Should I get a credit card?

bitterSTAR

Voyager2002 wrote: »

For credit cards, look at Egg Money

Egg Money is not currently available to new customers.

mcspanna

If you are just looking to build up a good credit score then our financial adviser recommended my OH get a credit card but only spending a small amount on it each month (ie £20) and paying it off in full each month like the other posters have said. For example we usually go out for a curry once a month and paid for just this on the card each month. OH's credit score was boosted and the spending didn't get out of control, he had the direct debit set up to go out for the full balance each month.

On the other hand I have the larger income (and therefore most of the spending) and pay for all of our petrol food etc on my card which usually comes to around £400 a month, again this is paid off in full each month so that we don't have any interest to pay. I have done this since I was 18 (over ten years ago) and I have never had a problem with my credit score.

nalibz

I assume I should get the Amex Cashback card then if I'm going to be paying off in full every month right?

bitterSTAR

nalibz wrote: »

I assume I should get the Amex Cashback card then if I'm going to be paying off in full every month right?

Yes, that is the exact card I've got! In my case I ensure that I do ALL my usual spending on it - maximising the cashback I earn. One thing to note, is that you will not be paid any cashback until your 12/13th statement - as it's paid on a yearly basis.

I have found that not all retailers accept it, but most do. Such as tesco, morrisons, amazon, national rail, topshop/topman, holiday inn etc.

bitterSTAR

Another thing to consider about the ISA: A lot of banks offer a high introductory interest rate for the first 12 months after opening a new ISA ie. they may give you interest at 6% and then after 12 months it drops to 5%.

As you are able to transfer whole ISA balances between providers without losing anything, you could switch from one bank to the next every 12 months to make full use of each banks introductory interest rate. It does involve opening a new ISA account every year, but you'd get around 1% extra interest each year that you switch.

If you were going to do this I'd look for an ISA account that pays interest on a monthly basis if possible. And ensure you do the switch once you've been paid a sum of interest - the worst moment to switch would be the week before you were due to be paid some interest. Plus, there is no point in switching unless the new interest rate will be higher than the standard rate that your current ISA has dropped to.

bitterSTAR

Before you apply for a credit card though, you MUST ensure you are on the electoral register/poll under your current address - as this will then show on your credit record (which is good). Without doing this your credit check will most likely be rejected.

Also, do not be disheartened if a credit card company rejects you for a credit card - as this is your first credit card you do not have much of a credit record yet, and some providers are cautious about people who have no track record of being able to manage money (ie. those who are bad with money, and those who are good with money but have no record/proof).

If you get rejected on your first application, apply somewhere else. But if you get rejected 2 or 3 times, then wait 6 months and apply for more then. If you find it hard to get accepted for a mainstream card then try a sub-prime card (such as Barclaycard Initial) these have high interest rates and low credit limits, but that won't matter if you pay the full amount each month - and once you've been with a sub-prime for a year then apply for a mainstream card. (Sub-prime cards are there to help people improve their credit rating if it's low).

nalibz

bitterSTAR wrote: »

Before you apply for a credit card though, you MUST ensure you are on the electoral register/poll under your current address - as this will then show on your credit record (which is good). Without doing this your credit check will most likely be rejected.

Also, do not be disheartened if a credit card company rejects you for a credit card - as this is your first credit card you do not have much of a credit record yet, and some providers are cautious about people who have no track record of being able to manage money (ie. those who are bad with money, and those who are good with money but have no record/proof).

If you get rejected on your first application, apply somewhere else. But if you get rejected 2 or 3 times, then wait 6 months and apply for more then. If you find it hard to get accepted for a mainstream card then try a sub-prime card (such as Barclaycard Initial) these have high interest rates and low credit limits, but that won't matter if you pay the full amount each month - and once you've been with a sub-prime for a year then apply for a mainstream card. (Sub-prime cards are there to help people improve their credit rating if it's low).

I believe that I am on the electoral role so that shouldn't be a problem..just have to worry about actually being accepted for a card now! I only need a credit limit of about £400 a month at an absolute maximum, so maybe that'll work in my favour:o

bitterSTAR

nalibz wrote: »

I believe that I am on the electoral role so that shouldn't be a problem..just have to worry about actually being accepted for a card now! I only need a credit limit of about £400 a month at an absolute maximum, so maybe that'll work in my favour:o

When you apply for a credit card, the company will not ask you how much credit you need - they will just decide the credit limit themselves.

As long as you meet their application criteria I don't see much of a problem. I haven't had any problems so far, and I've only had credit cards since August :j I hope you don't have any problems either!

Good luck!