A new creditbuilder function developed by Advanced Payment Solutions (APS) and endorsed by the Consumer Credit Association, will offer financial redemption for the 8 million plus UK consumers suffering from a bad or no credit rating.
The first service of its kind in Europe, creditbuilder is a new feature of APS's cashplus prepaid gold MasterCard which comes at no extra charge and without any interest, late, or early settlement fees.
The service was developed following repeated requests and consistent feedback from customers who were looking for help in rebuilding their credit and learning how to use credit responsibly. With bankruptcies, involuntary arrangements and missed repayments continuing to rise, there is a growing and real demand for such a service.
Creditbuilder is delivered with the cashplus prepaid gold MasterCard. The standard monthly fee is advanced up-front for the year and then each month the loan is 'repaid' by the cardholder with a £4.95 monthly instalment and reported to the leading credit rating agency. At the end of 12 months the loan with APS will be cleared and would count towards building or improving the customer's credit rating as a satisfied loan. No interest or administration charges will apply for the loan, which can be settled at any point.
Advanced Payment Solutions founder and Chief Executive Officer Rich Wagner says: "Our data shows provided the customer pays on time and fully settles the creditbuilder loan, and behaves responsibly with other credit products their credit rating will improve.
"We have responded to strong demand from cardholders and consumer advocacy services and worked out a way to deliver a creditbuilder function without costing the customer any more than what they already pay."
"This is a simple way of ensuring people can make regular payments for a year and demonstrate an ability to pay bills on time," says Mr Wagner.
The Director of the Consumer Credit Association (CCA), Jack Bennett, says: "This is an excellent initiative, with no extra charge. The CCA encourages the development of alternative financial services that can help people rebuild their lives and change their spending patterns. The card doesn't require applicanticants to have a bank account or to undergo a credit check so this is a sensible and affordable solution which also gives cardholders access to a card they can use online and abroad, with purchase protection."
Myles Davidson, Managing Director of independent prepaid card comparison site What-Prepaid-Card (formally Which-Prepaid-Card) says: "One of the most common questions we receive about prepaid products is 'Can they rebuild my credit rating?'. APS has succeeded in delivering a solution to address a real need in the UK market. Previously consumers had little option but to apply for a specialist credit card, with high interest rates, geared for lending to customers with bad or no credit history. We are particularly pleased APS has chosen to give this to consumers as a free feature, like its purchase protection, when they could have charged a premium for it."
Chris Reddish, Global Product Head of PrePaid Europe at MasterCard says: "We believe the solution created by APS is one of the most innovative products we have seen in payments industry for some time. It truly helps customers wanting to repair and improved their credit standing."
Creditbuilder is in addition to the many benefits already provided by the award-winning APS cashplus prepaid gold MasterCard, which helps customers control their spending. Applicants do not need to undergo a credit check or have a bank account and can use their cards at over 25 million merchants and in over 1 million ATMs worldwide. APS also voluntarily provides consumer purchase protection in line with what is required of traditional credit cards under section 75 of the Consumer Credit Act.