Advice on what do credit card wise?

davidmaiden18183

Hi all, not sure if anyone has followed my last thread regards a car I 'purchased' proving to be a stolen vehicle (clone). To cut a long story short it looks fait accompli now and it will be at a total loss of £3400 and nothing to show for it.

This has put my finances in a bit of a pickle as I had expected to sell the car I still have for around £2900.


I would like some advice on what I'm best doing regards getting another credit card. One for purchases alone or purchases and balance transfers. I need the purchases as still making my first house a home and my outlay in these years is far higher than it will be in say 2 years

My card history is as follows

My first ever credit card is no longer used after a hears of use and is now 0 balance. I have not closed it as I read it's best to keep your first card as it lengthens your credit history

My second card after the above with Tesco I used over its 13month 0% on balance transfers and purchases and then kept at 0 balance for 6months as available credit if I needed it. However as of last week I closed it on the assumption the available credit they were giving me would reduce the available credit a new card would get me with new 0% interest periods.

The virgin card I am current using is mid way through its 0% period has a credit limit of £5500 and I am using £4700 of that and likely to use the rest to finish off my hallway

I've not applied for any other credit cards, contracts or accounts in the last 6months.

I should point out I am not in debt to the £4700 figure!(in effect, to the credit card) as I have £1500 earning interest in a high interest account.


So that I can continue to modernise my house I'd like to increase my available credit and not have to worry about any interest. Am I best requesting virgin increase my credit limit and I enjoy that for the rest of the 6 months 0% interest. Or am I likely to have no problems getting another card with a decent/similar credit limit and that be the best route.

My salary is around £29,000 and my credit score is reported as very good.

Thanks

davidmaiden18183

Anyone?

....

Eonel

Increasing your Virgin limit would be the first avenue but they will not take your £1500 savings into account. Before doing this, check your credit report to make sure the Tesco card is shown as Settled. Failing that I would look to apply for another 0% card.

If you fail to get a 0% deal, then you should consider using your£1500 savings. I appreciate you may think of this as a buffer, but it is guaranteed that it earns you less interest than you will pay on the credit card debt.

Next option is to consider putting house renovation costs on your mortgage. You can only justifiably do this if the work you are doing to the house truly increases it's value as an asset. A new coat of paint would not count as it will need doing again in a few years. However spending money on repairing damaged walls could be considered an investment that will pay itself back to you when you come to sell the house.

Final option is to do nothing. Financially you are not in the strongest place despite what your credit score says. You earn a bit-above-average salary, have net credit card debt and have probably further extended your commitments by taking on a mortgage. Enjoy being a homeowner and defer spending further money on the house until your finances settle or improve.

davidmaiden18183

Ok thanks for the advice.

The only thing i would question is I would feel extending the credit limit on the virgin card would only be a small amount I would imagine, I can't imagine them bumping it up by say 4000, and with it only giving me a about 6-7 months 0% interest I think I Would get a better amount of credit and with a new card and better longer 0% period.

The Tesco card has been paid off months ago and been cancelled over a week now. Is it safe to say its settled? How can I go about checking.

davidmaiden18183

Also note just for clarity the £1500 in a cash account isn't actually savings, it is stooging - I am a using the money from the 0% credit in a high interest account I.e. interest on borrowed money that's not mine. All said addons balance my finances back ou and I would be around £3000 In debt he'll on a 0% credit card

Eonel

Sign up for your free trial at Experian to check to see if your Tesco card is Settled. ( there are other free ways, just flick through this forum ). It will take more than a week to update - six weeks is possibly more realistic.

davidmaiden18183

Ok I will try that, but I a guessing it's not worth wasting the trial now and more like we. It's 6 weeks. I guess settled means closed, not at 0 balance.

I also assume it would be best to use the cash in the savings account to pay off the £1500 off the credit card dept as assumed that would help me get a better credit limit with a new 0% card.

Do credit checks include or check what you have in cash accounts?

Eonel

Credit checks do not include positive bank balances. They can include overdrafts limits & breaches - treated as available credit.

Your first post says your Credit Score is very good. Surely, wherever you got that score from will tell you if your Tesco card is Settled. ( closed as opposed to zero balance )

davidmaiden18183

Unfortunately it was just 'very good' based on an iPhone application that is well reviewed that uses similar/the same formulas as the credit reports do-not an actuall credit report just an assessment.

So is there any benefit of me using the £1500 in savings to pay off pat or credit card prior to applying for a new card? Does that take 6 weeks to be reflected also?

Eonel

You should get your hands on your full credit report as quickly as possible. It is enlightening to see the information that finance companies report about you. ( under no circumstances pay for any kind of credit score - they are meaningless )

It would be beneficial to your report to get rid of the stoozing balance- at the cost of the small profit you're going to miss.

In my experience balance updates tend to reflect quicker than closing old accounts. But cant give you accurate timelines, there are many variables around statement date & posting date.

davidmaiden18183

I earn about £7 or £8 interet on my stoking balance, in effect this would pay for the fee to transfer a balance if I hadn't cleared the card at the end of the interest free period.

I have taken your advice and been to experian and have the report, you are write it is enlightening, the Tesco card is not yet settled and show the £34 in credit that they are still to pay me - so I ask is it really going to hinder the value another credit card company will offer me?

My score on experian was 999 and listed as excellent


Below is a brief summary

Credit History Summary
Number of credit accounts (including those settled)15
Amount of available credit (excluding mortgages) £16,955
% of your total credit being used (excluding mortgages) 18%
Amount of outstanding debt (excluding mortgages) £3,745
Number of accounts overdue 0
Number of missed or late repayments in the last year 0