HSBC just gave me a credit card against my expectation

geekonthepc

Hi all,

HSBC just accepted me for a new credit card which is drastically better than my current card.

Currently got a BC Initial with a 29.9% IR on a £600 limit. HSBC offered me a 19.9% IR on a £1250 limit through my online banking which I gracefully accepted (I have banked with them for well over 3 years so it probably shouldn't come as too much of a surprise).

I'm currently paying off my Barclaycard in full every month and using 60% of the limit. With the HSBC card being considerably better, I'll just do all spending on that instead and pay that off in full.

However, my question is - as I'm still trying to build my credit rating (being a 19 y/o student in part time work ~£9.5k income), do I keep putting small amounts on the Barclaycard and paying it off every month, or do I stop using it altogether?

I'm thinking it's just best to put £50 or so a month on the BC and pay it off in full, mainly so it doesn't get closed and I can age the account a bit.

Just wondered what everyone else thinks I should do?

Many thanks

Alex

YorkshireBoy

geekonthepc wrote: »

With the HSBC card being considerably better

Why is it "better"?

I'm thinking it's just best to put £50 or so a month on the BC and pay it off in full, mainly so it doesn't get closed and I can age the account a bit.

I'd agree with your thinking.

However, if HSBC had given you, say, £3K I'd have suggested closing Barclaycard because the very low £600 credit limit has 'sub-prime' written all over it* - to anyone searching your credit file.


* Not literally of course, because the lenders name and account type/name/APR is not shown on the copy of your report that lenders get to see.

geekonthepc

YorkshireBoy wrote: »

Why is it "better"?I'd agree with your thinking.

However, if HSBC had given you, say, £3K I'd have suggested closing Barclaycard because the very low £600 credit limit has 'sub-prime' written all over it* - to anyone searching your credit file.


* Not literally of course, because the lenders name and account type/name/APR is not shown on the copy of your report that lenders get to see.

Because the IR is much better in the event (which I hope won't be the case for the next few years) I didn't pay the whole amount off. Plus it has 3 months interest free on purchases anyway, even though I'm unlikely to make use of it.

Yeah fair enough I agree with your thinking. I'll keep the BC open and just use it for the odd one or two minor purchases, paying it off in full. Bearing in mind it is only about 7 months old, I don't really want BC closing it for a while.

marywooyeah

YorkshireBoy wrote: »

Why is it "better"?.

Because the ir is lower? Sounds good alex but if you're only 19 be careful about getting too much credit as it can be tempting to splurge and you dont want to get into debt especially at such a young age x

YorkshireBoy

marywooyeah wrote: »

Because the ir is lower?

I thought it might be due to that.

However, since the OP is paying off in full, and has no plans to change this approach by the sounds of it, the interest rate is largely (totally?) irrelevant. The objective here is to establish and maintain a credit history, not rack up debt.

geekonthepc

marywooyeah wrote: »

Because the ir is lower? Sounds good alex but if you're only 19 be careful about getting too much credit as it can be tempting to splurge and you dont want to get into debt especially at such a young age x

I take your point, thank you, but I'm still on the credit building mission rather than the spending splurge. It's still being set to pay off in full - at the end of the day it's better than the Barclaycard. That's the primary reason for it. I have always put around £400 a month on by BC and don't wish to change that with my HSBC card.

My main thinking is, surely having a better card (ie not sub prime) will favour my credit rating in the long term?

YorkshireBoy

geekonthepc wrote: »

My main thinking is, surely having a better card (ie not sub prime) will favour my credit rating in the long term?

As I said earlier, nobody but you (and Barclaycard!) knows it's "sub-prime", because neither the lender's name or the word 'Initial' appears on your credit report.

Yes the £600 limit may give the game away, but then again so could the £1,250 limit on HSBC...because you can probably get £1,250 limits with Barclaycard Initial too.

At the end of the day though, managing 2 credit card accounts well will do more for your credit rating than managing just the one.

geekonthepc

Cheers for the advice

iAMaLONDONER

geekonthepc wrote: »

I take your point, thank you, but I'm still on the credit building mission rather than the spending splurge. It's still being set to pay off in full - at the end of the day it's better than the Barclaycard. That's the primary reason for it. I have always put around £400 a month on by BC and don't wish to change that with my HSBC card.

My main thinking is, surely having a better card (ie not sub prime) will favour my credit rating in the long term?

I'm doing the same!
So I have 2 CCs and 4 Current Accounts (for their various benefits) and I'm only 18!

I spend within my means