Cashplus Prepaid Card with Creditbuilder option

nick4brum

I am looking into one of these cards to help me build up my credit rating (I can't get a credit card etc.) However, it is not clear to me what is involved.
It says that obviously you have to load the card to use it and that the card has a monthly fee of £5.95 except when your available balance is zero. I assume therefore that if I do not use the card I will not have to pay any monthly fee.
Then there is the Creditbuilder option which says that they loan you £71.40 interest-free which goes towards paying for your first year's account fees and is not available to spend You pay this loan back in 12 monthly payments of £5.95, and our payments get reported to the credit reference agencies. If you pay all your monthly payments on time, you'll have shown that you can manage credit responsibly and this will help build your credit score.
Am I correct in thinking that if I do not use my card and just go for the Credit builder option, there will be no "available balance" I will not be charged anything, the loan will pay itself off and my credit score will go up?
It all sounds a bit too good to be true!

nick4brum

I have been onto their website and looked at FAQs which seems to say that the "loan" will go to pay off the cashplus card fees. However, if my understanding is correct, if I do not have any balance on the card then there will be no fees to pay, so what happens with the loan amount?

forgotmyname

The loan amount will be the balance wont it? Unless you pay for it in advance.

When you take out the card you owe them £71.40? Which is payable over 12 months at £5.95 a month. So you will have a balance of £5.95 every month whether you use it or not. You need to pay off that £5.95. So that will be the minimum topup just to have an active card.

Your "loan" of £71.40 needs to be paid monthly so they can report it to the credit agencies.

No balance = you default on your "loan". Got a link to where there wont be a charge if the balance is zero?

Or are you confused to the zero balance being no topup and spending on the card so you dont need to pay anything other than the £5.95?

nick4brum

Thank you for the reply
The information was in a link in "my offers" part of the Clearscore.com website. I don't think I can send the actual link because you will need my log in etc.
But I have copied this from the offer:

"Representative Example:
Amount lent by APS: £71.40 for 12 months, 0% interest. 12 monthly payments of £5.95. Total amount payable: £71.40. Representative 0% APR.

How Cashplus works

The prepaid Cashplus card looks just like a credit or debit card, and you can use it to shop online and in store as well as make payments and transfers. The difference is that you have to load money onto the card's account before you use it. The card has a monthly fee of £5.95 (except when your available balance is zero).

Creditbuilder Option

To build your credit rating, you can add the 'Creditbuilder' feature to your Cashplus card at no extra cost. When you add Creditbuilder, you are lent £71.40 interest-free which goes towards paying for your first year's account fees and is not available to spend. You pay this loan back in 12 monthly payments of £5.95, and our payments get reported to the credit reference agencies. If you pay all your monthly payments on time, you'll have shown that you can manage credit responsibly and this will help build your credit score."

I am probably just being daft, but it is not that clear to me. I think it is that they say no fee if no "available" balance and then also say that the loan is not available to spend. I thought it would be too good to be true to have a loan that pays itself off and improves your credit score at no cost?

tonytonyh

Just be a bit wary of APS Cashplus - I had a bit of an odd experience with them, posted it over here:

Forum thread: 71736314

Cheers
Tony

forgotmyname

No fee if the balance is zero, But in the first 12 months the balance will alwaysd be above zero. Starting at £71.40 and decreasing by £5,95 per month.

I think after month 12 the balance is zero and no charge. But in the first 12 months there will always be a balance because you owe £71.40 or £5.95 a month.

20aday

I've used the Credit Builder option in the past.

They loan you (interest free) £71.40 as mentioned above. It's not available to spend but so long as you repay £5.95/12 months it's reported to the credit agencies and builds towards a positive history.

I didn't load the card with money so never paid any fees in that aspect-I imagine you'll pay another £5.95/month if you load the card and use it for purchases etc.

dazzaofdagenham

Does this credit builder facility really work ?

To be honest I'd rather have the money in my account, rather than pay them for such a small loan !

Does anyone have experience of this card over the long term

[Deleted User]

It'll work in the sense of reporting stable behaviour to the CRAs, but it's very much an option of last resort.

20aday

Does the credit builder option work? Yes, it does-Santander approved me for their 123 credit card with a limit of £2,400 a couple of months later.

Ben8282

The credit builder option will be reported as a loan with payment terms of £6 X 12.months.
You must make sure that you have the necessary funds loaded onto the card by the day of the month that it is to be debited. You must make sure you do this as a late payment marker on a £6 monthly repayment really would not look good at all and would probably damage your credit report quite considerably.
I think this product is intended for individuals with no prior credit whatsoever to get their credit reports established, which it will do and probably more reliably than for example a utility account. I say that because I had one of these loans once and it is there in the settled accounts section of my credit reports with Experian and Equifax while my utility bills, e-on for electricity is shown only on Equifax and British Gas for gas is not reported anywhere at all, so at least the Cashplus loan is sure to be reported.
However, what actual benefit in terms of improving your credit rating such a loan will have I don't know. All you have done is proven that you are able to pay £6 a month for 12 months. Repaying a credit card or real loan would presumably have a better effect.