20 yo Student (debt free) - credit card increase credit rating?

zildjian

hi.

Im actually debt free, and have a full time job during summer and a healthy bank balance. I only spend within my means.

However, ive been told by a few of my mates that they have got credit cards which they pay off on time. Their reasoning is to increase credit rating. Is this true? I feel it may be of use to me in that sense but also in terms of more security on the web over my debit card too.

If this is the case an anyone recomend or explain what i should be looking for when taking out a cc.

Thanks in advance!

CLAPTON

actually there are lots of students like you

however, yes a credit card regularly used for normal spending and paid in full each month will enhance your credit rating which may well be useful if you want a mortgage one day

also CCs offer greater protection than debit cards

try your own bank first and set up a DD for the full payment each month

zildjian

Thank you. I was just joking as it is a stereotype that we are all poor!

sicker

As long as you do clear your card each month you could also search about for a card with benefits such as cash back. (if there are any still about)

JimmyTheWig

Firstly, you need to decide whether you will be able to be disciplined with this card. Whether you will spend it beyond your ability to pay off in full each month. Whether you will use it "because it's there" to buy things that you wouldn't otherwise have bought.
If you think you'll be ok, then proceed. If not, don't do it. The benefits it brings will be dwarfed by what you could waste.

Secondly, assuming you pay off the balance each month and you don't go for one of a small minority of cards that charge a fee there is no "bad" card to avoid. It doesn't matter whether it charges 29.9% interest or 5.9% interest - if you pay off in full you pay no interest.

Thirdly, with your situation as you describe I doubt you'll be able to get the best (e.g. cashback on spending) cards on the market. So there's probably no "good" card to go for.

So, if there's no bad ones to avoid and no good ones to go for, it doesn't really matter.
I agree with clapton that your own bank would be a good place to try first. It sounds like you've been running your bank account responsibly and this should put you in a good position with your bank.

Alternatively, Vanquis (who are supposed to be easy to get a card from) were on TopCashback a while ago. I don't know if they still are.