Sub prime cards to get cashback for the first time

Posted in 'Personal Finance' by Barry Stamp

20 June 2012

Sub-prime card issuer SAV Credit, which runs the aqua card, is extending the range of its cards available to UK consumers.

The aqua Reward card and the aqua Advance card now offer fringe benefits to cardholders who have had, or are having, problems getting credit. aqua cards generally carry a much higher interest rate to reflect the risk of taking on customers with an impaired credit history and the card limits are usually much lower than usual, (the maximum credit limit is only £1,600).

The cards are intended to enable sub-prime customers to rebuild their credit history, and not be denied basic credit card facilities.

The aqua Advance card offers reductions in the published interest rates of 5% each year for three years providing contractual minimum payments are met on time and also providing that the credit limit is not exceeded. So those who keep a clean repayment record on the aqua Advance card can expect to pay an interest rate of 19.9% APR after 3 years, with annual step downs of 5% from the intial APR of 34.9%.

In a market leading move for sub-prime cards, the aqua Reward credit card gives an annual cash back of 3% paid on all net monthly retail spend, capped at £100 a year.

SAV's Chief Executive Officer James Corcoran says, "Advance provides a clear route to a strong credit record and competitive rates for people who have had problems while Reward ensures they have the ability to earn cashback on everyday spending on their credit card."

aqua currently has a cardholder base of around 500,000, and with balances at £500m overall, the average amount outstanding on an aqua card is £100. The company has been operating in the sub-prime market in the UK for approximately 10 years

Barry Stamp is a co-founder of Checkmyfile and is a Chartered Banker and a Fellow of the Institute of Credit Management. He can be contacted at barry.stamp@checkmyfile.com.