New Aqua Credit Card Interest Rates Letter

TheGenerus1

I recieved a letter today from Aqua stating that my rates are increasing.

Purchases - Current = 35.95%, New = 44.95%
Balance Transfers - Current = 32.95%, New = 44.95%
Cash advances - Current = 39.95%, New = 49.92%
Credit card cheques - Current = 35.95%, New = 44.94%

Their reasoning behind the interest rates hike was quote:-

"We continually review all accounts, in line with the T&C, to ensure we apply the most appropriate interest rates, depending on your personal circumstances and the wider economic situation. There are a number of factor we consider when setting your interest rate. This can include the risk and cost of lending money, the economic environment, the rules and regs that govern the way that we manage credit cards and the way that you manage your credit card and other credit you have".

They then went on to say that this will be effective from June and that I can call in and stay at my current rate but in doing so, they would close the account and arrange suitable payments for me to make within a reasonable period. I will not be able to use the card again.

I have had the account for 2 years and have never made a late or missed payment (all green ticks for the 24 months).
The original credit limit was £450 and rose to £700 4 months later. I have been stuck on £700 limit for one and a half years now with no increase. Granted, I have only made more then the minimum payment for over half a year now hoping that that would help with an increase, but still no joy and now this letter.

Could anybody let me know if by me paying more than half the balance off on the Aqua account, it would be more likely that I would get a limit increase if I requested one on their website (never made a limit request on the account before).

I believe that the computer only takes into account the management of the account in the last 6 months when the computer considers an increase and that the check is internal only (this was verified by two Aqua customer service agents I spoke to yesterday).

I made them check for any abnormalities in the way I conducted the account in the last six months, they replied that they could not see any problems with the way I conducted the account). They told me that they could put in for the increase with an amount I'm requesting and the computer will either say decline, granted or maximum they are willing to grant.

I am holding off for applying for the increase until I get confirmation from someone that by me reducing the Aqua balance to about 35% of the limit that this should increase my chances of getting an increase (I'm at about 80% utilization at the moment).

Before anybody says "why on earth would you want to increase your limit an a card with such a high APR"

I thought that it might look better on my report as I want to apply for Prime card and thought that it would look better on my report when lenders see it (the low limit might indicate to them this is a subprime card therefore must be a subprime candidate. I would then pay off the balance and close the account down a month after the increase is given (so it shows up on my credit report).

My total utilization is 40% across all my accounts inc catalogues (not sure if mail order accounts go towards available credit ratio like credit\store cards do, please can someone clarify this for me as I have been told it does as it is also classed as a revolving account).

I have other subprime cards apart from Aqua -
Vanquis - £1750 limit, 2 years, All greens
Capital One - £1500 limit, 2 years, All greens
Monument - £1200 limit, 9 years, All greens

I have mail order accounts -
Littlewoods - £1300 limit, 7 months, All greens
Very - £1300 limit, 7 months, all greens

I have a current account-
Natwest - 9 years - all greens showing

I also have a 12 month credit builder loan with APS I took out which finishes this month (12 payments of £5) - all green.

I thought with all this payment history coupled with the following-

Electoral Roll - 19 years
lived at address - 35 years
Salary - £25,000 (30% credit usage in available credit to me at present).
No CCJ's and no defaults

All this and I still can't manage to get on the prime ladder.
I have done 2 searches in the last 6 months:-

1. Halifax balance transfer card so I could transfer my 40% utilization balance off my existing cards

2. Capital One progess card

Both got the 7 -10 days message and then declined letter.

I thought that having a credit history spanning 9 years with no late or missed payments all green on every account and no adverse or incorrect data that this would get me on the prime ladder by now (people on this site have managed to get on the prime ladder with just 6 months of regular payments on their subprime cards).
I have tried opening a variety of account types as well, credit\store accounts, mail order accounts, current account, loan account and still I'm turned down for even a Capital One progress card.

What am I doing wrong??

Please could I get some advice and answers to the questions I have. Also can anyone advise me of what is the best balance transfer card for me to get in my circumstances.

Also please let me know if anybody else out there has recieved this letter from Aqua as well as how they have conducted thier accounts if they have recieved this letter.

Sorry for how long this post was.

Many Thanks

Tixy

Fairly standard APR hike letter - no necessarily down to anything you have or haven't done.
You can opt out of it if you wish as they've said.

The lack of a credit limit increase for some time is likely down to how you have run the account / the balance held, the payments you made etc.
It possibly that reducing a chunk off your balance will mean you'll be more likely to be accepted for a limit increase, but by no means would it be certain you'd be accepted for one.

I'm not convinced that upping the limit will make a positive difference to other potential prime lenders. They don't necessarily care if your last credit card was a subprime one - what they care about is whether you've demonstrated the ability to manage your account, keep within the limit and pay on time.

Upping this 1 card limit when you already have 3 other credit cards doesn't sound like its going to be a magic button to getting a prime card compared to not getting the limit increased.

In fact the opposite could also be an issue - you have 4 open credit cards, which could potentially be seen as a negative when you want to open another.

In terms of why you are being declined
Have you checked copies of your credit file with all 3 credit reference agencies?

On all your debts - do you pay the minimum payment each month on most or all? or do you always pay more than the minimum on all?

You say

I have tried opening a variety of account types as well, credit\store accounts, mail order accounts, current account, loan account and still I'm turned down for even a Capital One progress card.

When were all these searches? how long after these did you try applying for the halifax or cap 1 cards?

In terms of balance transfer cards - could possibly give creation a shot - these are easier to get than most others.

Davie2909

I got the letter and decided to close the my aquacard the girl was really good and agreed with my decision

TheGenerus1

Tixy wrote: »

I'm not convinced that upping the limit will make a positive difference to other potential prime lenders. They don't necessarily care if your last credit card was a subprime one - what they care about is whether you've demonstrated the ability to manage your account, keep within the limit and pay on time..

I thought that seeing as I have not had an increase in a year and a half nor have I ever requested one on my Aqua account, that getting one wouldn't hurt as it would look better on my credit file showing £1500 instead of £700, Especially seeing as I have had the account 2 years. I will be closing the account anyway regardless of being granted a limit increase, but thought heyho if I can get the increase than that would make my report look that touch better when the limit shows on my credit reports.

Tixy wrote: »

In terms of why you are being declined
Have you checked copies of your credit file with all 3 credit reference agencies?

Yes with all three credit agencies. All have the same data which I have checked and is free from errors, ccj's,defaults, late and missed payments. All accounts are green

Tixy wrote: »

On all your debts - do you pay the minimum payment each month on most or all? or do you always pay more than the minimum on all?

For the last several months I have been paying more than the minimum on all my accounts wih some accounts paying more than £100 more, some paying £40 more some paying £20.
I believe that I have been making good payments in the last several months, so much so that Vanquis in the last 6 months have raised my limit twice in this period. This was previously stuck at £250 for one and a half years. They raised it to £1000 in November then to £1750 this month.

Tixy wrote: »

When were all these searches? how long after these did you try applying for the halifax or cap 1 cards?

Searches done:-

Vanquis - 2 years ago
Aqua - 2 years ago
Capital one classic - 2 years ago
Monument - 9 years ago
Natwest current account - 9 years ago
APS credit builder loan - 1 year ago (next month)
Littlewoods - 6 months ago
Very - 6 months ago

I applied for the Halifax card and Cap1 progress in November 2011.

I got my credit reports before I applied and the only entries under searches were the 2 mail order catalogues I applied for above which were approved (searches only showed on equifax report).
Experian had no searches done prior to these 2 cards applications. (I think one card company used experian and the other used Equifax)

This means that my Equifax report now shows 2 mail order and one credit card application (Halifax card) done within a 6 month period.
My Experian report now shows one credit application (the Cap1 Progress).

Tixy wrote: »

In terms of balance transfer cards - could possibly give creation a shot - these are easier to get than most others.

Thank you Tixy I will try Creation. I believe Creation use Experian for credit check is this right?
As I have one search already on my experian report done 4 months ago, do you think I should wait a couple of months till 6 months is reached before applying for the Creation or do you think I could apply for it now as many people have said that 2 seaches in the last 6 months is OK.

TheGenerus1

Davie2909 wrote: »

I got the letter and decided to close the my aquacard the girl was really good and agreed with my decision

How long did you have the account?
What was your limit?
Have you ever had any limit increases?
How did you conduct your account, full payment, minimum payments, more that minimum payment, did you have a large balance etc...?

Tixy

I'd probably try applying now for creation as you've only had the odd recent search. Hopefully the fact that you've now been paying more off the debt in the last few months and won't have minium payment markers on your file will help.

I thought that seeing as I have not had an increase in a year and a half nor have I ever requested one on my Aqua account, that getting one wouldn't hurt as it would look better on my credit file showing £1500 instead of £700, Especially seeing as I have had the account 2 years. I will be closing the account anyway regardless of being granted a limit increase, but thought heyho if I can get the increase than that would make my report look that touch better when the limit shows on my credit reports.

I still don't think having an extra say £800 credit available to you will make the slightest positive difference to being accepted. In fact given that you already have £7750 credit available in total to you, its even possibe it could go against you, or against how much limit you might be given if accepted for a new card.

As an overall comment there is no magic formula for amount of credit available, debt to credit ratio, number of accounts or % of limits used etc that you seem to be trying to achieve.
There are some basic guidelines its possible to try to follow but different lenders look for different criteria and none publish these.

You could have an identical credit file to another person, and earn the same amount and still find 1 of you is accepted for a credit product and the other is not.

TheGenerus1

Tixy wrote: »

As an overall comment there is no magic formula for amount of credit available, debt to credit ratio, number of accounts or % of limits used etc that you seem to be trying to achieve.
There are some basic guidelines its possible to try to follow but different lenders look for different criteria and none publish these.

Thanks for the reply Tixy, I will close down the Aqua account first and then try for the Creation balance transfer Card.

Creation have 2 balance transfer cards:-

17months at 16.9% & 12months at 18.9%

Difference I think is that you have to have an income of £20,000 to apply for the 17month card and of course 2% less APR.

I meet the criteria for both, but was thinking to apply for the 12months as it may be easier to get. Am I correct in saying this?

If I go for the 17month card, do you think they may offer me the lower card if I get rejected for this one?

Lastly, do you know the answer to one of my previous questions:-

"Not sure if mail order accounts go towards available credit ratio like credit\store cards do, please can someone clarify this for me as I have been told it does as it is also classed as a revolving account".

Again many thanks for you quick responses Tixy.

Tixy

I think in terms of them considering your affordability - yes they will look at how much credit you have on mail order accounts just the same as on credit cards.

Davie2909

TheGenerus1 wrote: »

How long did you have the account?
What was your limit?
Have you ever had any limit increases?
How did you conduct your account, full payment, minimum payments, more that minimum payment, did you have a large balance etc...?

Went from £350 to £850 then stayed at that till i closed it.
My account was perfect the woman actually commented on how well it had been run
Balance was about £700 but that was paid off before canceling

alfred64

Aqua have upped their rates to quite a lot of people.
I closed my account with them 18months ago and have moved on, but a friend of mine has rates of 39.9% which are due to rise to 45.9% and for cash to 49.9%. I think he will cancel.
Aqua is fast becoming the new vanquis, I feel.

Davie2909

alfred64 wrote: »

Aqua have upped their rates to quite a lot of people.
I closed my account with them 18months ago and have moved on, but a friend of mine has rates of 39.9% which are due to rise to 45.9% and for cash to 49.9%. I think he will cancel.
Aqua is fast becoming the new vanquis, I feel.

Totally Agree :T