First time credit card for an employed, debt-free 30yr old, with no credit history??

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Hi all,

I've been badgering my OH to apply for a credit card for ages [in order to build credit rating, gain purchase protection, etc., rather than for the spending aspect], and what I had in mind was perhaps a Vanquis, or a basic Capital One, i.e. something aimed towards poor / sparse credit histories, but he has other ideas and wants to apply for the Tesco Clubcard credit card.

I know nobody here has a crystal ball, but is a Tesco card a good idea for a first timer? I'm worried about rejection.

My OH earns around £14k, but is paid in cash [legitimately!]. Whilst he does have a full current account [and Visa debit], he barely uses it. The only form of 'credit' he has ever had is his mobile phone contract of 10+ years, which he's never had any problems with.

He is 30 years old, renting, on the electoral register, and has a monthly underspend of about £200-250. He's never borrowed money / credit in any form.

He wants the Tesco card because he's a regular Tesco shopper, and regularly gains Clubcard rewards, and the idea is to do the weekly shop, and then pay the card straight off [OH hates debt, so he's likely to stick to this method religiously].

But I just have this kind of assumption that they will refuse him? I don't know why, it's just a personal belief. Am I right? Wrong?

He asked at the bank for a CC [Lloyds TSB, of whom he's been a customer for 20+ years] and they said because he had no pre-selected availability for one of their cards, they advised against creating an application. So we've no idea if he'd be refused/accepted, but I just don't think he's viewed as a very profitable customer by Lloyds!

Trying to steer him towards a subprime card for just a year or so [as a more experienced CC user], but don't really know how to explain myself in my reasoning for doing this.

Any opinions?
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Comments

  • tescomilk
    tescomilk Posts: 138 Forumite
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    Well he can certainly apply. It says to apply for the Tesco Clubcard Credit Card you need:
    • Your address history for the past 2 years, including postcode(s)
    • Your home telephone number
    • Your monthly income after tax and National Insurance
    • Your employer's postcode and address
    • Your bank details - Sort code and Account number
    • Your credit card details for any cards the you may wish to transfer a balance from
    He would seem to pass this and I wouldn't worry about the cash wages, things like this doesn't show on his credit file. His big problem will be that he has Zero credit history. He has no credit rather than bad credit and sometimes this can be just as bad. Having a bank account with debit card will help though.

    If I was him I would apply for the Tesco card first. If they say no, then certainly try Capital One to build up his credit file for 6 months or so then re-apply back to Tesco. 2 Applications won't harm his Credit File either.

    I can certainly understand why your OH wants the Clubcard Visa. Its a really good reward card and is the one I hope one day to have too when I'm a credit angel again :A haha
  • emilyteach1
    emilyteach1 Posts: 113 Forumite
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    tescomilk wrote: »
    If I was him I would apply for the Tesco card first. If they say no, then certainly try Capital One to build up his credit file for 6 months or so then re-apply back to Tesco. 2 Applications won't harm his Credit File either.

    Really, I was under a different impression? However, I guess it wouldn't look as bad as desperately applying for every credit card on the market, within a 2-day period :)
  • savanajhones
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    A person who is well employed and having good savings with no debts that are remaining can apply for credit card and they can apply in any banks.

    They simply need to understand, what are the current requirements and how much they have to pay every month and even how they will achieve their credit score.
  • tescomilk
    tescomilk Posts: 138 Forumite
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    Really, I was under a different impression? However, I guess it wouldn't look as bad as desperately applying for every credit card on the market, within a 2-day period :)

    1-2 Credit Applications or searches every 3-6 months is perfectly normal. :beer:

    Even more so in your OH's case as he has never applied before :rotfl: they will probably think that Zero Credit Applications is currently strange.

    Good Luck - let us know how he gets on. ;)
  • chexum
    chexum Posts: 546 Forumite
    First Anniversary
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    Really, I was under a different impression?

    Credit searches only affect other applications in the following 3-6-12 months (in decreasing significance). You can do a shopping spree for credit this week with 20 searches (although it's pointless), and it will be all completely forgotten after one year.

    There's a very slight chance that Tesco can accept him - so if he doesn't need the credit himself, it really can't hurt. Don't take any rejection persional though :cool:

    The trouble with Tesco that as they offer 13 months 0% purchases, they want to see absolute stability to make sure any purchases the applicant racks up *will* be paid back when the offer expires. They need to be able to measure the stability by the age of the bank accounts, payment records on the phones, move frequencies, but in the end, it's just magic :D

    If they say no, Capital one seems indeed a nice choice for start. Should they decline too, it would be probably a good idea to wait 3 months, and try another subprime, Vanquis or Aqua.

    And be sure to never carry a balance - just make sure you purchase something that you do otherwise, and pay it back in full always. They make money on commission anyway.
    Enjoy the silence...
  • savanajhones
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    chexum wrote: »
    Credit searches only affect other applications in the following 3-6-12 months (in decreasing significance). You can do a shopping spree for credit this week with 20 searches (although it's pointless), and it will be all completely forgotten after one year.

    There's a very slight chance that Tesco can accept him - so if he doesn't need the credit himself, it really can't hurt. Don't take any rejection persional though :cool:

    The trouble with Tesco that as they offer 13 months 0% purchases, they want to see absolute stability to make sure any purchases the applicant racks up *will* be paid back when the offer expires. They need to be able to measure the stability by the age of the bank accounts, payment records on the phones, move frequencies, but in the end, it's just magic :D

    If they say no, Capital one seems indeed a nice choice for start. Should they decline too, it would be probably a good idea to wait 3 months, and try another subprime, Vanquis or Aqua.

    And be sure to never carry a balance - just make sure you purchase something that you do otherwise, and pay it back in full always. They make money on commission anyway.


    The last paragraph is worth knowing and it is better to pay it back in full always. One can easily afford to have credit only when they can easily pay off.
  • izools
    izools Posts: 7,513 Forumite
    Combo Breaker First Post
    edited 2 August 2010 at 11:19AM
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    Hi all,

    I've been badgering my OH to apply for a credit card for ages [in order to build credit rating, gain purchase protection, etc., rather than for the spending aspect], and what I had in mind was perhaps a Vanquis, or a basic Capital One, i.e. something aimed towards poor / sparse credit histories, but he has other ideas and wants to apply for the Tesco Clubcard credit card.

    I know nobody here has a crystal ball, but is a Tesco card a good idea for a first timer? I'm worried about rejection.

    My OH earns around £14k, but is paid in cash [legitimately!]. Whilst he does have a full current account [and Visa debit], he barely uses it. The only form of 'credit' he has ever had is his mobile phone contract of 10+ years, which he's never had any problems with.

    He is 30 years old, renting, on the electoral register, and has a monthly underspend of about £200-250. He's never borrowed money / credit in any form.

    He wants the Tesco card because he's a regular Tesco shopper, and regularly gains Clubcard rewards, and the idea is to do the weekly shop, and then pay the card straight off [OH hates debt, so he's likely to stick to this method religiously].

    But I just have this kind of assumption that they will refuse him? I don't know why, it's just a personal belief. Am I right? Wrong?

    He asked at the bank for a CC [Lloyds TSB, of whom he's been a customer for 20+ years] and they said because he had no pre-selected availability for one of their cards, they advised against creating an application. So we've no idea if he'd be refused/accepted, but I just don't think he's viewed as a very profitable customer by Lloyds!

    Trying to steer him towards a subprime card for just a year or so [as a more experienced CC user], but don't really know how to explain myself in my reasoning for doing this.

    Any opinions?

    I would definitely agree with the posts so far -

    It couldn't hurt to try for the Tesco card. If they say no, the Capital One Classic. That's two applications which shouldn't hurt his score but if even Capital One Classic say no, hold off for three months or so before applying elsewhere and try the Vanquis card.

    Once he's held a Cap1 / Vanquis card for 12+ months he will be in a better position to apply for a mainstream card but they may want to see even more than 12 months history if it's the only card he's ever had.

    If Cap1 Classic do say no, and he ends up being approved for a Vanquis card, my advice would be to after 9-12 months apply for the Capital One Progress - which has an APR starting at 34.9% but steadily decreases as the account is run properly - so it starts off as a high APR, easy to get card but ends up with a mainstream APR.

    Once he's had the Cap 1 Progress for 18 months, not only will that card have a 19.9% APR down from the original 34.9% APR, but he'll be in a much stronger position to be approved for mainstream credit.

    Thankfully you already seem aware that it is a slow and specific process building up one's credit history.

    Good luck! :o
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  • nomoneytoday
    nomoneytoday Posts: 4,866 Forumite
    First Post First Anniversary Combo Breaker
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    I would apply for the Tesco card first.
    If they refuse, then go down the subprime route (or his bank)
    and build up some history :)
  • robfromdublin
    Options
    Apply for Tesco.

    I'm a 29 year old in much the same position (no debt, FT employment). Granted I am an EU national who has been in the country since 2006, which I'm guessing is different to your OH's case. Had previously applied for CC's but been rejected. Last year I sorted out my credit score and applied for the Tesco one. Again, rejected.

    I realised just recently that the reason I had been rejected was probably because I hadn't been in the country for 3 years. I applied for the Tesco card last week and was accepted (!) but with only a £400 limit. Still, I'm sure that will rise over time.

    So I would say apply. Can't hurt as the posters above have pointed out.
  • whocanhelp
    whocanhelp Posts: 348 Forumite
    First Anniversary Combo Breaker First Post
    Options
    I'm really sorry to post in this thread but I didn't feel my short question required a whole new thread.
    I need a credit card from which I can transfer up to £2000 straight into my bank account. I saw Santander one is 0% APR and no fees, is that the right one to go for?
    Thanks
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