest Credit Builder Card is no exception. It’s essential to understand that this card is not for carrying a balance. You should aim to pay off your balance in full every month to avoid interest charges and get the most out of the card. Paying interest would defeat the purpose of using the card as a tool for financial improvement, as it adds to your debt and costs you money.
3. Interest Rate Reduction
One of the unique benefits of the NatWest Credit Builder Card is the potential for an interest rate reduction. If you use the card at least once, pay your balance back on time, and stay within your credit limit for 12 months, NatWest will cut the interest rate by 3% for the following year. This is a great incentive for cardholders to use the card responsibly.
4. Low Credit Limit
The credit limit on this card is generally low, ranging from £250 to £1,500. This is by design. A low credit limit prevents you from getting into a significant amount of debt and encourages responsible spending. It’s a “safe” way to practice using credit without the temptation of a high limit.
5. Exclusively for Existing NatWest Customers
A crucial point to note is that the NatWest Credit Builder Card is exclusively available to existing NatWest customers who have had a current account with the bank for at least three months. This eligibility requirement makes it a targeted product for those who already have a banking relationship with NatWest.
6. No Annual Fee
The card comes with no annual fee. This is a significant advantage, as it means you can work on improving your credit score without paying an ongoing cost for the card itself.
Who is the NatWest Credit Builder Card For?
The NatWest Credit Builder Card is an ideal product for:
- Individuals with no credit history: If you’re new to the UK or have never had a loan or credit card, this card can help you establish your credit file from scratch.
- Individuals with a poor credit score: If you’ve missed payments in the past or have a low credit score, this card offers a structured way to demonstrate better financial habits and improve your creditworthiness.
- Existing NatWest customers: Since the card is only available to those who already bank with NatWest, it’s a perfect fit for a loyal customer who wants to improve their financial standing.
How to Apply for the NatWest Credit Builder Card
The application process for the NatWest Credit Builder Card is relatively straightforward, but as it’s for existing customers, you’ll need to go through the proper channels.
- Check Your Eligibility: The first step is to confirm you are an existing NatWest current account holder and have had your account for at least three months. You should also check that you meet the general eligibility criteria, which includes being a UK resident and at least 18 years old.
- Use the Eligibility Checker: NatWest provides an eligibility checker tool on their website. You can use this to get a personalized quote and see if you are likely to be approved for the card without affecting your credit score. This “soft search” is a great way to gauge your chances of success before a full application.
- Gather Your Information: To apply, you’ll need some basic information, including your address history for the last three years, details about your income and outgoings, and your NatWest bank account details.
- Log in to Online or Mobile Banking: The easiest way to apply is through your NatWest online banking or mobile app.
- Online: Log in to your online banking, navigate to the “Credit cards” section (usually under “Our Products”), and then select “Apply for a credit card.”
- Mobile App: The process is similar in the app, with clear instructions to follow.
- Complete the Application: Follow the on-screen instructions to fill out the application form. Because you’re an existing customer, some of your details may be pre-filled, which makes the process quicker.
- Receive a Decision: In many cases, you may receive an instant decision. If approved, the bank will send you the card. If not, they will notify you by mail.
A Note on Responsible Use: Once you have the card, the key to success is to use it responsibly. Make a few small purchases each month and pay off the full balance on time. Avoid using the card for cash advances, as this is an expensive way to borrow and can negatively impact your credit score.
By following these steps and using the card wisely, the NatWest Credit Builder Card can be an excellent tool for building a strong financial foundation and opening doors to a more secure financial future.
