Shall I get a credit card?

Minimods

I need some advice on credit cards. Basically i am 19 years old and have never had a credit card in my life. I am very good with my money and have lots of savings set aside. I have a Barclays and a Nationwide current account with e-savings.

The main reasons I havent got a card before are:

- Ignorance on CC's
- I know my parents would worry even though I know I am mature enough to use it responsably for the right reasons.
- Do I really need one??

The reason I have started to look into them is the fact that I have no credit history and as far as I have read having a credit card is a good way to get credit if i ever needed it. Also credit cards have some useful extras like cashback on purchases and online protection.

So what I am asking you fellow MSE's is do i really need one? If so what can I get and what does it all mean?

Many thanks
Ian

Suzz_2

Personally, I'd get one. As you say it'll help you start building up a good credit history.

You didn't mention whether you've started work yet. If you have its convenient to put all spending on a card, earn the cashback and not have to pay for anything 'til the next month. But unless your purchases are interest free, always pay off the card in full by the due date.

Another good reason to get one is, as you say, online purchases, though I think most debit cards offer some protection too..

If you want to start start stoozing right away, get an Egg or MBNA card as they'll let you transfer the cash straight into a bank account. You'll probably only get a small limit at first - I think my first was £500, but it'll go up.

Good luck!

almahadeus

I agree with the above post, just a few extra things:

If you don't have a salary and are a student (or don't have a credit history) the best way to make sure you don't get rejected is to apply for a credit card from your own bank. I would apply to the bank that you have been a customer of for the longest time because they're probably most likely to give you the card, and possibly a good limit. If that is Barclays, then they have a new customer offer on their Barclaycard (0% purchases and balance transfers- I think- check this out).

I myself applied for a credit card from HSBC at age 18 when I started university, at the same time as I opened a student current account. I had held a silly teenager's account from age 13-18. At first they only gave me £500 limit but after a few months they raised the limit without me even asking, to £2700 (which I think is quite good for a student).

So my point is if you apply to your bank and keep a good record (spend a bit each month and pay it ALL off before the interest is charged) then I think that's the best way to build up a good credit history.

Minimods

I have been with nationwide since i was 5 or something stupid (parents opened the account) and Barclays since I was 16, but PAYE gets paid into the Barclays and I have never become overdrawn so I dont think I will be rejected for the Barclaycard and it looks an OK deal to help me get some credit.

Thanks for the advice guys.

Luis

Hello Minimods,

I like you have never had a credit card and I am 28! - I have always been too scared of getting into debt, despite being sensible - but have found that through not having enough credit, I am now struggling to get credit. Feels like I am being penalised for having managed my finances so well that I haven't needed credit - and now I do they won't trust me :mad:

Anyway - the moral of this story is that I would get a card and use it very prudently, to keep a credit record going.

Good luck,

Luis.

Ant1

almahadeus wrote:

So my point is if you apply to your bank and keep a good record (spend a bit each month and pay it ALL off before the interest is charged) then I think that's the best way to build up a good credit history.

The only thing with getting a card through your bank, in my experience anyway with both LloydsTSB and NatWest, is that they don't report to Experian/Equifax if you keep your account in good order (i.e. don't default) and so they do not show on your credit report (even after you close the card, after I did with my Lloyds one).

This means that when you apply for another card, it appear you still have no credit history to the new lender, and in my case is causing me problems getting credit with others.

Hopefully though in your case, Barclaycard will report to the CRA's, meaning less problems in the future.

almahadeus

Ant1 wrote:

The only thing with getting a card through your bank, in my experience anyway with both LloydsTSB and NatWest, is that they don't report to Experian/Equifax if you keep your account in good order (i.e. don't default) and so they do not show on your credit report (even after you close the card, after I did with my Lloyds one).

This means that when you apply for another card, it appear you still have no credit history to the new lender, and in my case is causing me problems getting credit with others.

Hopefully though in your case, Barclaycard will report to the CRA's, meaning less problems in the future.

Gosh, I didn't think of that! I'm shocked now because I just went and checked a credit report that I obtained from equifax a while back and you are right, my hsbc CC isn't there! So now I am in almost the same situation (no credit history) except for 2 mobile contracts I had years ago and 2 store cards with low limits that I never use!

I am a student with one more year to go until graduation - should I apply now or wait til I'm graduated? The thing is that when I graduate I'll want to get a mortgage so credit history would help! If I should apply now which companies are good with students?

empfun

Hi Minimods, I'm mainly just re-iterating what the above posters have pointed out so definitely get one for the sake of building your credit rating. And if you're good with money you can make it work for you (eg. Stoozing). All the best!

Kazza242

I too applied for a credit card when I was 18 and starting Uni. I agree with the advice of the other posters. Make sure you pay off the statement balance in full and on time each month. Failing to do so will hurt your credit score.

One other thing I'd like to say is being good with money doesn't necessary mean you'll be good with credit cards. Many people fall into the trap of thinking that way. One of my best friends at uni was good with money. He had quite a few thousand pounds in savings accounts and decided to get a credit card during freshers week, but boy did he get into trouble. He's only just finished paying off his debts.

It can be really easy to lose track of purchases and things can quickly spiral out of contol, especially if you're inexperienced with using and managing credit card accounts. My advice to you is keep all receipts of purchases made on the credit card and write down the details of all purchases you make, including store names, amounts and dates. That way you keep control.

deemy2004

Credit card companies want people how can handle their debt i.e. meet the monthlies, not go overdrawn, hence being good with money is not the same as being good with handling debt.

I'd advice people to get maybe 2 or 3 of the higher interest starter cards such as capital one classic, to build up a credit history and after 9 months start diversifying.

They key thing is to never miss a payment. If you do miss a payment, call up the company and plead with them to not to treat it as a missed payment that it was a one off oversight and they will probably let you off.

Ant1

almahadeus wrote:

Gosh, I didn't think of that! I'm shocked now because I just went and checked a credit report that I obtained from equifax a while back and you are right, my hsbc CC isn't there! So now I am in almost the same situation (no credit history) except for 2 mobile contracts I had years ago and 2 store cards with low limits that I never use!

I am a student with one more year to go until graduation - should I apply now or wait til I'm graduated? The thing is that when I graduate I'll want to get a mortgage so credit history would help! If I should apply now which companies are good with students?

Yeah, it's really annoying that the main banks don't seem to report credit history. I graduated a couple of years ago and wished I had got a card while at uni that does report to the CRAs, in order not to have the problems I'm having now, so I guess it would be a good idea to get one now while you're still a student.

The only credit card I can remember being promoted at student fairs was Barclaycard, so presumably it should not be too hard to get as a student, but I don't know whether it shows up on credit reports. Maybe someone could comment on whether it does or not?