Is there anything I can do to get a card?

DavidHM

Currently my financial situation looks like this:

Income - £1,300/month net (equivalent to just over £20k gross p.a.)

Expenditure - £165 on diesel (65 mile round trip commute)
£38 on mobile - up for re-evaluation in May
£50 token on rent - thanks Mum and Dad
£45 on food
£30 on socialising
£40 on everything else (clothes, toiletries, books, occasional car maintenance etc.)
Car insurance is paid annually, no other expenses

Debt

Stylecard - £1,000 limit, £0 balance (29.9% APR) - dormant but technically open
Barclaycard - £3,000 limit, £0 balance (19.9% APR)
Argos storecard - £2,000 limit, £0 balance (25.9% APR)
Northern Rock personal loan - £16,500 estimated balance at £278/month (6.7% APR) - Approximately £80 interest and £200 capital repayment.

Debts are from two years at law school, living in London and then not qualifying as a solicitor after all. Essentially each month I spend £450, including interest, and have £850 left over to reduce my debt. (That's not wishful thinking, my MS Money says so.)

I have one late payment, ever, three years ago - and that was only because I forgot to pay the bill, not because I couldn't. My credit report has green all over it, I have a good postcode and a stable address and financial history.

But I can't get a new credit card. I only want one so I can run errands and incur reimbursable expenses without impacting my monthly cashflow, get Consumer Credit Act s.75 protection on big purchases, maybe get some cashback, and so on.

The only thing is that I have now been turned down by three lenders and I'm despairing of ever being able to tell Barclaycard where to go as, since I've had the card, they've increased their APR and their charges several times and taken away the Nectar points. I suspect that if I want a credit card, I'm stuck where I am unless anyone has any suggestions.

frivolous_fay

I'd suggest closing the card accounts that you're not using. The more cards you have, the worse the chance of being offered one.

The Barclaycard isn't such a bad deal, if you pay off in full, on time, each month. If you start getting hit with interest and charges, ANY card will hurt your pocket.

steve_r123

Definately close the two store cards, and then leave it a couple of months before trying again, as having had 3 applications turned down won't look good on your credit score in the short term.

As has been said, you can still use the Barclaycard in the interim, just remember to pay it all off before the interest kicks in

YorkshireBoy

Something to think about...

Ensure you're on the Electoral Roll.
Close the 2 storecards (ask them to mark as settled with the CRA's and check that they've done it).
Reduce the Barclaycard limit as far as you can - £1K?
Approach your own bank for a credit card.
Can you overpay the loan without penalty? (ie, it MUST be impacting on your credit score).

Having said all that...

That's one BIG personal loan, when compared to your salary. :eek:
You're not a homeowner.

DavidHM

Thanks Yorkshireboy.

I've just ordered the Equifax credit report and signed up for the month's trial with Experian. I am on the electoral roll at my current address but not showing at my previous address, although I did vote from there so I must have been on it at some stage.

The Stylecard account is showing as settled but still has my limit of £1,000 on it and is reporting up-to-date despite the fact it's not been used in five years.

Hopefully I now have a signature to show how far I've come on the debt-free journey too - managed to get the loan for £17,500 against a salary of £15,600, replacing a Barclays loan over a longer period with a higher APR.

PBA

Lenders will be put off by the fact that you've already got more unsecured lending agreed than your salary, but you're still applying for more. Get the storecard accounts closed (unless they give you some fantastic discount at the stores they're for, but I don't think they do) and start using the Barclaycard. Even if you only buy one thing on it a month and then pay it off, it shows that you're using credit responsibly rather than hoarding it. After doing that for 6 months or so you shouldn't have a problem getting accepted for most cards.

tattooed_lady

Just a small point, I phoned up to cancel my Barclaycard (apr 27.9% :eek: ) and they immediately offered to reduce my rate. You could try that?

YorkshireBoy

DavidHM wrote:

I am on the electoral roll at my current address but not showing at my previous address,

This will be a problem for you, as lenders like to see a traceable history going back 3-6 years.

The Stylecard account is showing as settled but still has my limit of £1,000 on it and is reporting up-to-date despite the fact it's not been used in five years.

Very strange! You say it's settled, but still being reported? It must be one or the other surely? If it's settled, it'll say 'settled xx/xx/xx' against the account on Experian, and be marked 'S' with Equifax - preceded by lots of '0's hopefully.

I don't know much about loans (have you checked out the loans board?), but I do know that lenders like to keep you tied in with the same repayments.

I *believe* that, unlike credit cards, it is 'easier' to get another loan to pay your first loan off. This is because you might not actually see/touch the money if it's transferred from lender to lender. In which case, going for some kind of 'flexible' loan might be a good bet - expecially as your MS Money package says you have surplus funds each month.

This 'flexible' option with your loan is the key to re-building your credit score, as it's possibly the only way (short of massively increasing your salary) to lower your available/used credit to salary ratio and make you more 'appealing' to other lenders.

Good luck.

DavidHM

StyleCard is settled - reporting lots of 'U's for "unable to report" due to being settled but I misread those as '0's for updated.

I think I will go down the flexible loan route in about 18 months when I finish law school as I'm going back next year and that's why my debt free date and my monthly payments don't agree so exactly.

Incidentally although you could probably argue that there was a trust when I applied for my loan requiring me to repay the existing one, the funds were simply paid into my current account and I could theoretically have gone out and bought a new BMW 1 Series or something instead, and for about 48 hours I had a loan balance of £35k until the new loan cleared the old one.

As for phoning them up and asking for a better rate - the thing is that I'm more annoyed at being squeezed on the terms and conditions when there are other, more competitive providers on the market, and it's not really costing me much to have this poor credit card deal. I still need a credit card of some description and so if they call my bluff I'm either faced with having to back down or do without.