need a credit card! never had one before and dont understand all these words for them

jadex91

theres all this talk like so much perecent on balance transfers and so much more, i just need about 600 pound to help me as i am short on money at the moment and to pay rest of my holiday as it is due soon. i have never had one before, what are the best deals? i am looking to spend about that amount and pay about £100 off each month!

Any

More importantly, there is also talk about credit history and eligibility...
Do you have any credit history? Did you have any other sort of credit in past? Managed well?

Good income, stable job, are you on electroral roll at your current address, do you have stable address history (ie not moving every 3 months).

If yes, firstly apply with your own bank as no one else is likely to take you on.

It is not as easy as to say "I want a card", it is a credit agreement and for someone to lend you money they first need to make sure you are not going to run off with it IYKWIM:-)

izools

Welcome to the forum

The world of credit and credit cards is indeed a minefield for the uninitiated but one important thing to learn about is "Credit Scoring". This is what a creditor does when you apply for one of their products - they look at how long you've been with your bank and employer, whether you've moved recently, how much you owe, how uch credit you have available to you, if you've been late or defaulted on any credit in the past, how much you earn, and most importantly - how you have performed on past and present credit agreements.

You've said you haven't had any credit in the past - this means that you will be an unknown to lenders - they won't be able to guage your ability to repay, so won't be comfortable lending you much money or lending at a competitive interest rate. This means you can forget about getting 0% deals or any high street credit card for now, you won't be approved for one until you've built up your credit history thusly:

You are always well off starting to "Build your credit history" as soon as possible, so now is as good a time as any.

If you still have the same bank account you've had since you were a minor it's worth approaching your bank to upgrade or change to a "Full" account - one with a debit card, cheque guarantee facility, chequebook, and option of overdrafts - this is so that your bank account is visible on your credit file. That way, running your bank account well will help towards your credit worthiness.

You will also want to make sure you are registered to vote. If you aren't on the voters roll, lenders can't verify you live where you claim to so might not lend to you. Register to vote if you haven't already.

Having a mobile phone contract can also help - if you don't have one, consider taking one out. If you don't want to be obliged to pay line rental each month, then the Three Sim ZERO is an excellent option - there is £0 line rental and it works like pay as you go - you pay only for the minutes and texts you use - but this is taken out of your bank account each month instead of having to top up first. You can get one here:

http://threestore.three.co.uk/dealsummary.aspx?offercode=1SO0D001

Finally, you need to get your first credit card. There are four cards available to those that haven't had one in the past:

http://www.barclaycard.co.uk/personal-home/cards/initial/
http://www.capitalone.co.uk/creditcards/classic-credit-card.jsf
http://www.aquacard.co.uk/
http://www.vanquis.co.uk/

Now be careful - starter credit cards carry a higher interest rate - this means you'll pay more interest on your balance than you would on a "Mainstream" card. You can avoid interest by only using the credit card for things you'd buy anyway, and paying the bill in full at the end of each month. Using one of these starter credit cards in any other way, i.e. borrowing but paying back over time, is not a good idea as you will learn to spend what you don't have and pay through the nose for the privelage.

Finally, credit searches affect your credit worthiness. If you apply for more than three credit scored products in any six month period you will start to look desparate for credit, and no one will honour your applicaton even if you are in a stable situation. So don't apply for deals you might not get, and most certainly don't apply for things just for the sake of it. Credit applications must be well thought out and part of a very secure plan.

It's important to do all of this, not just some, if you want to get your credit rating up to a "Prime" level. Once you've had a full bank account, mobile phone contract, and starter credit card, all for at least a year you will look much better in the eyes of prime lenders who should then be more willing to let you have the 0% or low interest / high limit cards you might be after.

Good luck :beer:

Pheebs67

Any wrote: »

More importantly, there is also talk about credit history and eligibility...
Do you have any credit history? Did you have any other sort of credit in past? Managed well?

Good income, stable job, are you on electroral roll at your current address, do you have stable address history (ie not moving every 3 months).

If yes, firstly apply with your own bank as no one else is likely to take you on.

It is not as easy as to say "I want a card", it is a credit agreement and for someone to lend you money they first need to make sure you are not going to run off with it IYKWIM:-)

You mean "If No" right? If jadex91 Does have a stable job and has other well managed credit then they are likely to be accepted for a credit card

Agree with the sentiment though . . . Your own bank might be happy to provide you with a credit card based on the strength of your current account relationship at better rates than a 'credit builder' product elsewhere.

izools wrote: »

. . .

You've said you haven't had any credit in the past - this means that you will be an unknown to lenders . . .

Totally agree with the sentiment in your post . . . but jadex91 didn't say she(?) hadn't had any credit in the past . . . just not a credit card . . . may well have a mortgage, loans, mobile phone contracts, Sky bills etc which all make for a reasonably tidy credit record.



jadex91 - Generally speaking I'd agree with the above posts however the piece of advice that I think is missing is that, before taking out a credit card, you need to understand what you're getting yourself into. [It sounds to me though that you want to be able to spend on a new card shortly so all of the above advice about making sure you're on the electoral role etc might take too long to actually be of any benefit for this immediate need for a card - sound advice in the mid-long term though]

If you don't understand the T&C's or any of the terminology . . . either ask the card company themselves to explain it all or shout up specific questions here and I / other board members can help enlighten you. Signing up to a product that you're not sure how it works is dangerous.

Understand that borrowing £600 over 6ish months on a 'Credit builder' product at ~35%APR is likely to cost you something like ~£50 in interest at your proposed £100 a month repayment rate - it would take you 7 months to pay off.

I'm not trying to put you off taking a credit card - having one and servicing it correctly will help increase your credit score - just make sure you understand what it entails first.

Good Luck

izools

^Agreed.

I just assumed that as her username ends in 91 - she was born in '91, so isn't likely to have things like you mention, and may even still have a youth account with the bank if she's still 19.

But yes, if Jade has a mortgage, had a loan, and is paying monthly for her mobile phone then she may have a strong credit history you're right.

Any

Pheebs67 wrote: »

You mean "If No" right? If jadex91 Does have a stable job and has other well managed credit then they are likely to be accepted for a credit card

No, I mean if yes... from what OP said the maximum old credit will be phone contract etc. If she/he had no credit card, only their own bank will touch them.

If completely nothing or the application fails, then the only option is subprime credit card provider.

Edit: We can only go of the info we are given, we asked questions, OP didn't come back to explain or give detail..