yet i can be charged an interest and be punished if i don’t lend them money on time?

Yes, that's one of the reasons they work so well at quickly building up credit history for people with really bad credit to begin with. The credit bureaus see an actual loan, with actual interest, and actual required payments. If they didn't ding you for missing payments, then the credit bureaus wouldn't count it as a loan in the first place. There has to be some kind of pressure, consequence, and real-world stakes to missing payments to actually make it valid in their eyes, otherwise it's no different than a regular savings account you put money into whenever.

The entire point of it is to measure if you can be trusted to responsibly borrow or pay back money, they have to give conditions closer to actual loans to actually be considered in your credit score.

The trade is pretty simple, you give them some of your money, your credit score goes up. It might not be a good deal if you already have the ability to earn off a credit card, but these are mostly targeted at people who get rejected for any card they apply for. They're so low-risk for the company and so guaranteed that it's why they can offer them to basically anyone regardless of credit.

That said, I still would say secured cards are a better option, as nowadays there are cards where instead of it being like "give us a $200 payment and we'll give you a $400 credit limit with chances for increases later", it's "give us a $200 payment regardless of your credit score, and you can spend up to exactly $200, and maybe if your score goes up enough we'll give you the real deal".

The main problem with secured cards is that the way your credit score is calculated also calculates the % of your credit utilized. Higher is generally worse. So if you get a secured card, and the company offering it only allows you to start with $200, if you spend all $200, you'll actually get a smaller boost to your score than if you'd spent $50 out of the $200 and no more over the entire month, or spent $200 on credit builder loan payments, which counts as a full, outstanding debt, just one that you're regularly making payments on.

Again, this is why they are marketed to people looking to increase their score faster. You might spend more overall in interest, but you get a larger impact on your score than other options that factor in utilization, and they also tend to result in much larger increases over the same period for people that don't already have a line of credit, which is obviously good for... people who don't have access to credit and want to increase their score fast to get that access.

I wouldn't personally choose one, it makes no sense for my situation, but they are a good option if you are, generally speaking, unable to get other lines of credit, will spend close to the limit of a secured card, and/or need a higher score faster than you could otherwise slowly build it up.

It's only a scam if they tell you one thing and charge you another. If the terms are laid out in plain English and everyone agrees to the terms, it's not a scam, no matter how bad those terms are for you.

Can you name one thing in the US that isn't?

The bonkers part is the power people put in the score. The system largely takes care of itself, pay on time and score goes to good. Don't pay on time, score goes down. Have bankruptcies or foreclosures recently, score goes way down. If you have a reasonable income the score can go to great, if you have a mortgage or massive income you can get excellent.

Oh yeah, I've never heard of a credit builder loan with an ongoing date and cap. That's definitely not a credit builder loan 😭