Which credit card for an 18-year-old with no credit history?

smartpicture

My 18-year-old daugher would like a credit card, but as she has no credit history, which is the best to apply for? Or would she be better doing something else like a storecard or mobile phone bill in her name first to build up her credit rating? Or, given that she's a student and only earns £3-4000 a year, will it be impossible for her to get one at all?

And before anyone starts, she only wants it so she can do safe online shopping without needing to borrow my card all the time. She already has a bank account with an overdraft that she never uses, is always in credit and has over £2000 in savings from her part-time job so yes I believe she can be trusted to use it sensibly and pay it off in full every month! Although I'm sure some of you are going to disagree with this...

cifpower

I would start off with the bank that holds her current account as they will have records of her past financial history. Also, make sure she is on the electoral roll

Innocent_Guy

Please read page 1 of the Sub Prime Credit thread..... Also try searching for How to get on the credit ladder - a brilliant thread by Never-In-Doubt

smartpicture

Innocent_Guy wrote: »

Please read page 1 of the Sub Prime Credit thread..... Also try searching for How to get on the credit ladder - a brilliant thread by Never-In-Doubt

Thanks guys, we shall start looking. I didn't think about looking into Sub Prime credit, thinking that was for people with bad credit histories, but in this case I suppose no credit history is as bad as no credit history!

dylanuk

If she's a student - does she have a student current account? Often, banks that offer student current accounts also offer student credit cards.

They have low credit limits so you can't get into too much debt, but offer the same protection on purchases and fraud as any other credit card.

They also have much more reasonable interest rates (around 17% - 19%) - unlike 'bad credit rating' credit cards, which are nearer 30%.

Natwest, RBS, Barclays Bank - are but a few.

Innocent_Guy

Please do let us know what cards she applies for and who accepts her....

rb10

As others have said, her bank is the first place to try, as they know more about her than anyone else.

She can set up a Direct Debit to pay it off in full each month - that way she doesn't have to worry about missing a payment, and so negatively impacting her limited credit history (as long as there's enough money in her current account) and will never pay any interest.

karatedragon

My advice is tell her not to bother.

It starts with one card, then two, then three.

Next you know she will be in the Debt Free Wannabe section on here like I was. She might have savings now but so did I before the cards got their claws in.

Tell her to use her Debit Card instead online. If it is a VISA one you are pretty well protected.

And if you can't afford it don't 'ave it!

Peace

opinions4u

karatedragon wrote: »

My advice is tell her not to bother.

It starts with one card, then two, then three.

Next you know she will be in the Debt Free Wannabe section on here like I was. She might have savings now but so did I before the cards got their claws in.

It does depend very much on the nature of the individual and their circle of friends (who will be influences for good or bad!).

If she is prone to compulsive purchases, or has any hint of an addictive personality (excessive internet use, 1000+ text messages a month, overeating, overdrinking etc) then I'd suggest she avoids a credit card.

If it's not as cut and dried as that, perhaps you could politely suggest that you look after it for her.

Alternatively, if she's well balanced in most ways, trust her with it, encourage her to carry it with her as an "emergency" thing (and credit cards have got me out of difficulty a couple of times over the years) but keep an eye on her - becasue the second she starts using it and not clearing the balance in full is the first sign that she's spending more than she earns.

And if you can't afford it don't 'ave it!

Best advice ever. Although I use a cashback card and clear it in full every month.

So getting the card company to pay me seems like a winner!

smartpicture

dylanuk wrote: »

If she's a student - does she have a student current account? Often, banks that offer student current accounts also offer student credit cards.

She doesn't go to Uni until September so doesn't have a student account yet. We did ask about one and they said come back nearer the time.

karatedragon wrote: »

Tell her to use her Debit Card instead online. If it is a VISA one you are pretty well protected.

The bank told her not to use her debit card online because it wasn't safe.

opinions4u wrote: »

If she is prone to compulsive purchases, or has any hint of an addictive personality (excessive internet use, 1000+ text messages a month, overeating, overdrinking etc) then I'd suggest she avoids a credit card.

I think she'll be okay, but better to find out now while she's living with me and sharing her finance information with me, rather than once she leaves home. She's had a contract phone since the age of 12 and never abused it, obviously as a teenage girl she enjoys spending money on clothes but as I said still manages to save money for Uni as well so doesn't go overboard.

When she was much younger, she wanted the latest fad toy. She didn't have enough pocket money saved for it, so I said I would lend her the money, but she had to pay it back over the next 2 months, with 50p a week interest. After 3 weeks she'd lost interest in the toy, but had to keep paying the money plus interest for 5 more weeks. That's a lesson she's never forgotten, and she's always telling her friends they're better to save up for something they want rather than borrowing. So I think she'll be okay.

JacksterD

Which bank is she with? Lloyds TSB, RBS/Natwest and Halifax/Bank of Scotland offer credit cards with their student accounts. If she has confirmation of her place at university then you could phone up or apply online to upgrade the account to a student account and get a credit card with it.

On the other hand, I've used my debit card online for years and never had a problem.