Aqua Card Interest hike

Top-ranking_Bug

I have had an Aqua credit card for 2 years, with an original credit limit of £250 and an interest rate of 29.71% APR.

My credit limit is now £2,500.

I have always paid off my balance in full each month with the exception of this month (£370, of which I have paid back £230 today, and the rest will be paid back within 14 days).

I have never borrowed more than £250 until this month

I have just received a letter hiking my interest to 33.18% with the reason "There were a number of factors that we considered ..... These included the way you managed and used your card, and the records held for you at the Credit Reference Agencies and other credit products you have."

I do not have any other credit products, not even an overdraft, and my credit rating on Noddle is 5/5 and 580/700 on ClearScore.

It seems I am being punished because I don't run up any interest!

20aday

Hello there,

First and foremost ignore the scores quoted by Noddle and Clearscore as they are not lenders.

I'm not sure which CRAs Aqua report to but I'd also obtain your £2 stat. report from Experian to make sure all of the data on there is factually correct (i.e. no one's stolen your identity to fraudulently open an account etc).

Have you used the MSE "Soft Search" tool to see if you'd qualify for a credit card elsewhere? If you are paying the balance in full each month then the card's APR doesn't matter (as you aren't paying interest) but if you've a decent credit history I'd consider another lender (personally).

darkidoe

It's up the the credit card companies' discretion when to change your rates for various reasons. We can only guess why. I suggest not spending beyond what you can pay for in full balance at the end of the month. However high the APR is would be irrelevant then.

Superscrooge

Always pay your credit card balance in full and you will be able to stick two fingers up at Aqua for raising your interest rate as it will have no effect whatsoever.

Top-ranking_Bug

Thank you to all of you for taking the time to respond - much appreciated.

I score 9/10 for most credit cards on the MSE Soft Search, and in 24 months I have only paid less than the balance owing on one occasion, and that balance will be cleared just 14 days after statement due date.

I do realise that because I pay in full every month, the APR doesn't really matter; it's just really annoying that I am trying to keep a good clean record and still they up the interest rate because of the way I supposedly run the account.

I will get an Experian report, thank you @20ADay.

chuckley

maybe it's just this one time you didn't pay in full.

although maybe it could've been worse and cut your limit...

or maybe they dislike the fact you use 10%...

Anthorn

Top-ranking_Bug wrote: »

I have had an Aqua credit card for 2 years, with an original credit limit of £250 and an interest rate of 29.71% APR.

My credit limit is now £2,500.

I have always paid off my balance in full each month with the exception of this month (£370, of which I have paid back £230 today, and the rest will be paid back within 14 days).

I have never borrowed more than £250 until this month

I have just received a letter hiking my interest to 33.18% with the reason "There were a number of factors that we considered ..... These included the way you managed and used your card, and the records held for you at the Credit Reference Agencies and other credit products you have."

I do not have any other credit products, not even an overdraft, and my credit rating on Noddle is 5/5 and 580/700 on ClearScore.

It seems I am being punished because I don't run up any interest!

How on earth did you get an Aqua card with 29.71%. The £250 credit limit related to that makes it all the more amazing: They don't trust you with a higher limit but they give you a lower APR.

Anyway, I've posted several times that with Aqua it's better to leave a small balance to allow them a small profit. You didn't do that and you have the result. They don't mind waiting for you to mess up and then they'll make their profit from the increased APR. Your credit history most likely also reveals that you are not a good prospect for their profit.

But really, if you are clearing the whole balance I don't see why you are concerned about interest.

m4rc

If you will be paying the interest on £370 it's going to be about £9, that's all they've ever made out of you for giving you their card so you haven't done bad, you have had a short term loan for under a tenner in additional costs!

At a complete guess I would say they simply don't feel you are a valuable customer, you don't make them any money, so they are going to up your interest rate. As you rarely pay interest don't worry about it, it won't have any impact on future borrowing from other lenders, just avoid Aqua I guess! The new rate is still comparatively low for Aqua, their starter rates are 49.9% so it's still cheap for them on a sub-prime card. If you made Aqua a little money then they would be decreasing your APR slowly each year as they increase your credit limit (not always how ey do it but often), I guess in your case you cost them money so they are not going to try to hard to keep your custom.

rus4r

My aqua card rate is 60% on cash 49.9% on purchases just this month after a default dropped off they have automatically reduced the rate my opening limit was £250 an after 6 months became £1500 my noddle has always been 1/5 always. I dont care about the rate since I always pay the balance off in full, personally I think you have done very well getting such a low rate with a bad credit credit card (aqua) in the first place. Question in my mind is if your score is 5/5 why dont you use eligibility checker an get a better credit card than aqua? rather than moan about £9 of interest since with your rating you should be able to get a great product with bigger credit limit an low interest rate.