First credit card for very occasional use: Tesco or Barclays?

toja

Hi, I am a complete credit card novice, haven't applied for any in my life. Basically, I just went on maternity leave and would like to have a credit card as an "emergency" fund for urgent home improvements which might (or might not) come up during my maternity leave. So I need the basic credit card in case I need to make payment to builders etc. It is only 50% possibility that I am going to use it, but you never know.
Barclays is my current bank and I have a small overdraft limit with them (never used), but a friend of mine advised that if I could collect points with Tesco card and use them for shopping in Tesco.
Which one would you advice?
By the way, would I be paying an annual fee or any other charges if I am not making any use of credit card?

izools

If you're never had a credit card before I wouldn't see you getting a Tesco card. They will want to see previous credit history with other credit cards; so that's right out.

I suggest going with your bank. This pre-application checker from Barclaycard will show what you're eligible for based on your credit file and circumstances:

https://letmechoose.barclaycard.co.uk/

You might have to start off with a basic card like the Barclaycard Initial or Capital One Progress.

Good luck! Let us know how you get on

toja

Thanks izools! Hmm, that is interesting. I have a mortgage though and my credit score is 999 (just checked few days ago), would Tesco still not give me a credit card?

izools

Waste of money that score; ignore it.

You can apply for a Tesco card if you want but I seriously doubt they'll give you one with no previous credit card history.

What does the Barclaycard pre-application checker suggest?

toja

It does suggest several credit card options, but doesn't say anything about the limit..

izools

No you'll never get to know the limit until you've submitted a full application and they've come back with a decision.

If I were in your position, I'd apply for both and keep the one that comes back with the best limit / APR (if both get approved).

Two applications won't harm your credit score especially given Barclaycard and Tesco search different credit reference agencies to one another - meaning it will only look like one application to other lenders anyway.

Best of luck!

CLAPTON

just a couple of points
if you have a CC for emergency purposes and never use it then the CC company may well stop the card, so just when you need it it may not be available.

better to get a card, use it every month for things you anyway buy (maybe petrol, supermarket shopping) and set up a DD to pay the balance in full - this will improve your credit reports, and if you have a reward CC will earn you 'free' rewards.

bear in mind that many small builders, plumbers etc don't accept credit cards

emergency funds really need to be cash savings.

toja

Barclay offers me Barclaycard Platinum Simplicity, or Barclaycard Initial Card, not that I understand which one is better...

izools

The Platinum Simplicity carries a much lower APR (6.8%) so it would cost much less to service the debt - but you stand a much lower chance of being approved for it over the higher-interest Initial card.

What percentage chance does it say of getting the simplicity? If they approve you for that you've found a killer credit card! One of (if not the) best APR cards on the market.

toja

Simplicity says 80-90% and Initial says 90%+.
So if I get Simplicity, for example, and I don't use it, does that mean that they will take it back after some time?

On the second thought maybe I should just stick to overdraft limit, I currently have £1000 limit and pre-approved of £3100, at least I don't have to care about it if not in use...

izools

toja wrote: »

Simplicity says 80-90% and Initial says 90%+.
So if I get Simplicity, for example, and I don't use it, does that mean that they will take it back after some time?

On the second thought maybe I should just stick to overdraft limit, I currently have £1000 limit and pre-approved of £3100, at least I don't have to care about it if not in use...

If you stand a chance of getting a Simplicity card go for it - it's a fantastic credit card.

E.g. - if you go #500 overdrawn, you'll pay about #8.30 a month interest.

If you put #500 on the Simplicity credit card, you'll only pay #2.85 a month interest.

The savings are of course much greater the more you need to spend.

You can use the card occasionally for groceries and pay it back in full (avoiding interest when you clear in full) if you're worried about them closing it but normally you'd have to leave it dormant for two years before they "take it back".

I hope you do get approved for the Simplicity, I can't stress how good a card it is being so cheap to service any debt you build on it

EDIT: Especially as a first card. Simplicity is somewhat a "elite" card due to it's tiny interest rate and most people have to spend years building a good credit history on other cards before they can get one. Barclays appear to really like you :beer: