23 years old. In my first job, which credit card should I get?

SunnySusie

FireWyrm wrote: »

Most of us over at DFW had similar plans. Do without credit if you can manage it. Trust me.

I think this is best left to individuals to decide. You know if you have poor self control or not, if you do, then I agree... the best way to resist temptation is to ensure credit is not an option!

But, if you are like me, and have never had a problem with spending money then this is a sensible course of action.

I was interested to learn that self control is one of the biggest predictors of future life quality. Perhaps those on DFW would agree? Either way, I feel the benefit every day. Despite having access to large amounts of credit I have never spent more than I can afford.

And of course, please remember that getting into debt can be a very rational thing to do. For example, the last time I was in debt was when I had to equip myself for my first job. Clothes, travel, etc. It would have been crazy to turn down work on the basis of not having the cash to get going!

The time before that was student debt, and going to uni was the best thing I ever did! Other's have had a different experience, which just goes to show - this is an individual choice.

Best of luck.

Zorz_2

grumbler wrote: »

If you have never had a CC yet, then you are likely to get rejected for any CC with rewards.
The best shot for the first ever CC is either a card from the bank you have your current account with or one of Bad-credit Credit Cards

In theory yes, but yesterday I discovered something very interesting:

I want to get my first credit card, just like the OP and preferably a cashback/reward one. I do have a modest credit history (small overdraft with my bank). The amount is small, and the account is less than 2 years old but fortunately there are no red flags.

Having missed the Aqua Rewards card, I had my sights on the Capital One Classic Extra. Though thinking the same, I expected to be more likely to be accepted from the likes of Vanquis or Aqua. Even Capital One's website describes the card "For people with an average to good credit history".

So yesterday, I tried MSE's Pre-apply Eligibility Checker when lo and behold, I have a "Strong chance" (80% approval rate) for the Capital One Classic Extra! Surprisingly though, I have 80% for the Capital One Classic and Luma, 70% for Capital One Progress and only 50% for Vanquis, Aquis, Aqua Classic and Aqua Advance!

Not that I complain, if I can get accepted for this card then I have no use for the other subprime cards. It is counter-intuitive though. Next week my new Noddle report comes out, and if they finally figure out that I am listed on the electoral roll, I think I'll give it a go with the Classic Extra card!

iAMaLONDONER

SunnySusie wrote: »

I think this is best left to individuals to decide. You know if you have poor self control or not, if you do, then I agree... the best way to resist temptation is to ensure credit is not an option!

But, if you are like me, and have never had a problem with spending money then this is a sensible course of action.

I was interested to learn that self control is one of the biggest predictors of future life quality. Perhaps those on DFW would agree? Either way, I feel the benefit every day. Despite having access to large amounts of credit I have never spent more than I can afford.

And of course, please remember that getting into debt can be a very rational thing to do. For example, the last time I was in debt was when I had to equip myself for my first job. Clothes, travel, etc. It would have been crazy to turn down work on the basis of not having the cash to get going!

The time before that was student debt, and going to uni was the best thing I ever did! Other's have had a different experience, which just goes to show - this is an individual choice.

Best of luck.

i totally agree- I love credit cards and think as long as you have self control and don't spend money you don't have you'll be fine!


Thanks for posting that self-control link it made interesting reading indeed!

Doshwaster

Moneyextra-Matt wrote: »

Some really useful feedback here.

Ideally i'd like a cash back credit card, but other than roughly £150 spent on petrol a month, I only really buy the odd item of clothing on my debit card at present.

I think i'm just going to set one up with my bank (Halifax) for the time being as I have all my savings in with them, and would probably find it far easier to get a mortgage with them if i'm sensible with a credit card over the next couple of years.

I appreciate everyone's input on this issue, and it's helped me map out my plan for the next 6-12 months.
Hopefully it'll help others in my position too.

Best wishes to you all.

Yes, that sounds like a good plan. Go to your own bank, accept whatever card they offer you, use it wisely for 6-12 months (always pay it off in full) and then you are sure to get inundated with offers from other companies for cards with higher limits, lower interest rates and better benefits.

FireWyrm

What amuses me about the responses to my advice is that you all assume that debt is just like being obese, it's all down to being greedy., stupid, reckless or all three What most people learn as they get older however is that life just gets in the way. You borrow a little here and there, life goes on and !!!! happens - before you know it, you're deep in the drink and sinking. If you dont believe me, come over to DFW and take a look around. Almost all regular posters will tell you the same story, that they have nothing to show for the debt, no large purchase, no flashy cars - it's all 'life'.

I'll get you an example. I was happily going along through life. I like many live 'mostly' from one payday to the next and dont live a profligate life. I do have some small savings, not much. I decided to change jobs because I was wooed by another company and I was mildly dissatisfied with my current employment, so off I went. What I didnt know was that my new employer was a conman although the sense of foreboding (something wasnt right) grew by the week. After having started in January, by March I was sure what I was dealing with so I gave notice as per my three month probation. He didnt pay me at the end of March, so, there I was, with a family to feed and the end of the month with no money. I have a mortgage and life doesnt stop just because I dont get paid. There was little option but to borrow until I could get another job. Luckily, I work in an industry where work is plentiful so it didnt take me long to sort the mess, but what if that hadnt been the case? You may say, why didnt I have savings? Well, life gets in the way, the savings were spent on the last emergency etc.

What I'm trying to say is that the OP is in a perfect position to begin life the way I should have done more than 15 years ago. If I had just taken that same advice then, i would now be mortgage free, debt free and living in a large 4 bed house. I too was young and stupid and I didnt take that advice either preferring to believe that it would all work out.

All I am trying to say is that a credit rating becomes beside the point if life is handled properly. Over at DFW, many of us have just realised this and are frantically attempting to fix the mistakes of the past in an effort precisely to become debt free for the future.

Some people recon they can handle crack too...they are usually kidding themselves.

matttye

FireWyrm wrote: »

What amuses me about the responses to my advice is that you all assume that debt is just like being obese, it's all down to being greedy., stupid, reckless or all three What most people learn as they get older however is that life just gets in the way. You borrow a little here and there, life goes on and !!!! happens - before you know it, you're deep in the drink and sinking. If you dont believe me, come over to DFW and take a look around. Almost all regular posters will tell you the same story, that they have nothing to show for the debt, no large purchase, no flashy cars - it's all 'life'.

I'll get you an example. I was happily going along through life. I like many live 'mostly' from one payday to the next and dont live a profligate life. I do have some small savings, not much. I decided to change jobs because I was wooed by another company and I was mildly dissatisfied with my current employment, so off I went. What I didnt know was that my new employer was a conman although the sense of foreboding (something wasnt right) grew by the week. After having started in January, by March I was sure what I was dealing with so I gave notice as per my three month probation. He didnt pay me at the end of March, so, there I was, with a family to feed and the end of the month with no money. I have a mortgage and life doesnt stop just because I dont get paid. There was little option but to borrow until I could get another job. Luckily, I work in an industry where work is plentiful so it didnt take me long to sort the mess, but what if that hadnt been the case? You may say, why didnt I have savings? Well, life gets in the way, the savings were spent on the last emergency etc.

What I'm trying to say is that the OP is in a perfect position to begin life the way I should have done more than 15 years ago. If I had just taken that same advice then, i would now be mortgage free, debt free and living in a large 4 bed house. I too was young and stupid and I didnt take that advice either preferring to believe that it would all work out.

All I am trying to say is that a credit rating becomes beside the point if life is handled properly. Over at DFW, many of us have just realised this and are frantically attempting to fix the mistakes of the past in an effort precisely to become debt free for the future.

Some people recon they can handle crack too...they are usually kidding themselves.

How do you propose someone gets a mortgage without a decent credit rating? As unfortunate as it is, you need a decent credit history to get a good deal.

There are other advantages to using a credit card: -

1. You can gain interest on your money you haven't had to spend;
2. Some credit cards offer rewards such as Tesco clubcard points, or cashback;
3. Section 75 protection on all purchases.

At the present time I'm putting £750-800 into my savings account each month, spending about £140 on a credit card and paying off in full each month. There's almost a zero chance I'll run into any difficulties paying it off.

I appreciate what you're saying about how life can get in the way, but usually someone will have an inkling of what's likely to happen in theirs

FireWyrm

matttye wrote: »

How do you propose someone gets a mortgage without a decent credit rating? As unfortunate as it is, you need a decent credit history to get a good deal.

The rate you get on a mortgage is about risk. Your credit rating will be beside the point if you can put up a 50% deposit or more. Credit ratings are a giant con designed to frighten people into believing that it actually matters. Lenders pay no attention to the stupid number at all. A sizeable deposit is entirely possible for someone who started off being sensible.

matttye wrote: »

There are other advantages to using a credit card: -

1. You can gain interest on your money you haven't had to spend;

Credit cards exist in the hopes that you will end up paying them interest, and you will. That interest will wipe out any interest you earned, that's the point.

matttye wrote: »

2. Some credit cards offer rewards such as Tesco clubcard points, or cashback;

There aint no such thing as a free lunch. For every 'reward' there is a price to pay. The reward is usually an illusion of questionable worth. You get 'vouchers' for stuff you probably didnt want or need in the first place and something you probably could have bought more cheaply somewhere else.

matttye wrote: »

3. Section 75 protection on all purchases.

Vaguely useful but this is only the case if your purchase is significant. How many significant purchases are you ever likely to make that justify the expense and risk to your own financial stability?

matttye wrote: »

At the present time I'm putting £750-800 into my savings account each month, spending about £140 on a credit card and paying off in full each month. There's almost a zero chance I'll run into any difficulties paying it off.

Just hope you dont lose your job, the car doesnt break, your boiler doesnt break down and the kids dont need shoes in the same month. It happens...complacency is deadly.

matttye wrote: »

I appreciate what you're saying about how life can get in the way, but usually someone will have an inkling of what's likely to happen in theirs

I had no idea my employer was a conman. In the industry I work in, it should be practically impossible due to professional standards that have to be maintained..and yet...

Anyway, this thread isnt mine, it's the OPs. Sadly, I doubt he'll take the advice but I've always been an optimist - it's a failing of mine, it means I'm continually disappointed by life.

matttye

FireWyrm wrote: »

The rate you get on a mortgage is about risk. Your credit rating will be beside the point if you can put up a 50% deposit or more. Credit ratings are a giant con designed to frighten people into believing that it actually matters. Lenders pay no attention to the stupid number at all. A sizeable deposit is entirely possible for someone who started off being sensible.



Credit cards exist in the hopes that you will end up paying them interest, and you will. That interest will wipe out any interest you earned, that's the point.



There aint no such thing as a free lunch. For every 'reward' there is a price to pay. The reward is usually an illusion of questionable worth. You get 'vouchers' for stuff you probably didnt want or need in the first place and something you probably could have bought more cheaply somewhere else.



Vaguely useful but this is only the case if your purchase is significant. How many significant purchases are you ever likely to make that justify the expense and risk to your own financial stability?



Just hope you dont lose your job, the car doesnt break, your boiler doesnt break down and the kids dont need shoes in the same month. It happens...complacency is deadly.



I had no idea my employer was a conman. In the industry I work in, it should be practically impossible due to professional standards that have to be maintained..and yet...

Anyway, this thread isnt mine, it's the OPs. Sadly, I doubt he'll take the advice but I've always been an optimist - it's a failing of mine, it means I'm continually disappointed by life.

Most people don't have the luxury of a 50% deposit and are looking more for a mortgage in the 80-90% region. The very fact that the government has come up with the help to buy scheme whereby you only need a 5% deposit and they'll lend you the other 15% shows that first time buyers need help with buying using a smaller deposit, not larger.

I'll never pay interest on my credit card because I don't spend enough on it. I will always be able to pay it in full even if I lose my job and my car breaks down at the same time.

Likewise with rewards, so long as you pay in full each month there's no interest payment, so rewards are free so long as you do pay in full. I don't think of paying in part as an option

In my current position I don't have to worry about half of the expenditure you listed there and I don't really have much in the way of financial responsibility. I have a contract phone, I pay rent and have to keep my car on the road. Roughly 69% of my income is unaccounted for each month so I just whack it straight into savings.

FireWyrm

matttye wrote: »

Most people don't have the luxury of a 50% deposit and are looking more for a mortgage in the 80-90% region. The very fact that the government has come up with the help to buy scheme whereby you only need a 5% deposit and they'll lend you the other 15% shows that first time buyers need help with buying using a smaller deposit, not larger.

No. It shows most people are living way beyond their means from the get go and by the time they want a mortgage they are deep in debt which accounts for a third of their monthly expenditure. This is a debt based economy.

matttye wrote: »

I'll never pay interest on my credit card because I don't spend enough on it. I will always be able to pay it in full even if I lose my job and my car breaks down at the same time.

at the moment.

matttye wrote: »

In my current position I don't have to worry about half of the expenditure you listed there and I don't really have much in the way of financial responsibility.

Neither did I once upon a time. By the time I realised what was going on, I was already in the trap and the noose was strangling me...to extend the metaphor. Sooner or later you'll have responsibilities too and then it is just a number of small hops, a couple of unforseen circumstances and a minor disaster or two before you suddenly realise you're stuck.

matttye

FireWyrm wrote: »

No. It shows most people are living way beyond their means from the get go and by the time they want a mortgage they are deep in debt which accounts for a third of their monthly expenditure. This is a debt based economy.



at the moment.



Neither did I once upon a time. By the time I realised what was going on, I was already in the trap and the noose was strangling me...to extend the metaphor. Sooner or later you'll have responsibilities too and then it is just a number of small hops, a couple of unforseen circumstances and a minor disaster or two before you suddenly realise you're stuck.

Whatever the reason, be it debt, having to take pay cuts in this unstable economy, or some entirely different reason, not many people will be able to put down a 50% mortgage It probably makes more sense to get a mortgage with as small a deposit as possible so that you can start putting money towards a house.

Option 1: rent while you save up for a 20% mortgage deposit.
Option 2: rent while you save up for a 5% mortgage deposit, then begin paying off mortgage.

With option 2 you're not going to throw away as much money on renting.

---

This is what I'm saying. There is no 'one size fits all' - everyone has their own circumstances to consider. When I move into a place of my own I'll reconsider my financial situation, but at the moment I can safely say I'm very, very unlikely to get into trouble with my credit card.