New to credit card - Should I apply for a second to improve credit rating?

Makaer

Hi All,

I am reasonably new to credit cards, and at the moment have a Capital One card at 39.9%. Allowance is £1400 currently.
I pay the card in full every month, with balances of between £150 and £600.

I am looking to buy a house next year, but my credit rating is not that great due to me defaulting on a credit card and eventually settling the balance when I was 19.

Essentially I am trying to decide whether to open a second card, most likely Aqua and use it often to take advantage of the 3% cashback, or to just continue to use my first card.
One other question I have is whether withdrawing cash on the Capital One card could have any adverse affect on my credit rating. I dont actually need to but have recently been doing it to up the amount I have been spending on the card, in hopes it would increase my credit rating.

Thanks for any advice in advance.

[Deleted User]

Withdraw cash seems silly, you just need to clear the balance in full at the end of each month.

If you have a £1400 credit limit I would go for an Aqua card or one with your bank.

jakesuk

Withdrawing cash may have a negative impact on your credit report. Both Equifax and Experian report cash advances and it looks desperate. I don't know for sure if Capital One report all the supplementary data but don't withdraw cash as it won't improve your credit report

I would apply for a second card and like the first one just make purchases on it and pay in full each month.

Makaer

Thanks for the replies. I was hoping it wouldnt be the case that withdrawing cash would have an adverse affect, naively now I realise

If it makes any difference I tend to pay the card off as soon as the balance is visible in my online account, so they could easily see im not desperate for the money.

I think I will apply for the aqua card, and then use it for any and all cards I would usually use on the debit card.

[Deleted User]

Makaer wrote: »

Thanks for the replies. I was hoping it wouldnt be the case that withdrawing cash would have an adverse affect, naively now I realise

If it makes any difference I tend to pay the card off as soon as the balance is visible in my online account, so they could easily see im not desperate for the money.

I think I will apply for the aqua card, and then use it for any and all cards I would usually use on the debit card.

Why did you withdraw cash anyway? They will charge you for that regardless?

YorkshireBoy

Makaer wrote: »

...they could easily see im not desperate for the money.

"They" (or rather the computers and the algorithms they use) aren't that intelligent!

All they see/assume is that someone was "desperate" enough to pay a circa 3% fee and interest at circa 40% APR (and maybe even higher for cash?). That smacks of desperation to me...and especially so if it's being going on for several months or longer.

But now you know it was foolish you won't be doing it again will you?

Makaer

It was pretty naive and I regret it now. Its only been the last two months as I was trying to ramp up my usage.
The fee doesnt really matter that much, but agree, why should I pay them for nothing.

I think I will essentially scrap using my Current Accounts during the month whilst paying by card, and im sure that will increase my usage a good amount.

ChopperST

Its not so much the amount or useage just the ability to borrow and pay back in a timely manner.

Keep doing what you are doing - put petrol spend / supermarket spend on it every month and have a DD to pay it off in full every month.

If you want another card to demonstrate you can manage to meet multiple obligations then look at Barclaycard Initial, Capital One or the new Aqua cashback card.

Just keep disciplined and doing what you are doing and you'll get a green tick every month on your credit report which is what lenders want to see...

Also make sure you stay out your O/D