Loan or Credit Card

Nirvana9

I need about £1200 to buy a bed.

I'd want to pay around £100 a month for 12 months to pay it off (adaptable according to interest).

Am I better to seek a loan or a credit card?

I don't think I'm in a great position with my credit rating to get either that easily (I've already been rejected for the Tesco 0% interest for 12 months one).

Thus I do want to improve my rating; would a loan help me do this or just a credit card?

And would I have a higher chance of securing either if I went through my bank (Barclays); bearing in mind I've been stuck in a £1500 overdraft with them ever since Uni...

ses6jwg

Do you need or do you want a new bed?

If it is the latter, I would suggest saving £100pcm until you can afford it.

Otherwise you could try applying for this card with Barclays, however living in an overdraft damages your score and makes you look poor with money

http://www.barclaycard.co.uk/personal/credit-cards/platinum-purchase

The reason you are stuck in the overdraft is because you are spending too much.

opinions4u

I need about £1200 to buy a bed

Why? You can buy a bed for £99.

If you want something more exciting, save up. Don't borrow.

I do want to improve my rating; would a loan help me do this or just a credit card?

Paying your bills on time would be more effective.

Nirvana9

opinions4u wrote: »

Why? You can buy a bed for £99.

If you want something more exciting, save up. Don't borrow.

Paying your bills on time would be more effective.

I need a good bed. That I will not get for £99. Not a chance.

And it would need replacing in a few years so would be neither economically or environmentally a good idea.

And I do pay my bills on time. Didn't know that made a difference to my credit rating though.

Nirvana9

ses6jwg wrote: »

Do you need or do you want a new bed?

If it is the latter, I would suggest saving £100pcm until you can afford it.

Otherwise you could try applying for this card with Barclays, however living in an overdraft damages your score and makes you look poor with money

http://www.barclaycard.co.uk/personal/credit-cards/platinum-purchase

The reason you are stuck in the overdraft is because you are spending too much.

I need a new bed. Ours is a state and is giving me and my partner terrible back pain.

I know I don't need to spend quite as much as I plan to (and I might not spend that much) but I'm sick of crappy beds and I want a great one.

And I know I'm spending too much, and that's why I'm still stuck in my overdraft, but it's only very recently that I've started earning enough to be living above the bread line. In July I took my first holiday in 10 years and I want to enjoy a few more things before I focus on getting the overdraft paid off.

Before I had no chance of escaping it.

Thanks for the info on that card, I'll definitely look into that. Do you believe that a credit card would be a better option than a loan then?

And I know it makes sense that my overdraft would go against my credit rating, but I also know that credit companies want people who will make them money, not people who will always pay their full balance every month. So isn't there a chance that the fact I'm making Barclay's a nice bit might go in my favour?! Or am I dreaming?!

xyellowx

argos 12months free credit and free delivery

Nirvana9

xyellowx wrote: »

argos 12months free credit and free delivery

I know I'm probably being a bit unrealistic, since I know bed shops with credit would be the easiest option. But I have my heart set on an independent company who appear to stock things of a much higher quality that argos and the like.

As I said, I'm sick of crap beds and I want something great which will last me at least the next fifteen years.

Argos and the like will be a last resort though, if need be.

Nirvana9

I knew as soon as I posted that I should've gone back and edited out why I need the money!

In all fairness the beds thing is irrelevant.

I just want to know if I'm better off getting a loan or a credit card. Anyone?!

Poosmate

I think the decision rests on how disciplined you are with money and the real reason for wanting the credit. If it really is for a one off purchase and you know you can make the repayments then I would go for a loan - it offers stability and you can see the end of it. A credit card on the other hand, whilst they can be your friend if you know how to use them right (0% interest rates, cashback and pay off balance each month), can be your worst nightmare. You may have all the best intentions of only buying the bed of your dreams (pun intended), but if the credit limit is higher than the cost of the bed will you be tempted to use it for the next thing that pops up that you need?

How about a compromise? Buy a cheaper bed but get a really good matress.

Hope that helps.

Poo

Nirvana9

Poosmate wrote: »

I think the decision rests on how disciplined you are with money and the real reason for wanting the credit. If it really is for a one off purchase and you know you can make the repayments then I would go for a loan - it offers stability and you can see the end of it. A credit card on the other hand, whilst they can be your friend if you know how to use them right (0% interest rates, cashback and pay off balance each month), can be your worst nightmare. You may have all the best intentions of only buying the bed of your dreams (pun intended), but if the credit limit is higher than the cost of the bed will you be tempted to use it for the next thing that pops up that you need?

How about a compromise? Buy a cheaper bed but get a really good matress.

Hope that helps.

Poo

Thanks a lot. Definitely a good point about buying other things. I couldn't say 100% I wouldn't be tempted!

Oh and when I'm talking about a great 'bed' I'm referring mainly to the mattress. We need a new bed frame too but it's the mattress that most the money will be going on.

Thinking more loan now. If it doesn't improve my credit rating I guess I could just get any credit card in the future and make a few small purchases to build my rating up...

Nirvana9

kriss4661 wrote: »

Hi,
I have recently been building my credit rating and i went on moneysupermarket

on there they have cards for people with bad credit/credit rebuilding
most banks won't want to lend you money in your current situation.
but once you have had a credit card (I have had mine for 3 months now) and so far i have been offered 3 other cards and my credit limit has been increased from 400 to 3000, all you need to do is make a few purchases on the card and pay it off in full for a couple of months and you will be laughing!

the card I got had 37% APR but now I have got one with 15%APR
start small and work your way up hope this helps

Sounds easy enough in theory but is there any guarantee I'd be offered a lower rate? Don't want to be paying 37% interest on over a grand!