Increase credit score with Halifax Student Credit Card

benbread

I recently applied for a Halifax Student Credit Card, and was accepted :beer:. Let me first point out that I have no intention of ever using this card in a "non-money saving" way - Being the student type my credit rating is prett much non-existant, and I want to use this card to help get the ball rolling, but am I missing something big?

Here's the plan;
* For some purchases, instead of paying with debit card, use the credit card instead.
* Either pay the money off online as soon as possible or create a direct debit to clear the balence at the end of the month.

I see that there is a 59 day payment period where no interest is charged, so this seems like a good idea - But, is it better to pay the balence off straight away, or to keep them hanging for a while and pay off at the end of the month? Or maybe the biggest question is, is it even worth doing?

If anyone else has done something similar I'd be really grateful if you could give me your input or tips - Then i can either sign this thing or send it to the shredder!

Thanks!

Mike1989

Well if you get a credit card, pay it off in full at either the end of the month or straight away, you will start to build up a good credit rating. Probably will take some time to build up one that will give you access to accounts which you don't have right now, but it is a good way to start getting a good credit rating. I don't think it will matter much at what time you repay the money.

If you have a halifax current account you get 2% interest on your money. At this time I'm too lazy to work out what money you would make on the amount you purchased, but I guess it would be a small amount that wouldn't make it an issue what time you pay it off. Just make sure you pay it off in full every month.

To be fair I have a credit card that I use online. Pay it off in full every month and the reason I do that is two fold. 1. It is safer to use a credit card online because it has more protection, 2. I don't want to spread my main bank account details on the internet. Last thing you need is your main bank account details getting hacked and you losing your grant or loan money, and waiting weeks for the fraud people to get it back.

rb10

Yes, I think that, provided it's used sensibly, a credit card for a student is a good thing.

If you can put just one thing on it each month (something that you'd normally use a debit card or cash for), then, it will gradually increase your credit rating, so should help in the future (e.g. mortgage etc).

Personally, I would set up a direct debit for the full amount. Then, as long as you've got the money in your current account for the DD to go out, you won't be charged any interest or charges, and that will help your credit rating. I think this is safer than having to remember each time to pay it off manually, unless you are very organised!

MrsManda

I got a credit card for exactly the same reason. I have a Halifax student account but ended up going with the Halifax One card instead of the student one as it has a lower APR and a higher credit limit. Creating a DD to pay it off in full each month is the best way for me as it means I never forget to pay it and don't end up paying interest.
Having a credit card, providing you use it responsibly, is good for creating a credit history. Plus it means you can use it to buy things online with more security than using a debit card.
My MIL a few years back was refused a credit card as she had no credit history (mortgage was paid off, everything else had been in her husband's name). The bank did relent when she pointed out she had over 10k in savings held in one of their accounts but as that's not an argument I'm likely to be able to use any time soon I thought I'd get a credit card while I can.

CLAPTON

its much better to set up a DD for the full amount so there is no possibility you will forget.
paying a bit at a time is rather confusing and so best avoided.