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How does the Vanquis credit builder card work?

The Vanquis Credit Builder Credit Card is meant to help people improve their credit scores or build them up from scratch.

The way a credit builder card like the one offered by Vanquis works is simple. By making at least the minimum payment on time each month and staying within the credit limit, people with poor or no credit can gradually improve their credit history and score over time.

However, because credit builder cards accept riskier borrowers, they must charge higher interest rates and offer lower credit limits to compensate for this risk. They also often come with no rewards or cashback and very short interest-free periods on purchases.

The Vanquis credit builder card is no exception.

What are the Vanquis credit card interest rates and fees?

The Vanquis credit builder card has a representative APR of 34.5% (variable). What you need to know about this rate:

  • “Representative” means that at least half of those who applied for this card were offered this rate. But yours might be different – it’s all based on your specific situation and credit rating. According to Vanquis, rates can go as high as 69.9% per year!
  • “Variable” means that the APR might increase or decrease in the future based on the Bank of England base rate. If inflation continues, this can increase quite a bit.

The Vanquis credit card also has an interest-free period on purchases of up to 56 days. This means that as long as you’ve paid your statement balances are paid off in full and on time, you have 56 days to pay for your purchases using this card and without the APR kicking in.

What is the Vanquis card credit limit?

As a new customer, you typically start with a credit limit within the £500 to £1,200 range to help you get used to how a credit card account works.

However, this limit is not set in stone. You can increase it by making good use of the available credit, keeping other credit accounts in good standing, avoiding exceeding your limit, and making payments in full and on time.

How can I increase my Vanquis credit card limit?

You cannot directly request a credit limit increase with Vanquis. However, Vanquis regularly reviews accounts to see if you’re eligible for an increase.

Here is how it works:

  • Your initial credit limit is between £500 and £1200 for the first four months.
  • After four months have passed, Vanquis will automatically review your account every month to determine whether you are eligible for a credit limit increase.
  • If you are eligible for a credit limit increase, Vanquis will notify you through the Vanquis app, email, or text. You may need to complete an income and expenditure check to accept the offer.
  • If you have recently had an increase, you may not be eligible for another one for the next four months.

Even though you cannot directly request a credit limit increase, you should avoid requesting a credit limit increase yourself. Each request involves a new hard credit check, like a loan application, which might temporarily lower your credit score.

The good news is that once your credit limit is increased, your credit score should recover and even improve a bit after a few months.

What happens if I make a late payment to my Vanquis card?

If you make a late payment on your Vanquis Credit Builder Credit Card, here’s what will usually happen:

  • First, you will be charged a fee, typically around £12, for making a payment after the due date.
  • Vanquis will also report your late payment to the credit reference agencies. This late payment will stay on your credit file for six years and hurt your credit score, especially if it happens more than once – the opposite of what you’re trying to achieve with Vanquis.
  • You might also not receive a future credit limit increase from Vanquis. Vanquis might even reduce your credit limit, another factor that can lower your credit score.
  • Vanquis might eventually cancel your credit card and close your account. If this happens, your credit score will take another hit.
  • If your debt is significant, you might receive a default notice or be taken to court. This could have a devastating impact on your credit score – one default can take your score down by as much as 350 points, according to Experian.

To avoid late payments, Vanquis recommends using the Vanquis app to set up regular payments, track payment due dates, and use direct debits. Making timely payments is crucial for building and keeping your credit score in good shape. This is why you got a card like Vanquis, after all.

How can the Vanquis credit card help me improve my credit score?

Here are some key ways a credit builder card like Vanquis can help you improve your credit score:

  1. The card can provide a line of credit when other providers might refuse your applications. This can often be one of the few ways you can build a history of debt repayments, which you need if you want to improve your credit score.
  2. By not exceeding the credit limit, you can show that you’re a responsible borrower and don’t “live on credit.”
  3. By automatically reviewing your account monthly to see if you’re eligible for a credit limit increase, Vanquis can help you improve your credit utilisation ratio (how much credit you use versus how much you could use) without going through another credit check.

However, don’t forget that the Vanquis credit card is still a credit builder card. This means that it comes with the same risks:

  • A much higher APR than most other cards.
  • A very low initial credit limit can make it easy to max out your card and accidentally hurt your credit score.
  • And a perhaps too easy way to get into more debt.

Because of these reasons, you might want to look into safer alternatives – credit-building apps.

One such app is Wollit. Building your credit history with a card like Vanquies requires you to first buy things on debt and then repay them as soon as possible. With Wollit, you only need to pay a fixed monthly subscription. Wollit then reports this subscription as a loan repayment to the credit reference agencies.

This directly builds your credit history and improves your credit score – while keeping you safe from high APR charges, maxed-out credit limits, or the risk of more debt.

More importantly, as your credit score increases, you’ll eventually become eligible for credit cards with higher credit limits and lower APRs than Vanquis.

Wollit, no stress, no hassle - just a clear path to better credit

Terms apply. Results may vary. Improvements to your credit score are not guaranteed. Wollit Credit Builder plans are unregulated.

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Terms apply. Results may vary. Improvements to your credit score are not guaranteed. Wollit Credit Builder plans are unregulated.