Tesco’s banking division has launched a new credit card aimed at first-time credit users interested in building their ratings. The card, which has an APR of 28.9%, is aimed at the hundreds of thousands of people with poor credit ratings who do not qualify for mainstream credit cards. Called the Foundation Clubcard, the new Tesco Bank credit card gives borrowers who would not otherwise be able to access credit a chance at building their credit histories while earning Clubcard points. Applicants must earn at least £5,000 per year in order to qualify for the card, which was an adjustable credit limit. In order to encourage responsible borrowing, Tesco Bank allows the card’s credit limit to be set at just £250. A Tesco Bank representative claims that the card could help first-time customers interested in improving their credit scores who did not have access to other credit cards. The card will compete with other first-time credit cards offered by Barclaycard and Capital One. Barclaycard offers a card called Initial with a 34.9% representative APR; Capital One’s Classic Preferred card has a 28.9% APR – the same as the new card offered by Tesco. The new card has been praised and criticised by credit card watchdogs. Andrew Hagger, of MoneyComms, claims that Tesco Bank is “giving customers an excellent opportunity to gradually improve their credit rating.” Online commenters have called the card an extortion attempt and usury aimed at vulnerable borrowers. Supporters of the card have also noted that it could result in a drop in the number of people relying on payday lenders. By giving access to first-time borrowers who have few other options, Tesco could build a “path to credit” for people that could end up indebted to high-interest payday lending companies.