CC Advice.. I'm new to all this!

Noxs

Hi

I'm looking for some advice, in the near future around christmas time I'll be applying for a mortgage as a first time buyer. However with little credit history im worried I'll be rejected - a mortgage advisor suggested I take out a credit card to gain some history.

Always steered away from them in the past as I hate the idea of owing money.. So only ever used debit cards. I've been reading up about cc's on this site and im not sure if I'll be rejected by mainstream cards or be forced to take one of the 30%+ interest cards?

I've just moved(renting)/ started employment for the first time. I'm on the electoral register, paying utilities, mobile phone contract, council tax (first time at the end of this month) and broadband. All of which i hope help in some way.

Should i risk applying for a good credit card such as Tesco's where if im rejected i'll gain a strike on my credit rating and hurt the possible mortgage application in the future?

Any extra helpful advice will be much appriciated. :j

cifpower

The best place to start is with your own bank as they will have knowledge of your financial history. If they turn you down, then you can start looking at sub-prime cards like Vanquis

td_007

In your situation any credit card will do. If you steer away from those that offer additional benefits such as 0% rates or cashback, then you have a relatively easy chance of getting accepted.

Budner

If you get refused a credit card from a mainstream lender it's doubtful you'll get a mortgage from one. So may as well give it a go

thriftymomma

1 credit search doesn not negatively impact your credit file on it's own.

Noxs

Gah, Well i applied with my current bank account and even though i have 5+ years of a debit account with them i was rejected. Apparently they couldnt look at the account history as it wasn't a current account.

(At the same time i applied for a current account with them.. (Halifax), which i was accepted for)

Furthermore i tried to apply with Capital One, one of the high interest cards to help build up a credit history and got rejected... I'm shocked...

Help!

No idea how to rectify things now. :S

al_hunter

I'm not massively experienced in this area but I would've thought if you're only just starting your first job and only just moved into rented property there's only a very slim chance you'll get a mortgage for the simple reason that you need to be able to demonstrate that you can afford to run a property without getting into debts. I would suggest you stick it out in your rented accommodation for at least a year before looking for a mortgage. That should help your credit history too. It'll also give you time to get a credit card and demonstrate responsibility with a credit facility.

Good luck!

TrickyDicky

It sounds like you are a very money savvy person.

You dont have to pay a penny in interest from any CC you get, whether the interest is 1% or 100%. All you need to do it set up a DD for the entire balance each month and no interest will be due (all CCs have a x day interest free policy, which is basically statement to statement interest free). And as you already pay for stuff with debit cards anyway you should have to cash to do this.

Interest is only paid when you dont pay off a balance monthly. If you dont pay off the whole lot on the due date, then interest is calculated from the date you purchased the item.

For example: you get a credit card at 24% and you buy something for £100 on 1st Jan, it is due for payment on 12th Feb. If you pay it all off on 12th Feb, you pay £100 and its cleared, meaning you kept the £100 in your bank account for an extra month, earning you some interest (only pennies atm, but its free money)

OR, it comes to 12th Feb, and you only pay the minumum (say £5). Now the balance at 12th feb becomes £95, but on 12th march you owe £95 + 2% of £100 (backdated interest) + 2% of £97 (interest on new balance plus interest) which is £98.94. This is a bad thing and is why credit cards make their money and people get into debt.

Personally, I always go with option 1. In the last 3 years of having credit cards I have not paid a single penny interest on them. They have actually paid me ~£200 in cashback, but thats another story.

hoyles10

Try Flybe... From what people have said they seem to accept people quite easily and I got accepted for one last night even though I thought they would tell me to go away and leave them alone.

Noxs

Thanks for the advice.

Some good news (i think) been accepted for a £100 overdraft, tell me if this is a good plan or not. But i'm going to use this new reward current account - transferring all of my direct debits so that Halifax can see my incomings and outgoings. Then after 3 months apply for a credit card with them? As my overdraft shouldnt be touched it should help my credit score?..