To lend or not to lend?

jameshoward1988

Hello, I will start this by giving you some details about myself.

I'm 23 years old
Bank with Barclays
Earn £18000 a year (w/o overtime)
Noddle credit score of 3/5

Im looking to possibly get a credit card to pay my annual car insurance of £1070. If I pay monthly it works out around £1200 I think so a 0% card would be good no?

Would it be beneficial to me getting a credit card? Will I be accepted for a 0%? Should I take the alternative of borrowing from a relative, bearing in mind I'm still paying for a loan from them before..

Thank you guys, you do a great job here btw!

James.

CLAPTON

if you have no CCs already then it's extremely unlikely you will get a 0% deal as your first card.

in any event without knowing what your credit files say or whether you are on the electoral roll etc its impossible to say whether you would get any CC

in general it would be best to save up for thing like car insurance as they need paying each and every year

jameshoward1988

Thanks for the quick reply mate. If it helps I am on the electoral roll, have a store card which I always paid on time?

Thanks

blitzboy

Personally I would apply for the Barclaycard Platinum Purchase card, 0% on purchases for (I think) 15 months.

Of course, if rejected it will have a small impact on your credit file but as long as you dont go off applying for others straight away if you are rejected it wont hurt your future credit.

Your store card will certainly help, as long as you have not missed a payment etc.

I applied to barclaycard in a similar position (but less income than you) a few years back and was given a 3k limit, which is why I would recommend them as a starting point personally.

Miss_Spendalot_2

I think Barclaycard do a soft search option now that does not leave a mark on your credit history as does nationwide, I am sure it is worth going down that route first to see how it looks for you before applying.

Good Luck

Catherine_Johnson_2

Or look at it a different way? Get a cheaper car with cheaper insurance until you are an older and more experienced driver?

You know that once you get a credit card

a) it will not always, if ever, be at 0% interest

b) you will use it for other purchases, not just your insurance, and it will cost you a lot of money. I can almost guarantee that you wouldn't have paid off this year's insurance on the credit card before next years comes up for renewal. And so it will mount up


Personally, as you've already got one loan out, with a relative, then I would try and pay that back first before I started thinking about more loans or more credit.

Think about a cheaper car with cheaper insurance. If you can't afford the insurance without taking out a loan then, I would say, you can't really afford the car.

YorkshireBoy

Catherine_Johnson wrote: »

I can almost guarantee that you wouldn't have paid off this year's insurance on the credit card before next years comes up for renewal.

I'm not sure how, based on the very little we know about the OP?

If you can't afford the insurance without taking out a loan then, I would say, you can't really afford the car.

The OP may *need* a car to get to his place of work. No car = no job = no income?

He may only recently have secured this job and not had chance to accumulate any savings yet.

For years, I paid for my car insurance monthly (and probably paid 20% APR for the privilege). I had a well paid job, but also 3 kids and a non-working wife and decided to use what little savings I had for the summer holiday (in the UK) rather than car insurance.

skintdad

Barclaycard platinum requires minimum income of £20k so make sure you include average overtime earned in your income on the preapp check

YorkshireBoy

skintdad wrote: »

Barclaycard platinum requires minimum income of £20k so make sure you include average overtime earned in your income on the preapp check

That figure is in the "best suited for" list, along with at least 4 years of credit account management history (loan, credit cards, overdraft, mortgage), so may not be an 'absolute' requirement?

So even if the OP can scrape together £2K of overtime, they may fail on the credit history criterion?

skintdad

Agreed. But they are looking more towards that so getting a green tick there may help towards the lack of credit history. The scorecard may see 4 years current acc as being credit account. We just don't know. Anything that can help get an accept is worth noting (barring fraud etc obviously)

jason1231972

jameshoward1988 wrote: »

Hello, I will start this by giving you some details about myself.

I'm 23 years old
Bank with Barclays
Earn £18000 a year (w/o overtime)
Noddle credit score of 3/5

Im looking to possibly get a credit card to pay my annual car insurance of £1070. If I pay monthly it works out around £1200 I think so a 0% card would be good no?

Would it be beneficial to me getting a credit card? Will I be accepted for a 0%? Should I take the alternative of borrowing from a relative, bearing in mind I'm still paying for a loan from them before..

Thank you guys, you do a great job here btw!

James.

Lend? You mean borrow

Anyway.

If you can get a 0% card, then it's obviously a 'no brainer' that provided you actually paid it off in time (0% deals can range from 3-24 months...or may not be available at all), you'd save a bit of money on the car insurance.

But, it is a bit. If you were offered a higher APR card (quite likely), it would likely cost you more than the £130 car insurance interest cost, unless you really threw some serious money at the balance as quickly as possible (which might work out difficult and could impact on your lifestyle). If you opted to pay monthly on the insurance, you're paying an extra tenner a month for the privilege. That's not bad!

Just based on your income (and not knowing anything else about your circumstances), you appear to be eligible for a credit card per se, and it would probably come with a limit that would cover your insurance...but an APR that could render it an uneconomical way to pay for your insurance.