Aqua Classic: rate on top card for bad credit borrowers to increase

The Aqua Classic is a market-leading card for borrowers with bad credit ratings. But time is running out if you want to get it at its cheapest.

One of the best credit cards tailored for borrowers with poor credit records is to be revamped on 4th March to offer a higher APR.%VIRTUAL-SkimlinksPromo%
That leaves just a couple of days for borrowers to snap up the Aqua Classic MasterCard, which boasts no annual fee and comes with a representative APR of 29.7% for now. By next Tuesday that rate will jump to 32.9%

You get an initial credit limit of between £250 and £1,600. That may be increased after four months, if you've shown that you can manage your credit well.

The lowest APR
The Aqua Classic MasterCard offers the lowest APR available on cards for borrowers who have something of a patchy credit history. 29.7% seems a high interest rate, and compared to the best cards on the market, it is.

But it's par for the course for these cards to charge higher rates; it's how the providers cover themselves for taking the risk of lending to people who have a history of not paying back their debts in a timely way.

It's worth bearing in mind that these APRs are only representative – the rate is only offered to 51% of successful applicants. So if your credit record has a fair few black marks on it, you may be offered a higher rate.

Free credit ratings for life
Aqua has also just started offering borrowers free credit ratings for life thanks to its partnership with Noddle. You get free, unlimited access to your credit report, and your credit rating is updated monthly, so you'll soon start to see the benefit of using the card properly in your rating.

How it compares
The Aqua offers an interest rate only marginally better than its nearest competitor, the Aquis Visa from Vanquis Bank. This card comes with an APR of 29.8% - just 0.1% more than the Aqua Classic.

You start with a credit limit of up to £1,000. However, what I really like about the Aquis Visa card is that it regularly rewards you for managing your money properly. On your fourth statement you can get a credit limit increase, as you can every subsequent four months, up to a maximum of £3,000.

There's not a huge amount between the cards in my view.

The Barclaycard Initial Visa isn't far behind either, with a rate of 29.9%. This card is more for people with no credit history rather than one with a few black marks, though.

Cards that offer a little more
Up until fairly recently, the bad credit market was a fairly dry place, with the only variety coming in the different APRs on offer. Now though there's a little more innovation. In the last year we've seen cards that offer reducing APRs, 0% cards, even cards that pay cashback on your spending!

For example, I really like the idea of the Aqua Advance MasterCard, which gives you the chances to lower your rate by 5% a year for three years.

So you start with an APR of 34.9% and a credit limit of between £250 and £1,600. So long as you show that you can manage the credit responsibly, you can cut that rate down by 5% a year for the next three years, leaving you with a very competitive rate of 24.9%, not that far off what the best cards charge. I think it's a clever way of rewarding people who have struggled with credit in the past to keep on top of their repayments.

Sadly, the 0% and cashback cards have disappeared but I wouldn't bet against them reappearing sometime soon.

Tax tricks to improve your wealth
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Aqua Classic: rate on top card for bad credit borrowers to increase

If you wear a uniform of any kind to work and have to wash, repair or replace it yourself, you may be able to reclaim tax paid over the last four years. For some people, this could mean a windfall worth hundreds of pounds

The interest you receive on savings accounts (with the exception of cash Isas) is automatically taxed at a rate of 20%.

Higher-rate taxpayers therefore tend to owe money on the interest they are paid throughout the year. If, however, you are on a low income or not earning at all, you should be able to claim all or some of the tax deducted back

You can apply for a refund of vehicle tax if you are the current registered keeper or were the last registered keeper of your vehicle that no longer needs a tax disc

If you pay tax on a company, personal or State Pension through PAYE (the system employers use to deduct tax from your wages), you may well end up overpaying

There is a limit to the amount you need to pay in NI, whether or not you work for an employer.

Instances in which you may find that you have overpaid include if you work two or more jobs and earn more than £817 a week and if you move from self-employment to employment, but continue to pay Class 2 National Insurance contributions

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