Credit Building > Tesco Foundation Credit Builder Card review

Tesco Foundation Credit Builder Card review

Wollit Team2 minute read · Updated 1st July 2024

The Tesco Foundation Credit Card is a credit-builder card that lets you build your credit history while offering rewards for shopping at Tesco.

If you're often buying from Tesco and have a limited or poor credit history, this might be the card for you.

What are the pros of the Tesco Foundation Credit Card?

No annual fee: Most credit building cards come with an annual fee, but the Tesco Foundation Credit Card does away with it and is completely free to use. This means you can focus on making your payments on time and in full, without the added burden of an annual charge.
Lower APR than most other credit-building cards: Because it doesn't charge an annual fee, only interest, the Tesco Foundation Credit Card offers a relatively low APR compared to other credit builder cards, only 29.90% compared to the usual 35-55%.
You can earn Tesco Clubcard points: If you often shop at Tesco, you'll be able to earn Clubcard points on almost every purchase you make with the Tesco Foundation card. You can then redeem these points for a discount either at Tesco or at its partner stores.

The Tesco Foundation card has another handy feature: you can also check your TransUnion credit score right from the Tesco app. This saves you from having to open a Credit Karma account, which is what most people use to check their TransUnion score.

What are some of the cons of the Tesco Foundation Credit Card?

Despite its many advantages, the Tesco Foundation card still has a few downsides you need to be aware of:

Low credit limit. Depending on your situation, your starting credit limit can be anywhere between £250 and £1,500. This range is similar to most other credit-building cards but is still relatively low. If you want to improve your credit score, you'll have to keep your card balance under 25% of your credit limit. This can be pretty hard if your starting limit is on the small side.
Higher interest rates than regular cards. While the Tesco Foundation card has lower APRs than other credit-building credit cards, it's still much higher than what a regular credit card charges. See if you can qualify for a regular card first – or look into a secured credit card instead. You should also make sure to make your payments on time and in full, so you don't actually have to pay these interest charges.

Is the Tesco Foundation Credit Card worth it?

If you want to get a credit-building credit card, the Tesco Foundation card can be a great option: it has a flexible credit limit, charges no annual fee, and lets you earn Tesco Clubcard points. This is already more than most credit-building credit cards.

But you should still remember that this is a very high interest credit card compared to a regular one.

This means that if you miss a payment, not only will you be hit with extra fees, but you'll end up hurting your credit history instead of building it. Same if you accidentally max out your credit card, which is easy to do when your starting credit limit is as low as £250.

A safer alternative is downloading a credit-building app like Wollit.

Unlike the Tesco Foundation card, Wollit reports your monthly fixed fee subscription as a loan repayment. This directly builds your credit history (the main factor that goes into your credit score calculation) while keeping you safe from the risk of going over your credit limit or being hit with unexpected fees and interest charges that you’d get with a credit card instead.

As your credit score improves, this can open the doors for getting better cards and deals in the future.