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Asos launches a credit card - is it worth going for?
Asos has teamed up with Capital One to launch a credit card that can help you improve your credit score.
The Asos Credit Card isn't just for spending at Asos, it can be used with any retailer that accepts Mastercard and could be a better alternative than paying with 'buy now, pay later' BNPL schemes at the checkout.
Here, Which? takes a closer look at what the card offers, how it compares to other credit-builder deals, and how it differs from using BNPL schemes to pay.
What does the Asos Credit Card offer?
The Asos Credit Card offers a credit limit of £200 up to £1,500 depending on your circumstances and comes with interest-free spending on purchases for three months (as long as you make your minimum repayment each month).
It has a representative APR of 34.9% (variable) or 27.9% (variable) based on your individual circumstances. Credit is subject to status and terms apply.
Despite the distinct Asos branding on the card, there are no extra perks for shopping with Asos.
- Find out more:should I get a credit card?
Who is the Asos Credit Card aimed at?
The Asos Credit Card is suitable for those with a poor credit history.
When you use the card responsibly (ie making repayments on time and staying within the agreed credit limit) it will go on your credit report which can help boost your credit score.
Before you apply, you’ll have to complete an eligibility check on the Asos site. You’ll be given the credit limit and interest rate you’ll be offered, without it affecting your credit score.
To apply, you must be aged 18 or over and a UK resident. You'll need details of your income, any financial commitments and your address history.
- Find out more:how to improve your credit score
Who is Capital One?
Capital One is the lender providing the money on the Asos Credit Card.
So if accepted, you will use the Capital One app to manage your card.
Capital One also offers its own range of credit cards, including a credit-builder card designed to boost your credit score over time and a balance transfer credit card, which could help you save money on existing expensive credit card debt.
- Find out more: take a look at our Capital One credit card review and our round-up of the best credit card providers
How does the Asos Credit Card compare?
If you’re looking for a credit card to build up your credit score, there may be better options.
The best credit cards for bad credit currently have a lower representative APR of 29.4%, and some also give you added benefits like earning rewards on your spending.
If you’re drawn to the interest-free introductory offer, and you have a good credit score, you may be able to access a much bigger interest-free period. The best interest-free purchase credit cards have terms lasting as long as 23 months.
- Find out more:best credit card deals
How does the Asos Credit Card compare to using BNPL?
Asos offers a range of BNPL schemes at its checkout so shoppers may be keen to understand how that differs from using a credit card.
One of the key differences is that you don't get Section 75 protection on purchases when you pay with BNPL. This protection means your provider is jointly liable if anything goes wrong with purchases worth over £100 and up to £30,000 made on your credit card. If you experience a missing delivery or faulty product, for example, you can make a Section 75 claim with your credit card provider and get the money back this way.
Also, credit card borrowers can escalate a complaint to the Financial Ombudsman Service - an impartial body with legal powers - if there is an issue with the way the credit card provider has treated them. With BNPL borrowing issues, your complaint is handled by the BNPL provider.
Which? has been calling for urgent regulation of BNPL schemes for some time after uncovering that they encourage impulse spending and shoppers don't realise they are taking on debt. Although the government committed to regulating the BNPL market, it was reported in July that plans could be shelved due to concerns some of the biggest providers could leave the UK market.
- Find out more: 'Buy now, pay later' schemes explained
This article was updated on 2 October to correct the representative APR of the Asos Credit Card from 39.4% to 34.9%.
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