Blog

UK credit card borrowing costs hit multi‑decade highs in early 2025 before showing small signs of easing after the Bank of England cut the Bank Rate in August 2025. That shift affects everyday spending, travel, and how much it costs to smooth bills—especially if you’re rebuilding credit. Moneyfacts reported record purchase APRs, and banks began to pass on a modest part of the August 2025 rate cut at different speeds.

This guide breaks down the latest credit card interest rate statistics 2025, why rates are where they are, and practical ways to reduce what you pay—whether you clear in full each month or carry a balance for a while. For context, Moneyfacts flagged the market’s record‑high purchase APRs in 2025 (news summary; media centre).

Credit card interest rate statistics 2025: UK APR trends at a glance

Here are the headline UK numbers most readers look for. They summarise how borrowing costs have moved across 2025.

• Average UK purchase APR (including standard fees) reached 35.7% between March and June 2025—the highest since Moneyfacts’ records began in 2006 (Moneyfacts media centre; Moneyfacts Compare).
• Bank of England “effective interest rate” on interest‑charging credit cards hovered around 21.6% in July and 21.4% in August 2025 (BoE Money & Credit → Effective rates).
• Comparison‑site averages show typical card APRs around 36% in August 2025 (Finder UK tracker).
• Average cash (cash‑advance) interest rates sat near 30% in Q2 2025 (rounded market average; see Moneyfacts methodology and issuer disclosures).
• 0% promotional windows lengthened again through 2025, with the longest balance‑transfer and purchase offers stretching further than in 2024 (Moneyfacts Compare).

Metric	Latest 2025 reading
Average purchase APR (inc. fees)	≈ 35.7% (Mar–Jun 2025)
BoE effective rate (interest‑charging balances)	≈ 21.6% (Jul); ≈ 21.4% (Aug)
Comparison‑site average APR	≈ 36% (Aug)
Average cash‑advance rate	≈ 30% (Q2)
0% promotional windows	Longer vs 2024 (varies by issuer)

Sources: Moneyfacts; Moneyfacts Compare; Bank of England Money & Credit; Finder UK.

Why different sources disagree: APR vs ‘effective interest rate’

Two reputable numbers often appear in UK coverage: Moneyfacts’ average representative APR and the Bank of England’s “effective interest rate.” They answer different questions, so they rarely match.

• Moneyfacts average representative APR
  • What it includes: Advertised representative APRs for cards on the market. These wrap the purchase rate plus standard fees into one figure.
  • How it’s calculated: Market‑wide analysis of representative APRs publicly quoted by issuers.
  • How to use it: A snapshot of what’s being offered to at least 51% of accepted applicants, not what you personally will get.
• Bank of England “effective interest rate”
  • What it includes: The actual interest paid on interest‑charging card balances across the system. It excludes annual fees and people on 0% deals.
  • How it’s calculated: From banks’ data submissions in the BoE’s Money & Credit: Effective interest rates release.
  • How to use it: A barometer of what cardholders are paying on revolving balances.

“Representative APR” means that at least 51% of people accepted for the product must be offered that APR. Individual APRs vary by credit profile.

FCA Handbook CONC 3.5

If you’re near‑prime or building credit, your personal APR can be higher than the headline representative figure. Lenders price for risk, so checking your eligibility first (via a soft search) can help you avoid unnecessary score hits while you compare real, personalised rates.

What moved UK card APRs in 2025

• Base rate cut, limited pass‑through. The Bank Rate moved down in August 2025 (from 4.25% to 4.00% on 7 August, per Santander’s update), but card APRs didn’t fall one‑for‑one because issuers set wider margins and adjust more slowly.
• Issuer pricing and caps/spreads. Some providers link card rates to the Base Rate but cap or floor them, so changes can be uneven. See Bank of Scotland’s base‑rate information for how tracking works in practice.
• Competitive dynamics at record levels. Despite the base‑rate cut, market purchase APRs hit new highs in 2025 as lenders competed on rewards/0% terms rather than headline rates (Financial Times; Moneyfacts).
• Risk‑based pricing. For higher‑risk segments, APRs stayed elevated to reflect expected losses and capital costs. The BoE’s effective card rate eased only slightly in July/August 2025, underscoring a slow reset (BoE Money & Credit).

Near‑prime reality: costs, access and the 51% rule

Representative APR is a guide, not a promise. UK rules say at least 51% of people accepted for a card must be offered the advertised representative APR—others can be offered higher rates based on credit checks and affordability. That’s codified in FCA CONC 3.5.

In today’s market, the average advertised card APR sat around 36% in August 2025 (Finder UK). Many credit‑builder cards price in the high‑30s to 40s because they’re designed for people with thinner files or past blips. If you’re rebuilding, use soft‑search eligibility checks first. They show your likely APR and limit without leaving a hard footprint on your credit file.

How much does APR change cost you? Three quick UK examples

Assume you carry an average daily balance of £1,000 for a full year and make no repayments. Using a daily rate method (APR ÷ 365) with daily compounding:

Purchase APR	Approx. interest over 12 months
22%	~£246
36%	~£434
49%	~£636

Takeaways: paying your statement balance in full each month avoids purchase interest entirely. If you do carry a balance, even a small APR reduction matters over time. Figures are illustrative and don’t reflect fees, partial repayments, or rate changes.

How to pay less interest in 2025 (without harming your credit)

• Clear in full to unlock the grace period. Many cards give up to 55–56 days interest‑free on purchases when you pay your statement balance in full and on time (Barclaycard explainer; HSBC guide).
• Automate good habits. Set up a Direct Debit for at least the statement balance (or more) and add calendar reminders a few days before the due date.
• Avoid cash advances. They have no interest‑free period, usually a higher rate, and often a cash fee on top. Use a debit card or cash instead where possible.
• Consider 0% offers if you qualify. Balance‑transfer and purchase 0% windows lengthened in 2025, but check transfer fees and revert rates before applying (Moneyfacts; Moneyfacts Compare).
• Use soft‑search eligibility checkers first. They show your likelihood of approval and an estimated APR without affecting your credit score (MoneyHelper).
• Compare with a fixed‑rate personal loan. If you’re consolidating, weigh the total cost (APR, any fees, repayment term) of a fixed‑rate loan against your current card APR.

Spending abroad in 2025: FX fees, cash advances and safer choices

Many UK cards add a foreign transaction fee of around 2.75%–2.99% on non‑sterling purchases. Cash withdrawals abroad usually add a cash‑advance fee and start charging interest straight away (Barclaycard fees; Virgin Money FX; market overview via Forbes Advisor UK).

• Pay in the local currency to avoid costly dynamic currency conversion (DCC).
• Avoid using a credit card for ATM cash unless it’s an emergency—there’s no grace period and fees apply.
• If you travel, consider a card with £0 FX fees.

For example, the 118 118 Money Credit Card has no foreign transaction fees and offers up to 51 days’ interest‑free on purchases when you pay in full; cash advances carry a fee (see product page and FAQs for details, terms apply).

Outlook: where UK credit card APRs could head next

With the Bank Rate starting to fall, card APRs may drift down only gradually. Issuer margins, funding costs, and risk appetite matter just as much. The Bank of England’s effective card rate edged lower in August 2025, while inflation stayed above target, which can keep pricing elevated even as base rates ease (BoE Money & Credit, Aug 2025; ONS CPI, Aug 2025).

Focus on what you can control: clear in full if you can, automate payments, avoid cash advances, and always use eligibility checkers to see your personal rate before you apply.

Check your eligibility (no impact to your credit score)

Want predictable costs and simple control? Check your eligibility with a soft search (no impact to your credit score). If approved, you’ll get a guaranteed credit limit, up to 51 days’ interest‑free on purchases when you pay in full, and no foreign transaction fees; cash advances carry a fee. Credit subject to status. UK residents only. Terms apply. See the 118 118 Money Credit Card and FAQs for details.

Sources and methodology

• Moneyfacts and Moneyfacts Compare: market‑level APRs, record‑high commentary, and trends in 0% promotional windows.
• Bank of England Money & Credit: effective interest rates actually paid on interest‑charging card balances (Jul/Aug 2025).
• FCA Handbook CONC 3.5: rules on representative APRs and the 51% requirement in advertising.
• ONS CPI (Aug 2025): inflation backdrop relevant to issuer pricing.
• Finder UK: aggregated series tracking advertised average APRs.
• Barclaycard and HSBC: definitions of interest‑free periods and how to qualify.
• Virgin Money (FX fees) and market overview via Forbes Advisor UK: typical non‑sterling fees.

Rates move often. Always check the latest data from the Bank of England and Moneyfacts before making decisions.

Stock images by Aleksandrs Karevs, Giorgio Tomassetti, Anthony, Vitaly Gariev, Towfiqu barbhuiya, My Profit Tutor, Global Residence Index, and Intrepid via Unsplash. Logos from Logo.dev.

Your car needs a £650 repair. You’re also eyeing a £650 city break. Both are real‑world UK spends, but you might pay for them very differently.

The quick answer to “what is the difference between a credit card and a loan?” is simple: a credit card is revolving credit you can reuse up to your limit, while a personal loan is a one‑off lump sum you repay in fixed monthly instalments. Both can be sensible, depending on your plan to repay.

In the UK, both options affect your credit file and each comes with different costs, protections and best‑use cases. Read on for a side‑by‑side view and practical tips so you can match the right tool to the job.

What is the difference between a credit card and a loan? (UK quick definitions)

Card = revolving credit you can reuse; Loan = one‑off lump sum with fixed instalments.

Credit card (revolving credit)

• You get a credit limit and a monthly statement. You can spend, repay, and spend again within your limit.
• Purchases can be interest‑free for up to 51–56 days when you pay your statement balance in full and on time each month.
• You must at least make the minimum payment; carrying a balance adds interest. Cash advances and some transactions can incur fees and interest from the day they post.
• Section 75 may protect qualifying purchases between £100 and £30,000 when you pay with a UK credit card.

Personal loan (instalment credit)

• You borrow a fixed amount upfront, then repay in equal monthly instalments over a set term (for example, 12–60 months).
• The rate is usually fixed, so your monthly payment and end date are predictable.
• You can often make extra payments or settle early to save interest (check for any capped early‑repayment charge).

Key terms in plain English

• APR: the annual percentage rate. It rolls fees and interest into one figure so you can compare products. Your personal APR depends on your credit profile.
• Soft search / eligibility checker: a quotation search you can use to check your chances without leaving a mark lenders can see on your credit file.
• Interest‑free period: on many UK cards, purchases don’t accrue interest for up to 51–56 days if you clear the full statement balance by the payment due date. If you don’t, you’ll usually lose this for new purchases until you’re back to paying in full.
• Section 75: part of the Consumer Credit Act. If you use a credit card for a qualifying purchase (£100–£30,000), the card provider can be jointly liable with the retailer if something goes wrong.

How they work day‑to‑day (revolving vs instalment)

Credit cards: flexible but require discipline

• Revolving balance: Imagine a £1,200 limit. Spend £300 and your available credit drops to £900. Repay £200 and your available credit rises to £1,100.
• Interest‑free on purchases only when you pay in full: If you clear your statement balance each month, you can benefit from the purchase grace period (see this clear explainer on how interest‑free periods work). If you carry a balance, new purchases may start accruing interest straight away until you’re back to paying in full.
• Minimum payments are not a plan: Paying only the minimum can keep you in “persistent debt” for years and cost far more in interest.
• Cash transactions: Cash advances, money transfers and some gambling transactions often incur fees and charge interest from the day they post.

Personal loans: set it and stick to it

• One‑off payout: You receive the funds once (e.g., a £3,000 loan over 36 months).
• Fixed monthly repayments: The amount and the end date are known upfront, which makes budgeting straightforward.
• Overpayments and early settlement: Paying extra can reduce interest overall. Check your agreement for any early‑repayment charge (these are capped under UK rules).
• 14‑day right to withdraw: You can usually cancel a new loan within 14 days and repay what you borrowed, only paying interest for the days you had the money.

What does it cost in 2025? Typical UK rates and offers

Credit cards: Market trackers report average UK purchase APRs in the mid‑30s APR once fees are included. See the latest updates from Moneyfacts Group and Finder’s ongoing average‑APR tracker for context (Moneyfacts analysis; Finder tracker). Your actual APR depends on your credit profile and how you use the card.

Many cards advertise 0% promotional periods on purchases or balance transfers. These can be useful if you clear the balance within the promo window. Watch for transfer fees and the revert rate after the promotion ends.

Personal loans: Representative APRs on unsecured loans vary by amount and term. Headline rates you see on comparison tables are typically for applicants with the strongest credit files. Near‑prime borrowers often pay more than the headline, but can still find fixed, predictable monthly payments that beat long‑term card borrowing. In 2025, marketplace data suggest loan pricing remains competitive for mainstream amounts and terms, especially compared with carrying a persistent card balance over many months.

When a credit card can be the smarter choice

• Short‑term spending you can clear monthly: Use the purchase interest‑free period by paying your statement balance in full and on time. Great for everyday spending you’ve already budgeted for.
• Extra protection on big buys: Section 75 can give you powerful rights on qualifying purchases between £100–£30,000 if something goes wrong with the retailer.
• Travel and online shopping: Paying by card can offer convenience and security. A specialist travel card with no foreign transaction fees helps abroad. For example, 118 118 Money’s card offers no FX fees on purchases, plus up to 51 days’ interest‑free on purchases when you pay in full (product details). Note: cash withdrawals usually carry a fee and interest from day one.
• Building credit: Sensible, low utilisation and on‑time payments can help your credit history over time.

Keep card balances well below your limit (ideally under 30% overall) and pay on time to avoid interest and protect your score.

When a personal loan can be the smarter choice

• Known, one‑off costs: Car repairs, a boiler replacement, or wedding expenses. Fixed repayments make budgeting easier.
• Debt consolidation: Rolling multiple card balances into a single fixed‑rate loan can simplify payments and lower total interest if the rate is better and you stop using the old cards for new spending.
• Bigger projects: If the cost exceeds your card limit—or paying it off within a few months isn’t realistic—a loan can be safer and clearer.

Credit score impact and eligibility (near‑prime friendly tips)

• Check eligibility with a soft search: Use quotation/eligibility tools to see your chances without harming your score. Full applications use a hard search.
• Payment history is king: Missed or late payments can stay on your UK credit file for six years.
• Watch utilisation: Try to keep overall card balances below ~30% of your limits. See guidance on ideal utilisation levels from Finder.
• Right‑size your limits: A higher limit you don’t use can help your utilisation ratio, but avoid taking on credit you can’t manage. Equifax shares helpful do’s and don’ts on limits (read more).

Pitfalls to avoid (and UK protections)

• Accidentally losing your purchase interest‑free period: If you carry a balance, new purchases may start accruing interest immediately. Solution: aim to clear in full or consider a plan to move and repay at a lower, fixed rate.
• Cash advances and money transfers: Often attract fees and interest from day one. Use only if you’ve checked the cost and repayment plan.
• Persistent debt: Paying the minimum for long periods is expensive. If you’re struggling, speak to your lender early—they must consider help. Free debt advice is available from UK charities.
• Loans and early settlement: You can usually repay early and save interest; check your agreement for how any capped charge is calculated.
• Your legal protections: For qualifying credit card purchases (£100–£30,000), Section 75 gives you joint rights against the card provider. If Section 75 doesn’t apply, try chargeback via your bank. See the Financial Ombudsman’s guidance on using these rights here.
• Cooling‑off periods: With most UK loans, you have 14 days to withdraw and repay what you borrowed, paying interest only for the days you had the money.

Credit card vs loan: the side‑by‑side view

Feature	Credit card	Personal loan
Type of credit	Revolving	Fixed‑sum instalment
How funds are accessed	Spend as needed up to your limit	One‑off lump sum paid to you
Typical rate behaviour	Variable APR; promotions may apply then revert	Usually fixed APR for the term
Repayments	Monthly statement; pay in full to avoid interest or at least the minimum	Equal monthly repayments over a set term
Interest‑free options	Up to 51–56 days on purchases when you pay the full statement on time	Not applicable; interest charged as per the agreement
Fees to watch	Cash advance fees; balance transfer fees; late/returned payment fees	Possible arrangement fee; early‑repayment charge (capped); late payment fees
Purchase protection	Section 75 on qualifying purchases (£100–£30,000)	No Section 75 (but standard consumer rights still apply)
Best for	Short‑term spending you can clear monthly; travel/online buys; flexibility	Known one‑off costs; longer repayment plans; consolidation
Key risks	Persistent debt if only minimums are paid; losing interest‑free period	Fixed commitment; charges possible if you settle early
Impact on credit	Utilisation and payment history are key	Payment history and overall indebtedness matter

How 118 118 Money can help

Looking at a fixed plan? Our unsecured personal loans come with a soft‑search eligibility check, so you can see your options without harming your score, and fast payout if approved. Prefer flexibility? Our credit card has a guaranteed credit limit, up to 51 days’ interest‑free on purchases when you pay in full each month, and no foreign transaction fees on purchases (cash withdrawals carry a fee and interest from day one). Manage everything in our mobile app or online, with live‑chat support if you need help.

118 118 Money is a trading name of Madison CF UK Limited. Authorised and regulated by the Financial Conduct Authority (FRN 741774). UK residents only. Terms apply.

Logos from Logo.dev.

Picture two common moments. Your car needs a £650 repair. A week later you spot a £650 holiday deal you don’t want to miss. Same price, but the best way to pay might be different.

In plain English, the difference between a credit card and a loan is simple. A credit card is revolving credit you can reuse up to a set limit. A personal loan is a one‑off lump sum that you repay in fixed monthly instalments over a set term.

In the UK, both show on your credit file and come with different costs, protections and risks. Below you’ll find a quick side‑by‑side, real‑world examples, and clear pointers to help you choose the right tool for your budget.

What is the difference between a credit card and a loan? (UK quick definitions)

Credit card = reusable line of credit up to a limit, with a monthly statement and an interest‑free period on purchases when you pay in full.

• How it works: You spend up to your credit limit. Each month you get a statement. Pay the full statement balance by the due date and you usually get up to 51–56 days of interest‑free on new purchases. Pay less than the full amount and interest is charged on what you carry over.
• Minimum payment: A small amount you must pay to avoid late fees. Sticking to minimums can be very expensive over time.
• Section 75 protection: If you use your card for a purchase between £100 and £30,000, UK law can make the card provider jointly liable with the retailer if something goes wrong (terms apply).

Personal loan = one lump sum now, repaid in equal monthly instalments over a fixed term at a fixed rate.

• How it works: You receive money once, then repay it in set monthly amounts until the end of the term (for example 12–60 months). Payments are predictable and do not fluctuate.
• Early settlement: You can repay early and may save interest, but a capped early‑repayment charge can apply (check your agreement).

How they work day‑to‑day (revolving vs instalment)

Both tools can be useful, but they behave differently in everyday life. Here’s what to expect.

Credit cards

• Revolving credit: Spend, repay, and your available credit refreshes. Example: with a £1,200 limit, a £200 payment frees £200 to use again.
• Interest‑free on purchases when paid in full: If you clear your full statement balance every month, you usually pay no purchase interest. If you carry a balance, you’ll be charged interest and may lose the interest‑free period for new spending. See more on how grace periods work from HSBC.
• Minimum payments: Paying only the minimum keeps the account in good standing but can make debts linger and cost more.
• Fees and day‑one interest: Cash withdrawals, money transfers, and some transactions often incur fees and start accruing interest immediately.

Personal loans

• One‑off payout: You receive the funds once. There’s no “available credit” to reuse.
• Fixed monthly repayments: Example: a £3,000 loan over 36 months at a fixed rate means the same payment on the same date each month, which helps budgeting.
• Overpayments and early settlement: Paying more than the scheduled amount or settling early can reduce interest overall, but check for any capped early‑repayment charges in your agreement.
• 14‑day right to withdraw: In the UK you can withdraw from a regulated loan within 14 days and repay what you borrowed plus interest for the days you had the money.

What does it cost in 2025? Typical UK rates and offers

Pricing moves with the market and your credit profile. Here’s the current landscape to help you compare total cost, not just the headline APR.

• Credit cards: Average UK purchase APRs have been in the mid‑30s APR in recent months. Industry trackers such as Finder and Moneyfacts report record‑high averages, reflecting higher base rates and fees. Your personal APR depends on your circumstances and the product’s risk‑based pricing.
• 0% promotional deals: Many cards offer 0% on purchases or balance transfers for an introductory period. Balance transfer fees can apply and the rate typically reverts to the standard purchase APR after the promo ends.
• Personal loans: Headline rates for popular amounts/terms have edged down in early 2025 versus late 2024 at some lenders as rate pressures ease. Near‑prime borrowers usually pay higher than the best advertised rates, so check your personalised quote.
• Compare the total cost: For cards, a repayment plan matters more than the APR alone. For loans, look at the monthly payment, total interest over the term, and any early‑repayment charges.

When a credit card can be the smarter choice

• Short‑term spending you can clear monthly: Groceries, fuel, or a £650 hotel booking you can repay in full next statement to use the interest‑free period on purchases.
• Extra purchase protection: Section 75 can help on eligible transactions (£100–£30,000) if a retailer goes bust or fails to deliver.
• Travel and online payments: Paying by card can add protections and convenience. If you want to avoid foreign transaction fees, consider a specialist no‑FX‑fee card for spending abroad.
• But watch cash: Cash withdrawals and money transfers usually incur a fee and interest from day one, so keep them for emergencies.

To protect your credit score, aim to keep utilisation low (ideally under about 30% of your limit) and pay on time every month.

When a personal loan can be the smarter choice

• One‑off, known costs: Car repair, boiler replacement, dental work or a wedding where fixed monthly repayments help you budget with confidence.
• Debt consolidation: Combining multiple card balances into one loan at a lower fixed rate can simplify repayments. If you close old cards, do it gradually to avoid harming your overall credit history and limit.
• Bigger projects: If the cost exceeds your card limit, a loan can provide the full amount at once without juggling multiple cards.

Credit score impact and eligibility (near‑prime friendly tips)

• Check your chances first: Use soft‑search eligibility checkers to compare options without affecting your score. Full applications use a hard search that appears on your file.
• Payment history is king: Paying on time, every time, has the biggest impact. Missed payments can stay on your UK credit file for six years.
• Keep utilisation in check: Try to use roughly under 30% of your total card limits. Guidance from Finder and other sources suggests lower utilisation can support healthier scores.
• Right‑size your limits: A sensible limit you can manage is better than a high limit you’ll struggle with. See limit dos and don’ts from Equifax.
• Build a simple plan: Check your reports with the UK CRAs (Equifax, Experian, TransUnion), set up Direct Debits for minimums at least, and review balances monthly.

Pitfalls to avoid (and UK protections)

• Don’t lose your interest‑free period: If you carry a balance, you may pay interest on new purchases too. Clearing the full statement amount resets the interest‑free benefit.
• Avoid cash unless necessary: Cash advances and money transfers often have fees and attract interest from day one.
• Persistent debt risk: Only making minimum payments for a long time can trigger lender contact and harm your finances. Speak to your lender early if you’re struggling.
• Know your loan rights: Understand early‑settlement rules and any capped charges before you sign. You have a 14‑day right to withdraw from most regulated personal loans.
• Use protections when things go wrong: For qualifying credit card purchases, Section 75 can help. If it doesn’t apply, you may still request a chargeback. The Financial Ombudsman Service explains your options.

Credit card vs loan: the side‑by‑side view

Here’s a compact comparison to answer “what is the difference between a credit card and a loan?” at a glance.

Feature	Credit card	Personal loan
Type of credit	Revolving (reuse up to a set limit)	Instalment (one lump sum)
Access to funds	Spend by card or online; reuse as you repay	Cash paid into your account once
Typical rate behaviour	Variable APR; promos (e.g., 0% periods) then revert to standard APR	Usually fixed APR for the whole term
Repayments	Flexible; at least a minimum each month	Fixed monthly instalments on a set date
Interest‑free options	Up to 51–56 days on purchases when you pay the full statement balance	None by default (interest charged from day one)
Fees to watch	Cash advance fees; balance transfer fees; foreign transaction fees on many cards	Possible early‑repayment charge; late payment fees
Purchase protection	Section 75 on eligible purchases (£100–£30,000)	No Section 75; normal consumer rights apply
Best for	Short‑term spending you can clear monthly; travel/online purchases	Known, one‑off costs and consolidation with predictable payments
Risks	High interest if you carry a balance; persistent debt if paying minimums only	Early‑repayment charges may apply; fixed commitment for the term
Impact on credit	Affects utilisation and payment history	Affects payment history and total outstanding debt

How 118 118 Money can help (optional)

If a fixed plan suits your budget, our personal loans include a soft‑search eligibility check and fast payout when approved. Prefer flexibility? Our credit card offers a guaranteed limit, up to 51 days’ interest‑free on purchases when you pay in full each month, and no foreign transaction fees for spending abroad (cash withdrawals carry a fee) — see card details. Manage everything in our app or online, and chat to us if you need help via live chat.

118 118 Money is a trading name of Madison CF UK Limited. Authorised and regulated by the Financial Conduct Authority (FRN 741774). UK residents only. Eligibility and lending criteria apply.

Stock images by Sincerely Media, Mason Supply, Nolan Issac, Tran Mau Tri Tam ✪ and Muhammad Daudy via Unsplash. Logos from Logo.dev.

You can see your chances of being approved for a UK loan without leaving a mark on your credit score. The trick is using a soft search. It lets you check likely acceptance and estimated costs before you commit. This is especially helpful if you’ve been declined before or you’re rebuilding credit.

In this guide, you’ll learn how to check loan eligibility without affecting credit score, step by step. We’ll cover what lenders look for, how to compare offers safely, and the easy tweaks that can improve your results. You’ll also see common pitfalls to avoid so you only apply when you’re ready.

Soft search vs hard search: what’s the difference (and why soft checks don’t hurt your score)

A soft search is a light touch look at your credit file. It’s used for eligibility checkers and when you view your own report. A hard search is the full check a lender does when you make a complete application.

• Visibility: Soft searches are only visible to you on your credit report; other lenders can’t see them. Hard searches are visible to other lenders and can influence their decisions. See guidance from Experian and Equifax.
• Impact on score: Soft searches don’t affect your credit score. Hard searches may cause a small, temporary dip.
• Typical use: Soft for eligibility tools, price checks and when you check your own file. Hard for full credit applications (loans, credit cards, some car finance) and sometimes for UK services like mobile contracts or certain utilities.
• How long they stay: Soft and hard search “footprints” generally remain on your file for up to 12 months. Only hard searches are visible to other lenders, as noted by the CRAs.

Use eligibility tools that run a soft search to compare options without harming your score.

How to check loan eligibility without affecting credit score (step‑by‑step)

Here’s a simple UK process for checking your chances without leaving a mark:

1. Check your credit reports first. This is a soft check. Review Experian, Equifax and TransUnion versions if you can. Fix errors, confirm your current address, and make sure you’re on the electoral roll at that address.
2. Use eligibility checkers that clearly say “soft search”. On lender or comparison sites, look for wording like “won’t affect your credit score” before you start. If it isn’t stated, assume it may be a hard check and don’t proceed.
3. Enter accurate income and expenses. Lenders verify. If your numbers don’t match reality, you risk a decline at full application even if the soft result looked positive.
4. Shortlist the best‑fit offers. Save quotes with the monthly payment, estimated APR and any guaranteed elements. Convert only one to a full application once you’re confident.
5. If declined, pause. Read any reason codes. Improve what you can (e.g., reduce utilisation, correct data, join the electoral roll) and try again later. Avoid applying repeatedly in a short period.

What lenders assess beyond your score (make your soft‑search results stronger)

Soft‑search tools estimate your chances. Behind the scenes, lenders typically look at:

• Income and employment: Regular, verifiable income and stable work patterns.
• Affordability: Your existing commitments versus the proposed monthly repayment.
• Address history and identity: Consistent addresses and being on the electoral roll.
• Credit utilisation: How much of your available credit you’re using right now.
• Recent behaviour: On‑time payments in the last 6–12 months carry a lot of weight.
• Adverse markers: Any defaults, CCJs or arrangements to pay.

Compare offers safely: pre‑approval, guaranteed rate, and representative APR

• Pre‑approved / pre‑selected: You’re very likely to be accepted, subject to final checks like income verification and fraud screening.
• Guaranteed rate: The APR you see at eligibility is the APR you’ll get if accepted after final checks.
• Representative APR: The advertised rate must be given to at least 51% of accepted applicants; others may get a higher rate based on their profile.
• Guaranteed credit limit (for some cards): Your initial limit is confirmed at eligibility if you’re approved later.

Use these labels to build a shortlist without triggering a hard check: prioritise any guaranteed terms, compare monthly repayments, and note fees. For loans, focus on the total repayable across the term, not just the APR. For cards, consider how you’ll use it (e.g., paying in full to benefit from any interest‑free period).

Avoid common pitfalls when shopping for credit in the UK

• Turning multiple soft checks into hard applications: Space out full applications; too many hard searches close together can hurt your chances.
• Applying with unverified details: Make sure your address history, income and employment can be evidenced.
• Ignoring affordability: Sense‑check the monthly payment against your budget to avoid payment shock.
• “No credit check” promises: Be cautious. Genuine UK lenders use credit checks. If in difficulty, seek free support at MoneyHelper.
• Taking a soft‑search decline as permanent: Fix the reason (e.g., high utilisation, errors, not on electoral roll) and try again later.
• Forgetting non‑credit services: Some mobiles and utilities may run hard checks — factor this into your timing.

Quick affordability sense‑check (before you click Apply)

A fast buffer check can save you from unnecessary hard searches. Make sure the trial monthly repayment leaves comfortable room after essentials and existing credit commitments. Use eligibility tools to test different loan amounts and terms until the payment fits your budget. If money would be tight most months, pause and adjust.

How 118 118 Money helps you check eligibility with no impact

Use 118 118 Money’s online eligibility checks to see if you’re likely to be accepted for a personal loan or credit card without affecting your credit score. The check uses a soft search only. If you choose to proceed with a full application, a hard credit search will be performed.

For the 118 118 Money credit card, you’ll see a guaranteed credit limit at the eligibility stage if you’re later approved. The card also offers up to 51 days’ interest‑free on purchases when you pay your statement balance in full each month, and no foreign transaction fees; cash advances have a fee. UK residents only. Borrow responsibly.

FAQs: soft checks and your UK credit file

Key takeaways and next steps

• Use soft‑search eligibility tools first to compare loans without harming your score.
• Prepare your credit file: join the electoral roll and correct any errors before you apply.
• Shortlist by total cost (monthly payment and total repayable) and any guaranteed terms.
• Apply once you’re confident, and space out hard checks.
• If declined, fix the cause and try again later rather than applying repeatedly.

Warning: Late repayment can cause you serious money problems. For help, go to MoneyHelper.

Stock images by PiggyBank, Gavin Allanwood, Bimbingan Islam and Muhammad Daudy via Unsplash. Logos from Logo.dev.

Used well, debt consolidation can cut the fees and interest you pay — not just shrink your monthly bill. That matters more than ever. Average UK credit card purchase APRs have been sitting around record highs in recent months, so small mistakes (like a late payment or a high transfer fee) can get expensive fast. See Moneyfacts’ latest trends on card borrowing costs for context: borrowing costs at record highs.

Total cost beats “lower monthly payment” every time.

In plain English, debt consolidation means rolling several balances into one plan to repay faster and for less. That might be a 0% balance transfer credit card, a fixed-rate personal loan, or a debt management plan (DMP) if you need breathing room. This guide focuses on UK adults (18+) — especially credit builders — who can afford steady repayments and want predictable costs.

Your options depend on eligibility and affordability. If you’re already behind on priority bills (rent, mortgage, council tax, energy), get free, impartial debt advice first. And when you compare products, use soft-search eligibility checkers to avoid harming your credit score.

Debt consolidation, in one minute (UK)

Debt consolidation means swapping multiple debts for one clearer plan. Here are the main UK routes:

• 0% balance transfer credit card: move existing card balances to a new card at 0% for a set time. You normally pay a one-off transfer fee. Aim to clear it before the promo ends, or the APR reverts to the standard purchase/BT rate.
• Fixed-rate personal loan: borrow once, repay in equal monthly instalments over a set term. Helpful if you value a fixed end date and predictable costs.
• Debt Management Plan (DMP): a charity helps you offer affordable payments to creditors. Interest and charges are often frozen (not guaranteed). Best if you can’t meet contractual payments.
• Secured lending/remortgage (use with caution): may lower the APR but puts your home at risk. Not usually a first step for unsecured debts.

Will consolidation cut your fees? A quick decision check

Use this simple flow to test whether a consolidation move lowers your total cost.

1. List each debt: balance, APR, any fees, and when promos end.
2. Add one‑off costs: balance‑transfer fees, loan origination fees, and any early‑settlement charges.
3. Compare total cost to clear: your current path vs the new option. Beware the pitfall: stretching over a longer term can reduce your monthly payment but increase the overall interest.

Before you apply, use an eligibility checker (soft search) to see your chances without marking your file.

Best practice 1: Map all debts and prioritise by cost

Start with a single page (paper or notes app). For each debt, record:

• Balance and APR (is it variable? promotional?)
• Fees: late fees, balance‑transfer or origination fees
• Remaining term and promo end dates
• Minimum payment and your current payment

Sort by total cost drivers: highest APRs and expiring promos first. Then decide which tool (transfer card, loan, or DMP) best fits your timeline and budget.

More on priority debts: MoneyHelper – Priority debts explained.

Best practice 2: Pick the right tool for your situation

0% balance transfer card

• Good for: clearing card debt within the promotional window.
• Watch for: transfer fee (often ~2%–4%), the revert APR after the promo, and the rule that one late payment can end the 0%.
• Best practices: avoid new spending on the same card; set up autopay for at least the minimum plus a fixed top‑up; aim to clear before the promo ends.
• Market trend: interest‑free terms have lengthened recently — see Moneyfacts for current averages.

Fixed‑rate personal loan

• Good for: predictable payments and a clear end date.
• Check: any origination fee or early‑settlement terms; compare total interest over the term to your current path.
• Tip: this can suit near‑prime borrowers who want certainty and a fixed finish line.

Debt Management Plan (DMP) via a free, FCA‑supervised charity

• Good for: simplifying to one affordable payment when you can’t meet contractual minimums.
• Fees: £0 with reputable providers; interest/charges are often frozen but not guaranteed.
• Learn more: StepChange – DMPs explained.

Secured lending or remortgaging (use with caution)

• Pros: can cut the rate.
• Cons: your home is at risk if you don’t keep up repayments. Consider only after free debt advice and comparison with other routes.
• If you’re struggling: read Citizens Advice guidance on options when you can’t pay.

Best practice 3: Compare total cost — example and breakeven (with calculator)

Worked example (rounded)

• Starting point: £5,000 on cards. Current APR 34.9% (typical near‑prime purchase APRs have been at record highs — see Moneyfacts).
• Option A: 0% balance transfer for 20 months, 2.5% fee (£125). To clear in 20 months you’d pay about £256/month. Total cost ≈ £125 (the transfer fee), provided you never lose the promo.
• Option B: Fixed‑rate personal loan at 24.9% APR over 24 months. Monthly ≈ £268. Total interest ≈ £670. Predictable, but higher cost than Option A if you can meet the 20‑month target.

Breakeven idea: A higher transfer fee or shorter promo can erase the saving. If your fee rose to ~5% or you could only afford ~£200/month (meaning some balance hits the revert APR), a good loan might become cheaper overall. Always run the numbers for your budget.

Try it with your figures below.

Best practice 4: Protect your credit score while you shop

• Use soft‑search eligibility checkers first to see likely approval odds without a footprint that affects your score.
• Avoid multiple full applications in a short period. Space out hard checks.
• Check your credit reports with all three CRAs (Experian, Equifax, TransUnion) and fix errors before applying.
• Keep utilisation low: after a successful balance transfer, don’t immediately close old cards if that will spike your % used. Keep them open but avoid spending.
• Know the difference: soft searches don’t affect scores; hard searches do and usually stay visible for up to 12–24 months depending on the CRA. See Experian: searches and credit checks.

Best practice 5: Avoid common UK fees and traps

• Balance‑transfer fees: factor these into your total cost. A higher fee can wipe out a 0% saving.
• Late payments: one late payment can end a 0% promo. Set up autopay and calendar reminders.
• Cash advances: usually attract a fee and interest from the day you withdraw. Avoid unless you can clear in full and understand your card’s terms.
• Foreign transaction fees: many cards charge extra on overseas spending; choose a card without FX fees if you travel.
• Early‑settlement or origination fees on loans: check the small print so there are no surprises.
• Mixing new spending with a balance transfer: new purchases may not be interest‑free unless you pay the full statement balance each month. Learn typical card charges and grace‑period rules at Citizens Advice – Costs and charges.

Best practice 6: Make it stick — budget and a small buffer

• Build a realistic budget that covers essentials first. Try MoneyHelper’s Budget Planner.
• Ring‑fence a small emergency buffer (even £10–£25/week) so surprises don’t push you back onto credit.
• Redirect savings from consolidation (e.g., lower interest) into higher monthly repayments to finish sooner.
• Talk to creditors early if you struggle. The government’s Breathing Space scheme can pause most charges and enforcement while you get advice.

Fee‑cut checklist (print and keep)

• □ Have I listed every debt (balance, APR, fees, term, promo end)?
• □ Do I know the transfer/origination fees and early‑settlement charges?
• □ Will my plan reduce total cost, not just monthly payments?
• □ Have I set up autopay to avoid late fees?
• □ Did I use a soft‑search eligibility check?
• □ What’s my monthly payoff target and finish date?
• □ What triggers would make me switch plans (e.g., promo ending)?

Where to get free, impartial help (UK)

• MoneyHelper: use the Money Adviser Network to connect to free, regulated debt advice online or by phone.
• StepChange: specialist in fee‑free DMPs and wider solutions. Start here: StepChange DMPs.
• Citizens Advice: local, face‑to‑face and online help with priority debts and creditor issues. See guidance if you’re struggling to pay a card: Citizens Advice – Credit cards.

Getting advice won’t affect your credit score, and it can open up safer options.

How 118 118 Money could help

If a fixed repayment plan suits your budget, a personal loan could bring predictability. You can check your eligibility with a soft search before you apply, then repay in fixed monthly instalments over a set term. Learn more at 118 118 Money – Personal Loans.

If you need card flexibility, the 118 118 Money Credit Card offers a guaranteed credit limit and up to 51 days’ interest‑free on purchases when you pay the full statement balance each month. There are no foreign transaction fees on overseas purchases. Cash withdrawals carry a fee. See details: 118 118 Money – Credit Cards.

Always consider affordability and total cost over the term. UK residents only, aged 18+, subject to status. 118 118 Money is the trading name of Madison CF UK Ltd, authorised and regulated by the Financial Conduct Authority (FRN 741774). You can verify a firm’s permissions on the FCA Financial Services Register. For how your data is handled, read the Privacy Policy.

Stock images by Pawel Czerwinski, Jakub Żerdzicki, 2H Media, Avery Evans, Scott Graham, Georgia de Lotz, Muhammad Daudy, Lara M, Walls.io, and janith dimanka via Unsplash. Logos from Logo.dev.

Looking for the Top 10 credit cards 2025 (UK) that help you build credit without piling on avoidable fees? You’re in the right place. This guide focuses on cards that keep costs predictable and give you control — handy if you’re building or rebuilding your credit history and want clear terms, not marketing fluff.

We highlight low ongoing fees (ideally no annual fee and low/zero fees on overseas purchases), clear interest‑free periods on purchases when you pay in full, and tools that help you avoid interest in the first place. You’ll also see which cards offer soft‑search eligibility checks, transparent limits, and app controls like spend alerts or card freeze. Rates and fees are accurate as of 01 October 2025 and can change. Always read the latest summary box from the card provider before you apply.

How we chose the top low‑fee cards for credit builders (UK, 2025)

Our shortlist prioritises cards that keep recurring costs low and terms clear. We looked for: no annual fee, low or zero non‑sterling (FX) fees on purchases, predictable cash‑advance fees, an interest‑free period on purchases when you pay in full, and credit‑building features such as soft‑search eligibility checks, app controls, and in some cases rate‑reduction incentives.

• Representative APR: A standardised rate used for comparisons that at least 51% of successful applicants get. It blends purchase interest and any standard fees. See a plain‑English explainer from Barclaycard.
• Non‑sterling transaction fee (FX fee): A percentage charged on overseas purchases in a non‑GBP currency; some cards charge 0% — useful for travel. Compare typical ranges with this overseas‑use guide.
• Cash advance fee: A fee for ATM withdrawals and similar “cash‑like” transactions. Interest often starts immediately.
• Interest‑free period: Time in which purchases don’t accrue interest, provided you pay the full statement balance by the due date.
• Soft vs hard search: A soft search shows your eligibility and won’t affect your credit score. A hard search happens when you apply; it’s visible to other lenders and may impact your score for a period.

Tip: The simplest way to keep borrowing costs at £0 on purchases is to pay your statement in full every month. And remember: Section 75 can protect eligible credit card purchases between £100 and £30,000.

Quick tool: estimate your yearly overseas card costs

Use the calculator to see how FX fees, cash‑advance fees, and any interest (if you don’t pay in full) can add up. Try 0% vs 2.75%–2.99% FX to see potential savings, and toggle “Pay in full” to understand how interest‑free periods work.

118 118 Money Credit Card: no FX fees, clear limits (credit‑builder friendly)

Designed for near‑prime customers who want predictable costs in the UK and abroad. There’s no foreign transaction fee on purchases, plus up to 51 days’ interest‑free on purchases when you pay in full. Before you apply, you can check eligibility with a soft search and see a guaranteed credit limit upfront. Cash advances carry a 5% fee (minimum £4) and can attract interest.

• Best for: Credit builders who travel or shop in foreign currencies and value clear, fixed costs.
• Tools: Mobile app to freeze/unfreeze your card, view statements, set alerts, and manage repayments.
• Keep costs low: Avoid cash withdrawals and set up a Direct Debit to pay in full every month.

Read more about overseas use and fees on the 118 118 Money travel credit card page and the credit card FAQs.

Zopa Credit Card: no fees on overseas purchases (flat £3 on cash abroad)

Zopa doesn’t charge a non‑sterling fee on purchases abroad. For overseas cash withdrawals, expect a flat fee (e.g., £3) and interest from the transaction date — so cash is best avoided. Representative APRs vary by status; check Zopa’s site for the latest details.

• Pros: 0% FX fee on purchases; simple app; good spend controls.
• Cons: Cash costs add up; carried balances can be expensive at typical APRs.
• Good for: Fee‑conscious travellers who pay in full monthly.

See Zopa’s overseas use policy and fees in its help centre: using your card abroad.

Zable Credit Card: zero foreign transaction fees, simple app controls

Zable aims at credit builders who want no FX fees on purchases and no annual fee, plus in‑app management and an eligibility check before you apply. As with most credit‑builder cards, the representative APR for carried balances is high and standard late‑payment fees (often around £12) apply — paying in full and on time is key. Limits and offers depend on your status.

Check Zable’s latest features and eligibility on the official card page. For background on the older Level card proposition, see Finder’s overview here.

thimbl Credit Builder Credit Card: ‘no extra usage fees’ in many countries

thimbl is an app‑first card for building credit, with soft‑search eligibility and clear, simple controls. thimbl guides that using the card abroad typically doesn’t add extra usage fees in many countries, though some locations are restricted — always check its country list and fee summary before you go.

• Watch‑outs: Standard cash‑advance and late‑payment fees apply; interest accrues if you don’t clear your balance in full.
• Good for: People who want a straightforward, mobile‑managed way to build credit.

Learn more in thimbl’s Help Centre and managing your credit card pages.

Barclaycard Rewards: no FX fees and fee‑free cash withdrawals (if repaid in full)

This is a strong low‑fee pick if you’re eligible: 0% FX fee on purchases, no cash‑withdrawal fee, and 0.25% cashback on spending. You must still repay in full and on time to avoid interest, especially on cash. Eligibility can be tighter than entry‑level builder cards.

• Pros: Excellent for regular travel; cashback adds everyday value.
• Cons: Not everyone will qualify; interest applies if you carry a balance.
• Good for: Those close to prime credit who want ultra‑low overseas fees.

See the official details on Barclaycard Rewards and browse wider comparisons on Forbes Advisor UK.

Virgin Money Travel Credit Card: no FX fees on purchases, app cashback offers

Good for frequent travellers trending toward prime credit. The card typically charges no FX fee on purchases, may offer promotional 0% periods (these change), and provides in‑app cashback offers at selected retailers. Cash withdrawals usually attract a fee and interest from the day you take them out, so they’re best avoided.

Check Virgin Money’s guidance on using your card abroad here.

Barclaycard Forward: starter card with potential rate reductions

A popular starter card for new‑to‑credit customers. You can check eligibility first, start with a personalised low limit, and — if you pay on time and stay within your limit — Barclaycard may reduce your interest rate (for example, 3% after year one and a further 2% in year two). Typical FX fees (~2.99%) and cash‑advance costs apply.

• Good for: Building a UK credit history with a mainstream brand and clear upgrade pathway.
• Watch‑outs: Not a travel card; overseas FX fees apply. Avoid cash withdrawals.

See the Forward card and Barclaycard’s advice on using your card abroad.

Tesco Bank Foundation Credit Card: credit‑building plus Clubcard points

Combines entry‑level access with everyday value. There’s no annual fee, you can earn Clubcard points on spending, and you get tools like CreditView to track your TransUnion score. Typical FX fees apply when you spend abroad, so it’s best for UK use or occasional travel.

Check the latest representative APR, eligibility info and fees on the Tesco Bank Foundation Card page.

Capital One Classic (and Ocean‑branded by Capital One): simple, widely accepted

Straightforward cards for rebuilding credit with no annual fee, clear app controls, and QuickCheck soft‑search eligibility before you apply. Expect typical FX fees (around 2.75%) and a cash‑advance fee, so they’re best for UK spending. Set up a Direct Debit to avoid late fees and aim to pay in full to avoid interest.

See Capital One’s range and overseas fee details: credit cards and foreign usage fees.

Aqua Classic (NewDay): broad acceptance, helpful app tools

aqua is widely used for rebuilding credit. There’s no annual fee, plus an app with coaching tips and payment reminders. Typical FX fees (~2.95%) and higher costs for cash advances apply. Purchases can be interest‑free for up to 48 days when you pay your statement balance in full and on time.

See the latest terms and representative APR on the aqua Classic page, and read aqua’s tips for using your card abroad.

Vanquis (Classic/Chrome): starter limits, clear fee structure

Vanquis offers starter credit limits and simple app controls for those building or rebuilding credit. Expect standard FX fees (often around 2.99%) and a cash‑advance fee, so it’s better for UK spending. Vanquis provides clear fee summaries in its documentation; representative APRs and limits depend on your status.

• Good for: First credit card in the UK or re‑establishing your profile.
• Watch‑outs: Avoid cash withdrawals; always pay in full if you can.

Build credit and cut costs: 7 quick wins

• Pay in full by Direct Debit. That’s how you unlock the card’s interest‑free period on purchases.
• Keep utilisation low. Aim to use under ~30% of your limit (and lower is usually better).
• Avoid cash withdrawals. They often trigger fees and interest immediately.
• Pay in local currency abroad. Decline DCC (dynamic currency conversion) to avoid hidden mark‑ups.
• Use app features. Turn on spend alerts, freeze your card when not in use, and set due‑date reminders.
• Check summary boxes before trips. Note FX fees, cash fees, and any ATM restrictions.
• Know your protections. Section 75 may cover eligible purchases between £100 and £30,000; keep receipts and contact your card issuer first if there’s a dispute.

Apply smart: soft‑search eligibility checks (avoid score harm)

Use soft‑search eligibility tools to see your chances without affecting your credit score. When you submit a full application, lenders run a hard search that other lenders can see. Too many hard searches in a short period can make approval harder, so it pays to be selective.

• Check eligibility on the issuer’s site or a reputable comparison site first.
• Pick one suitable card that fits your needs and fee profile; avoid multiple applications at once.
• Make sure your personal details match across documents and you’re on the electoral roll.
• If declined, wait before trying again and address any reasons given.

118 118 Money can help

Building or rebuilding credit and want clear costs at home and abroad? With the 118 118 Money Credit Card you can check eligibility with a soft search, see your guaranteed credit limit before you apply, manage everything in the app, and pay no foreign transaction fees on purchases. Cash advances carry a 5% fee (minimum £4) and may attract interest. Paying your statement in full each month keeps purchases cost‑free under the card’s interest‑free period.

Questions? Explore our credit card FAQs and privacy policy. 118 118 Money is a trading name of Madison CF UK Ltd. Authorised and regulated by the Financial Conduct Authority (FRN 741774). UK residents only. Subject to status.

Stock images by Sarah Agnew and Mediamodifier via Unsplash. Logos from Logo.dev.

Interest vs APR vs representative APR (UK): what each one means for your monthly cost

Searched for “Discover vs Capital One credit card” and wondering what it means for you in the UK? You’re not alone. With Capital One completing its acquisition of Discover in 2025, lots of people are comparing names and networks. This guide keeps it practical for UK residents: what’s available here, the fees that matter abroad, how rewards stack up in real life, and how to check approval odds without risking your credit score.

Capital One received final regulatory approvals to acquire Discover in April 2025 and completed the deal on 18 May 2025. Capital One investor relations confirms the timeline.

Discover‑branded cards continue to exist for now. Existing customer accounts didn’t change overnight; integration is gradual and may evolve over time. If you hold a U.S. Discover or Capital One card, watch for official updates from your issuer.

For UK readers: Capital One UK keeps issuing its own UK credit cards. Discover does not issue consumer credit cards in the UK, so availability differs even though the companies are now part of the same group.

Here’s the simple reality behind the “Discover vs Capital One credit card” search if you live in Britain:

• Discover’s consumer cards are primarily issued in the United States. Applications typically require a U.S. address and an SSN/ITIN, so they aren’t a straightforward option for UK residents. See Discover’s own guidance on application requirements: what you need to apply.
• By contrast, Capital One UK issues UK credit cards and provides a soft‑search eligibility tool so you can check your chances without harming your score: explore Capital One UK credit cards and try QuickCheck (eligibility checker).

When choosing between networks or brands, the fee line‑items often matter more than the logo. Here’s what to check in the Summary Box and credit agreement before you apply:

• Non‑sterling (foreign) transaction fees: a % markup added to overseas purchases. Many UK cards charge one; some don’t. Capital One UK explains how its foreign fees work on its support page: foreign fees explained.
• Cash advances (ATM withdrawals, gambling, money transfers): usually a one‑off fee plus a higher interest rate that starts from the day you take out cash. These transactions typically have no interest‑free period.
• Late and over‑limit fees: avoidable with alerts and app controls; they add cost and may affect your credit score.
• Annual fee: some cards charge one; work out if any rewards or features outweigh it based on your actual spending.

In the U.S., Discover is known for straightforward cash back or miles and, at times, a first‑year “match” style booster. Capital One (U.S.) leans into travel ecosystems with transferable points and partner redemptions. Those are useful if you’re eligible for U.S. cards and maximise them.

For UK residents, acceptance and fees can matter more than theoretical reward rates. Most Capital One UK cards run on Mastercard, which enjoys very broad global acceptance. Discover transacts on the Discover Global Network (including Diners Club partners). Acceptance is improving worldwide, especially post‑acquisition, but it can still be more variable by country and merchant. For a smooth trip, carry a Visa or Mastercard backup even if you have access to a Discover‑network card. See background on the acquisition here: Capital One to acquire Discover.

Protect your credit score by checking your likelihood of approval before you apply. An eligibility checker runs a soft search, which doesn’t affect your score and is visible only to you. A full application triggers a hard search that lenders can see and which may nudge your score down in the short term.

• Try Capital One QuickCheck in the UK to gauge odds before applying.
• Many UK lenders offer similar soft‑search tools. For impartial guidance on credit checks, see MoneyHelper’s explainer on soft vs hard checks (search “MoneyHelper soft and hard credit checks”).

Whichever route you take, focus on predictable costs and control: know the fees, use an eligibility checker, and set up payment reminders on day one.

If you’re after clarity and control in the UK, the 118 118 Money Credit Card is designed with predictable costs in mind. It offers no foreign transaction fees, a guaranteed credit limit and rate when you’re accepted, and up to 51 days’ interest‑free on purchases when you pay your statement balance in full and on time. Manage everything in a modern app, including the ability to freeze/unfreeze your card if it’s misplaced. Cash advances carry a fee.

UK only. Subject to status and affordability checks. Paying on time and staying within your limit helps build your credit profile over time.

Quick comparison checklist

• Foreign transaction fee (non‑sterling purchase fee)
• Cash advance fee and whether interest starts from the transaction date
• Late and over‑limit fees
• Annual fee (if any)
• Acceptance network where you’ll use the card (e.g., Mastercard, Visa)

Mini jargon buster

• APR: your yearly cost of borrowing on the card. See a plain‑English explainer here: what is a credit card APR?
• Representative APR: an advertised APR that at least 51% of accepted customers get. Your rate may differ based on your circumstances.
• Soft vs hard search: a soft search checks eligibility without affecting your score; a hard search appears on your file and can lower your score slightly for a short time.
• Dynamic Currency Conversion (DCC): when a foreign merchant offers to charge you in pounds. It’s usually pricier—choose the local currency instead.
• Interest‑free period: up to 51 days on purchases when you pay the full statement balance by the due date. Miss or part‑pay and interest is usually charged from the transaction date.

Estimate how much non‑sterling fees could add to your trip. Enter your planned foreign spend, your card’s foreign transaction fee, and how many trips you take per year. Tip: choosing a card with 0% foreign transaction fees can reduce these costs, but ATM operators may still charge their own fees.

Stock images by John Cardamone, Ethan Wilkinson, Linus Nilsson, David Dwipayana, Balázs Kétyi, Joe Halinar, Krisztina Anna Berecz, Jakub Żerdzicki and Towfiqu barbhuiya via Unsplash.

Trying to build or rebuild your credit in the UK? You’ve probably read the tip to become an “authorised/authorized user” on someone else’s card. In this guide, we’ll answer a simple question clearly: does that actually help your credit here, and what do UK lenders really see when they check your file?

Expect short, plain‑English explanations, quick pros and cons, and practical next steps you can use today. We’ll keep it UK‑specific so you don’t get tripped up by advice meant for other countries.

Bottom line up front: “Do authorized users build credit?” works very differently in Britain than in the US.

General information only, not personal advice. If you’re unsure what’s right for you, consider speaking to a qualified adviser.

Do authorised/authorized users build credit in the UK? The short answer

The one‑line answer is: usually no. In the UK, being added as an additional cardholder on someone else’s credit card does not typically show on your own credit file. You’re not the legal account holder, so the account is not normally reported in your name and won’t build your credit score.

The main cardholder remains responsible for all spending and repayments. How the card is managed can affect their credit history. If you spend on their card and they miss payments or carry high balances, that can harm their score and relationship with the lender. For context on joint vs shared cards in the UK, see Forbes Advisor UK’s explainer on joint credit cards.

“Do authorized users build credit?” In the UK, being an additional cardholder usually won’t appear on your own file.

Authorised user vs additional cardholder: UK vs US explained

A lot of online advice is written for US readers. There, an “authorized user” account often appears on the user’s credit report and can help build history—if the card issuer reports it. See Experian (US) on authorized users.

Looking for a truly “shared” option? UK lenders don’t offer joint credit cards in the usual sense. You can read more about why, and the alternatives, via checkmyfile’s guide to joint credit cards.

Caution: Advice from US articles may not apply in Britain. Check UK‑specific guidance before you act.

What lenders actually see on your UK credit file

When a UK lender checks your credit, they request data from one or more CRAs. Underwriters generally see items such as those below. Each lender scores differently, but the building blocks are similar.

• Accounts in your name: Credit cards, loans, mortgages, overdrafts.
• Balances and limits: How much you owe and your credit limits.
• Payment history: Usually up to six years of on‑time or late payments, defaults, and arrears.
• Public records: Electoral roll (your registered address for voting), County Court Judgments (CCJs), insolvencies.
• Search footprints: Soft searches (quotations and eligibility checks that don’t affect your score) and hard searches (full applications that lenders can see and that may impact your score temporarily).
• Financial associations: People you’ve taken out joint credit with; their file may be considered.

What they don’t see: your salary (unless you tell them), your savings account balances, or what you spend your money on. For a good overview of who can access your data, see Experian’s guide.

Crucially, additional‑cardholder activity isn’t normally on the additional user’s file. It sits on the main cardholder’s account record. By contrast, joint products create a financial link; learn more about financial associations via Equifax’s explainer.

If you’re added to someone’s card in the UK, lenders typically won’t see that account under your name.

Could being an additional cardholder still help or hurt you?

It won’t usually build your score, but it can still affect your money life—positively or negatively.

• Helpful: One card to manage shared costs; one monthly statement; some providers let the main cardholder set spending limits for additional users. See examples from Barclaycard and Virgin Money.
• Risky: If spending leads to missed payments or high balances, the main cardholder’s credit and relationship with their lender can suffer. That can strain trust at home too.

No judgment—just protect each other with clear expectations.

Better ways to build credit in your own name (UK‑specific)

If your goal is a stronger UK credit profile, focus on accounts reported in your name and the good habits that move the needle. Here’s a straightforward plan.

• Check eligibility before you apply using soft‑search tools on lender sites and comparison pages. A soft search checks your data without affecting your score, so you can see your chances first.
• Open and manage credit in your own name (for example, a credit‑builder card). Pay on time, every time. Set up a Direct Debit for at least the minimum. Keep utilisation low—aim to use no more than 20–30% of your limit across the month.
• Register on the electoral roll at your current address and keep it updated.
• Check all three CRAs (Experian, Equifax, TransUnion) and fix any errors. See what affects your score in Experian’s guide.
• Consider data‑sharing tools like rent reporting or Experian Boost. Not all lenders use Boost data, but it may help with some.
• Avoid cash advances and payday loans. Cash withdrawals on a credit card are expensive and can signal risk; high‑cost short‑term credit can harm your profile and affordability assessments.
• If you’re carrying debt, consider a fixed‑term loan to simplify and pay down at a steady rate, if affordable.

Joint accounts and financial links: when someone else’s credit can affect you

Being an additional cardholder does not create a financial association. But taking out a joint loan, mortgage, or joint current account does. From then on, lenders may review an associate’s file when you apply for credit.

• Think before you link: If a partner’s or housemate’s credit is weaker, that could affect your own applications.
• Breaking the link: Close the joint product, then ask CRAs for a financial disassociation. Start with guidance such as Equifax’s advice on associations and Finder’s overview.

No joint product = no financial link. Additional cardholder status alone won’t tie your credit files together.

How 118 118 Money can help you build credit safely

We design straightforward credit for UK customers who want predictability and control.

• 118 118 Money Credit Card: No foreign transaction fees and up to 51 days’ interest‑free on purchases when you pay your statement balance in full each month. Cash advances carry a fee and interest from the date of withdrawal. Manage everything in the app, including card freeze and spending alerts. Learn more: credit card features.
• Guaranteed credit limit and simple pricing: Know where you stand from day one.
• Soft‑search eligibility checks for cards and loans so you can see your chances before you apply.
• Fixed‑rate personal loans with predictable monthly repayments to help you budget with confidence. See personal loans.

We’re authorised and regulated by the Financial Conduct Authority (FRN 741774). Always borrow responsibly and only what you can afford to repay.

Before you ask to be added: a 60‑second checklist

• Reality check: In the UK it usually won’t build your credit score.
• Agree rules: What can be spent, by whom, and how you’ll reimburse.
• Set controls: Ask the issuer about per‑user limits or alerts.
• Know the main cardholder’s habits: Do they always pay on time and in full?
• Have an exit plan: Understand how to remove an additional card.
• Build your own history: Use eligibility checks, open credit in your name, pay on time, keep utilisation low.

With the facts clear, you can choose what fits your household and your long‑term goals.

Stock images by Towfiqu barbhuiya, Markus Winkler, Giorgio Tomassetti, Vitaly Gariev, Glenn Carstens-Peters, Rickard Olsson and Jakub Żerdzicki via Unsplash. Logos from Logo.dev.

Navigating loans with a 500 credit score can feel daunting. In the UK, it is possible to borrow with a weaker history, but costs and approval odds vary by lender. This guide explains how lenders assess risk, what borrowing could cost, safer alternatives to consider, and the steps to take before you apply. The aim is to help you make calm, confident choices.

Safety note: this article is general information, not personal advice. If you’re struggling with debt, consider free help from charities such as Citizens Advice.

“500” is a common search term, often based on US scoring scales. In the UK, lenders don’t use a single number. They assess your overall credit history and look at data from UK credit reference agencies such as Experian and Equifax. A profile that maps to “poor” in UK terms can still be accepted if you show stable income and responsible recent behaviour.

Lenders also review your income, regular spending, current debts, and any very recent late payments. They focus on affordability today, not just old issues. Expect tighter checks if your recent track record is thin or mixed.

Plain‑English glossary

• APR (annual percentage rate): the full yearly cost of borrowing, including interest and standard fees.
• Soft search: an eligibility check that doesn’t affect your credit score.
• Hard search: a full application check that appears on your file and can impact your score for a time.
• Affordability: whether you can make repayments comfortably after normal living costs.
• Representative APR: the rate that at least 51% of accepted applicants receive—your personal rate may differ.

Often, yes—especially with near‑prime or specialist lenders—if you can show steady income and affordable repayments. Approval is never guaranteed, but a clear, recent payment record helps.

Tip: use a lender’s soft‑search eligibility tool before any full application. It helps you gauge your chances without harming your score.

The main cost drivers

• APR vs interest rate: APR shows the true yearly cost including standard fees. Compare APRs, not just “headline rates”.
• Loan term: a shorter term means higher monthly payments but less total interest; a longer term lowers monthly cost but increases total interest.
• Fees: arrangement, late or missed‑payment fees add to the total. Read the pre‑contract information.
• Fixed vs variable: most UK personal loans are fixed, so your monthly payment stays the same.
• Your recent history: lower scores or recent late payments usually mean higher APRs and tighter checks.

These examples are for illustration, not quotes or offers. Actual rates and terms depend on your status and affordability.

Example	Amount & Term	Illustrative APR	Estimated Monthly	Total Repayable	Total Interest
1	£2,000 over 24 months	28.9%	£111	£2,664	£664
2	£3,000 over 36 months	39.9%	£144	£5,184	£2,184
3	£1,000 over 12 months	59.9%	£113	£1,356	£356

Change the term, change the cost: shortening the term usually raises the monthly payment but reduces the total interest; stretching the term does the opposite.

Always read the pre‑contract information. Check fees, early‑settlement rules, and the total repayable before you sign.

Quick wins in 2–8 weeks

1. Check all your UK credit files and fix errors with each CRA (start with Experian and Equifax).
2. Get on the electoral roll at your current address (or update it).
3. Reduce card balances where possible to lower utilisation.
4. Bring any small arrears up to date and set up direct debits to avoid late payments.
5. Avoid multiple hard searches in a short period; use soft‑search tools first.
6. Prepare documents: ID, payslips, bank statements, and a simple budget.
7. Consider adding rent or subscription reporting if offered by a CRA.
8. Use a lender’s eligibility checker before a full application.

Simple checks to protect yourself

• Red flags: “guaranteed approval”, upfront fees to “unlock” a loan, pressure to act now, or requests to pay by voucher/crypto.
• Verify the lender: search the firm on the FCA Register.
• Know the numbers: read the Representative APR, fees, and total repayable before you apply.
• If something goes wrong: use the firm’s complaints process. If unresolved, you can go to the Financial Ombudsman Service. Free help is also available from Citizens Advice.

If an offer sounds too easy or too fast to be true, pause and check it on the FCA Register.

For smaller, spread‑out purchases—or occasional travel—a credit card can offer flexibility. It’s also useful when you want purchase protection and app controls.

• Interest‑free period: up to 51 days on purchases when you pay your full statement balance on time each month.
• Spending abroad: cards with no foreign transaction fees can save you money on trips.
• Cash advances: usually incur a fee and interest from day one—best avoided.
• Good habits: pay more than the minimum, set alerts, and use in‑app tools such as card freeze for control.

As a near‑prime lender, 118 118 Money uses a soft‑search eligibility check so you can see your chances without affecting your credit score. Personal loans are fixed‑rate and fixed‑term, giving predictable monthly repayments you can budget for.

Its credit card comes with a guaranteed credit limit, clear fees, and helpful app controls (including card freeze). Important: UK residents only. Approval, rates, and credit limits depend on status and affordability. To benefit from any interest‑free period on purchases, you must pay your full statement balance on time each month. Cash advances carry fees and usually accrue interest immediately.

---

1. Check your credit files and fix any errors.
2. Set a simple budget and a target monthly payment you can sustain.
3. Use a soft‑search eligibility checker with a trusted lender.
4. Compare APR and total repayable across 2–3 options.
5. Avoid multiple applications close together.
6. Confirm early‑repayment terms and any fees.
7. If approved, set up a direct debit and payment reminders on day one.

If repayments ever feel unaffordable, seek free, impartial help from charities such as Citizens Advice.

Stock images by Benjamin Elliott, Jakub Żerdzicki, PiggyBank and Bebra Vkusnaia via Unsplash. Logos from Logo.dev.