aqua credit cards: can they really help rebuild credit?
Holding any credit card, or loan, or any other credit commitment, can help people with a less than perfect credit history to build or rebuild their credit record.
The problem, for those with credit problems in their past, is getting accepted for credit in the first place.
In this review we look at aqua credit cards, a provider that claims to accept applicants that might be rejected elsewhere and, even more important, says they can help to rebuild credit reports in ways their customers can really see.
Do their claims stack up?
aqua application criteria
Let's start by looking at the sort of applicants that expect to be accepted by aqua (the lowercase 'a' is part of their brand name, not a typo, by the way).
All of their three card deals sell themselves as products for people who may have been turned down elsewhere. There is a fairly long list of who they'll consider, including people who are:
- Self employed, with difficulties proving regular income;
- Working part time or on a low income;
- Recently moved or not on the electoral roll;
- New to the UK or
- Affected by previous poor credit, including County Court Judgements.
That doesn't mean that all applicants will be accepted, however.
As with all credit card providers, there are no guarantees: aqua assess each application individually.
In particular, to be accepted for an aqua credit card, applicants must:
- Be over 18;
- Have a permanent UK address;
- Have a current bank or building society account;
- Have not been registered bankrupt in the past 18 months or have proceedings against them and
- Have not received a County Court Judgement (CCJ) for non payment of debt in the past 12 months.
Providers like aqua have become particularly popular since 2008 when mainstream providers - i.e. the high street banks and building societies - made it much more difficult for those with a poor history of whatever kind to be accepted for their borrowing products.
In 2014, it is easier than it was a few years ago for people with poor histories to get products from those mainstream providers but aqua are right that people that fall into the categories above are more likely than most to face a rejection.
Credit rebuilding: what's on offer?
Simple access to credit is aqua's strongest selling point, then.
However, they also market themselves heavily as credit building.
That means that they're not suitable borrowing over a long period - interest rates are high - but they are useful because, when they're well managed, they'll show up as a responsibly managed credit commitment on a credit report.
As we noted above, interest rates on aqua cards are high.
For full details of the cost of the credit see below.
Note that the advertised interest rate varies between the cards: here's another.
aqua also have a cash back card called the aqua Reward credit card (cost of credit) which, again, has a different interest rate.
As we said, these rates are high.
Setting up a direct debit to repay the full balance is a sensible way to ensure only what is affordable is spent each month.
Not all providers are totally forthcoming with the ability to clear the full balance automatically by direct debit though but it can be done and, indeed, is a key part of managing credit responsibly which should be the main concern of anyone applying for these cards.
Credit building help
Just managing the card responsibly could improve a borrowers standing in the eyes of lenders looking at their credit report in the future.
That benefit is hard to see, however, so aqua also offer a few promises that cardholders will be able to see.
As we update this article, those are:
- aqua Classic: the credit limit (between £100 and £1,200 on application) could increase after four months.
- aqua Advance: reduce the card's rate of interest by 5% each year for three years, as long as the account is well managed.
Both could be useful as motivators but it's important to note that neither will significantly improve a cardholders standing in the eyes of future lenders.
Even with these 'offers', credit limits will stay fairly small and interest rates will stay fairly high.
Although these are nice extras, these cards are perhaps better seen as stepping stones to better products. Either way, managing them well is the most important point here.
In addition: protection on purchases
All credit cardholders are protected under section 75 of the Consumer Credit Act. The law means that the credit provider is held equally liable with the supplier for purchases over £100 where the item is faulty, arrives damaged, is undelivered or the supplier goes bust.
For more information on the protection offered under Section 75 see our guide.
The cards also offer an active fraud monitoring service and access to MasterCard SecureCode (3D Secure) a password system to increase security when shopping online with participating retailers.
The aqua credit card account can also be managed online - so it's easy to keep check on transactions throughout the month.
All in all
The main purpose of aqua credit cards is to build up a new, or improve a past damaged, credit profile.
For more on how to repair a credit rating see our guide, but basically put these cards offer more accessible credit that can provide a way to build up positive marks on a credit report for future lenders to see.