An excellent credit rating is crucial for loan applications and other financial services. It’s also important to know that building a good record is a long-term process and requires the cooperation of an individual.
Tesco Bank is offering the Foundation Credit Card which not only provides convenience for payments but also helps cardholders improve their credit rating with a low credit limit.
Powered by Mastercard, cardholders can enjoy worldwide acceptance and get access to retail discounts as high as 25% off. On top of this, cardholders can earn Clubcard points for every purchase using the credit card.
As part of its suite of perks, the Foundation Credit Card offers a grace period of 56 days, meaning cardholders have 56 days to pay their balance without incurring any interest charges.
Cardholders can request a credit limit increase or decrease to work with their spending needs and credit score building strategy. The only challenge is, applicants need to have a minimum income of £5,000 per year to qualify for this card.
Eligibility and Application
Interested applicants can apply for the Foundation Credit Card online through the Tesco Bank website, or visit a Tesco Bank branch. Details about employment, residential address and other personal information must be provided.
To ensure the success of the application, applicanta must be at least 18 years old, a UK resident and must be earning a minimum of £5,000 annually.
Tesco Bank rejects applicants with a Country Court Judgment in the past 18 months and those who recently closed their accounts due to missed repayments.
In terms of credit limit, the assumed amount sits at £1,200 but this will depend on the applicant’s circumstances. The minimum limit offered is £250 but it can be as high as £1,500.
The bank will consider a credit limit request if the applicant has a reasonable credit score. If the credit limit request is not approved, applicants can request an increase at a later time if they stay within the limit and manage to pay balances on time.
For purchases made using the Tesco Bank Foundation credit card, a variable interest rate of 27.5% – 39.9% p.a is charged. To help applicants rebuild their credit rating, the bank allows cardholders to make simple, manageable repayments from just £25 per month. The 56 day grace period also gives cardholders plenty of time to pay off their balance without incurring interest charges.
While balance transfers are also charged at a variable annual interest rate of 27.5% – 39.9%, cash withdrawals will cost cardholders more, at a fixed interest rate of 39.9% p.a. Note that the 56 day grace period does not apply to balance transfers and cash withdrawals.
If purchase balances are not settled within the 56 day grace period, a late payment charge of £12 is added on top of the balance.