Credit Card for £5000 purchase or save cash for it? Dont knows for the best?

Mozzyp

Hi,

I have a purchase i need/want to make for £5000. I have been saving £100 a week and in a year have the cash but i would 'prefer' to make this purchase sooner rather than later.

from my point of view the pros and cons are this;
Pros-
Get the purchase i want now.
Can afford to pay it off within a year so i can take advantage of the 0% interest.
Increase my credit rating (im 25 years old and im not sure if i have a good one or not?)

Cons-
I cant think of any....this is why i would like your input into this matter.

My situation is unlikely to change ie. job, accomidation. I dont know anything about credit cards as ive never had one. Ive had 2 loans in my life and ive never missed a payment on anything (phone bill, rent, etc etc)

Thanks in advance.

[Deleted User]

Con -

You probably won't get a 0% deal as you haven't had a card before - so you'll be paying interest on the purchase for a year.

Speak to your bank about a card so you understand what sort of rate you will be paying back at.

Any

Just because you want a card doesn't mean you will get one. They are not a right. One has to work hard/play their cards right to get one.

0% interest cards are only available for people with very good credit rating. Main thing about GOOD rating is to actually have one - you've never had a card before so you don't have much.

The loans will count towards it though..

If you do get a good card, your rating would have to absolutely excellent to get one with £5k limit immediately (given that you never had card before...).

Who do you bank with? If your bank has good deal on card, that would be first place to go as they will go easier on you. Can you part pay the purchase with a card if needed?

Are you on electroral roll at your address? And for some time?

Svenena

Cons:
You probably won't be able to get £5000 on 0% if you've never had a credit card
You don't know how you'll cope with the temptation of that "free money" and might end up in debt unrelated to your planned purchase (it's happened to plenty of people on here!)

ironlady2022

I agree if you can find out if you can put part payment on the card then apply for a 0% credit card and see what limit you have on and then use the limit up leaving a bit of room for manouvre (I agree with others, you'd be lucky to get 5k limit on your first card). Best advice would be to go back to your bank where your current account is held and simply ask if they can gurantee you a card and if so what limit -most banks will have internal scoring especially if you have had the loans with them.

jason87

im in the same boat except ive had a Credit Card but never activated it and now its deactivated.

Will this affect anything?

ironlady2022

jason87 wrote: »

im in the same boat except ive had a Credit Card but never activated it and now its deactivated.

Will this affect anything?

As you had the credit card, there would have been a credit search on your file. Since it is deactivated it would not affect it in an way but if you want another credit card, this will mean another stamp on your file. Alternatively is, ring them back to reactivate. It's always good using your credit card to buld up your credit file for the future when you need a loan or a mortgage.

Mozzyp

Ah right, thanks guys. I will investigate this with my bank. I bank with barclays. I know this isnt the same thing but i have a pre-approved ammount of 7500 if i want a loan with them. Would that ammount they're already wiling to loan me give any reflection of what i could expect from a credit card ammount with them?

Thanks again guys.

The_representative

Agree with points already made. You may struggle to get card with 5k limit immediately.

Secondly, if you can save for it, then go for it. You will then have the satisfaction of having achieved your goal and safe in the knowledge that you haven't borrowed the money.

[Deleted User]

Mozzyp wrote: »

Ah right, thanks guys. I will investigate this with my bank. I bank with barclays. I know this isnt the same thing but i have a pre-approved ammount of 7500 if i want a loan with them. Would that ammount they're already wiling to loan me give any reflection of what i could expect from a credit card ammount with them?

Thanks again guys.

No - it's a different ball game. Loans are set amounts, for specific things, with fixed repayments and terms.

Credit card limits can be splurged on Barcadi Breezers, Lady GaGa CDs and within the comforting environment of William Hill.

kev.s

save, always save, you'll enjoy the purchase alot more