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The 0% card that can improve your credit rating

Getting a credit card can be tricky if your credit history is non-existent, or not up to scratch. But don’t worry, help is at hand.

A new credit card aimed at people who either haven’t owned one before, or have a bad record of borrowing in the past has been launched.

The Luma credit card from provider Capital One is aimed at people who fall into the above category and allows them to build a good credit history.

What makes the Luma card stand out from other credit building cards on the market is that it offers 0 per cent interest on purchases in the first three months.

Typically, 0 per cent interest deals are reserved for credit cards aimed at those with a perfect credit history.

Benefits of a credit building card

The Luma credit card has a credit limit of up to £1.500 and has an annual interest rate of 35.9 per cent.

Nerys Lewis, head of credit cards at, says credit building cards can be beneficial for a number of reasons.

"By using a credit building card sensibly, this demonstrates to lenders, such as banks, that you can borrow and pay back money responsibly.

"This helps to build up your credit history, which is important as you have a better chance of being accepted for loans and mortgages.

"Deals like 0 per cent interest on purchases are really rare, which makes the Luma credit card a great option if you’re in the market for a credit building card."

Show you can borrow responsibly

There’s no such thing as one size fits all when it comes to credit cards. The best credit card for you will depend on your financial situation.

When applying for a credit building card it is worth remembering the annual rate of interest charged can be high.

But paying interest can easily avoided by spending on the card what you can afford to pay back each month.
Lewis says: "Using a credit building card to make purchases that you would be making anyway, such as the weekly food shop, is a good way to use it.

"This way you’re not spending extra just because you have a credit card, while showing the lender you’re borrowing responsibly."

Here is a round-up of other top credit building cards currently available.

Capital One Classic Visa

Capital One will consider applicants with a poor credit history, such as those who have had County Court Judgments (CCJs) issued against them for non-payment in the past.

This makes this card ideal for people who have put past money problems behind them and want to improve their credit history.

The Capital One Classic Visa has an annual rate of interest of 34.9 per cent.

Aqua Reward MasterCard

The Aqua Reward card offers 3 per cent cashback on purchases.

Again, this offer is rare among credit building cards as such offers are normally reserved for cards aimed at those with a perfect credit history.

If you spend £150 a month you could earn £54 back over the course of a year.

The Aqua Reward has an annual interest rate of 34.9 per cent.

Barclaycard Initial Visa

The Barclaycard Initial is aimed at first-time borrowers so it is ideal for those with no credit history.

Barclaycard will send customers a free text message alert five days before monthly payment is due.

This is a feature which first-time credit card customers may find particularly useful.

It has an annual interest rate of 29.9 per cent.

Check your credit record

Lenders use credit records to help them determine whether a borrower is a good risk, reserving their most attractive rates for those with the best credit.

Credit reference agencies ExperianEquifax and Callcredit give lenders a range of information about potential borrowers such as your job, salary, and any history of borrowing and repaying.

You can apply to any of these three agencies for a copy of your credit record. Read the Information Commissioner's Office guide to credit reference agencies.

You can use our our free Card Matcher tool to check your likelihood of acceptance for a credit card before you apply.

Compare credit cards

Compare cards for anything from balance transfers to credit cards for people with bad credit.

Cara Credit Card

Find the right credit card for you

Our free Credit Card Matcher tool is easy to use and it can really help find the best card for you

  • See how likely you are to be accepted
  • Leaves no record on your credit profile
  • Find the card that's right for you - easy!

Adam Jolley

Adam Jolley

Adam Jolley is a content producer at He joined us in May 2012 from the world of financial services PR.

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