As many as 25 percent of UK residents have a poor credit rating, which can make it difficult to get a credit card. A bad credit rating can result from overspending or unforeseen financial difficulties such as health issues, divorce, or redundancy.
Arrears, defaults, County Court Judgments (CCJs), late or missed payments for loans or credit cards, and debt management efforts like Individual Voluntary Arrangements and bankruptcies can take their toll on credit history.
When consumers apply for credit cards, providers review records maintained by consumer credit reference agencies. These organizations keep consumer credit histories updated and maintain records of late payments for three years and of debt management techniques like CCJs and bankruptcies for six years. Nothing seems to miss the watchful eyes of credit reference agencies, much to the disappointment of many UK consumers.
Despite having a poor credit history, some consumers qualify for credit cards. The terms are not usually the most attractive, characterized by low credit limits and high interest rates. However, using these responsibly and making repayments in full and on time each month can help rebuild the credit score, paving the way for more attractive offers in the future. The goal should be to make the credit history more positive so lower-interest credit cards become available for use.
Aqua offers a MasterCard with a maximum credit limit of £1,600 and 32.9 percent representative variable APR
The 51-day interest free period makes it easier for consumers to repay balances in full and the £0 minimum income requirement allows more UK consumers to qualify.
Aqua also offers a Reward MasterCard with a 34.9 percent variable representative APR and £1,600 credit limit. The reward program entitles the cardholder to three percent cash back on all purchases, as long as credit limit is not exceeded and payments are made on time.
The Aqua Advance card features a 34.9 percent variable representative APR, with the potential to reduce the interest rate by 15 percent over three years. Those who use this card most responsibly will have an APR of only 19.9 percent after three years. They will not need to switch to another card unless they spend more than the £1,600 limit.
The Capital One Classic Card features a 34.9 percent variable representative APR and £1,500 credit limit. There is no minimum income required to qualify and cardholders receive a 56-day interest free period. By registering for email alerts, cardholders with past defaults or CCJs can control their spending, getting themselves back on track in a short time and without taking drastic measures.
Credit card interest rates change frequently and new providers are entering the market so consumers should review the offerings frequently to find the best deals. Getting a credit card with the lowest interest rate and highest limit should be the goal.
By using the card for affordable purchases and repaying the balance on time and in full each month, consumers are able to improve their credit rating in a short time, making bad credit a thing of the past.
