Good news for those with a history of bad credit or little credit history – Aqua have launched a credit-building card which gives a 3% cashback reward for responsible borrowing.
By paying 3% on all card purchases annually, the innovative Aqua Reward credit card aims to help people become better borrowers.
People with bad or little credit history tend to experience a high level of difficulty when trying to borrow money through a personal credit card or a loan and often miss out on the best deals.
Credit builder cards are designed with this in mind and help those who want to repair a damaged credit rating or those who are new to credit.
The credit limit of the Aqua Rewards card varies depending on the circumstances of the individual but will fall between a manageable £250 and £1,600.
Providing the allocated credit limit is not exceeded and that monthly payments are made on time, owners of the card can obtain a maximum of £100 cashback at the end of each year.
The card also offers a number of other benefits such as a 24-hour helpline, text message payment reminders, online account management and free use of the card abroad – a far cry from the typically ‘no-frills’ nature of credit builder cards.
The APR offered is 34.9% which is available to the top 51% of applicants. However, by paying off expenses on time each month you shouldn’t pay any interest on borrowed funds.
The controversial nature of the card – which rewards responsible spending and account management – has been called into question, with fears that the offer of cashback might tempt card owners to overspend in order to claim a cash prize.
However, research shows that capping the cashback at £100 a year would actually stop people trying to spend more in order to make more, the lender claims.
The maximum cashback can be obtained by spending around £275 a month – thereby encouraging affordable regular spending – and is not payable if a credit limited is exceeded or a payment is missed.
Individuals whose credit rating has suffered due to the financial squeeze may want to consider rewards-based credit cards. These grant points every time a purchase is made on the card, which can be exchanged for discounts.
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