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Is the Zopa credit card any good? Here are the pros and cons

Is the Zopa credit card any good? Here are the pros and cons
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Since launching in the UK more than 15 years ago, Zopa has established itself as a respected provider of peer-to-peer lending and personal loans. So now that the Zopa credit card is available, I wanted to take a look at how it stacks up.

How does the Zopa credit card work?

The Zopa credit card is available to UK applicants aged 18 or over. To be accepted for the card, you must meet Zopa’s eligibility criteria. While Zopa does not reveal its acceptance criteria, the lender does have an eligibility checker on its website. This means you can determine whether you’ll be accepted without the check impacting your credit score. 

The Zopa credit card comes with a hefty 34.9% representative APR. However, if you have a decent credit score, you may be offered a lower 9.9% APR. Initial credit limits vary from £200 to £2,000.

The Zopa credit card can be managed via an app that comes with a number of decent features, such as instant spending notifications, the option to view your PIN within the app and the ability to freeze your card.

Aside from these features, the card also offers fee-free spending abroad. However cash withdrawals – both at home and abroad – attract a £3 charge.

On its website, Zopa also says that its credit card comes with ‘human’ support. This may appeal if you aren’t a fan of automated customer service.

What are the pros and cons of Zopa’s card? 

Despite being the world’s first-ever peer-to-peer lender, Zopa’s new offering won’t revolutionise the credit card market. However, there are a few benefits of the Zopa credit card.

What are the benefits?

First of all, I like the fact that Zopa’s plastic comes with a number of useful features. Too many existing credit card providers lazily rely on old-fashioned practices, such as requiring you to speak over the phone to reset or view your PIN, usually after going through several steps to prove your identity. Zopa allows you to view and reset your PIN in its app, so you won’t have to face this laborious process.

I also welcome the fact that the Zopa credit card has instant spending notifications. This means that if your card is ever used fraudulently, you should be able to spot it straight away. This will save you the pain of discovering it a few weeks down the line on your monthly statement.

On a similar note, I also welcome the feature that allows you to freeze your card instantly. Anyone who has ever temporary misplaced a card will appreciate the tricky decision in determining whether you should completely cancel a card, or wait until it (hopefully) makes an appearance somewhere obvious. 

Aside from the practical features of the app, the offer of fee-free overseas spending is a decent side feature that shouldn’t be ignored. That’s because you won’t be stung when you use the card abroad, as long as you don’t make many cash withdrawals (which incur a £3 fee each time).

Are there drawbacks? 

The main drawback of the Zopa credit card is the fact that it doesn’t have a 0% interest-free period. This, alongside its hefty 34.9% rep APR, means anyone who doesn’t clear the card each month will face hefty interest.

In contrast, some specialist purchase credit cards offer 0% periods of up to 23 months. Therefore, if cheap borrowing is something you’re after, then you should probably look at other cards.

How does the Zopa credit card stack up? 

The Zopa credit card is essentially a credit card targeted at those looking to improve their credit score.

‘Credit rebuilder’ cards are typically easier to be accepted for. These cards allow you to improve your credit score if you use them correctly. This means that if you only use them for normal spending, clear your balance each month and never go over your spending limit, you should see an improvement in your score within six months or so. 

Right now, there are several credit rebuilder cards available, with the Capital One Classic Complete (34.9% rep APR) currently at the top of the tree. That’s because the card has a four-month 0% spending period that can provide respite from any existing debts.

Alternatively, the Amazon Classic credit card (29.9% rep APR) offers a shorter three-month 0% interest-free period, but you’ll receive a £40 Amazon gift card if you’re accepted.

For more options, see our list of the top-rated credit cards for bad credit.

Any opinions and statements are solely those of the author, and although the opinions expressed may be shared by The Motley Fool, they have not been provided or endorsed by any other party, except where expressly indicated. Although the information provided is believed to be accurate at the date of publication, you should always check with the applicable product provider to ensure that information provided is most up to date.

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Any opinions and statements are solely those of the author, and although the opinions expressed may be shared by The Motley Fool, they have not been provided or endorsed by any other party, expect where expressly indicated. Although the information provided is believed to be accurate at the date of publication, you should always check with the applicable product provider to ensure that information provided is most up to date.