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First Credit Card.

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Hi,

I've recently just moved into my first flat, and have noticed that money disappears very quickly! I'm starting to use some of the tips to start budgeting properly.

How ever I've been trying to look into getting a credit card to use in emergency's; Emergency medical appointments, stuff like that.

I've had a quick read through the forums and can't seem to find a thread that actually gives details on how to use, and how to pay back the money spent on a credit card.

In short, my questions would be;
What are the best kind of credit cards to get?
How do you pay back money spent on a credit card?
And are they're any tips and tricks to using a credit card that I should know about?

Comments

  • grumbler
    grumbler Posts: 58,629 Forumite
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    mjjobson wrote: »
    What are the best kind of credit cards to get?
    This depend on your needs, but with the first one you won't have too much choice. See MSE articles on CCs.
    For me it's the one that pays the highest cashback.
    How do you pay back money spent on a credit card?
    Minimum payment has to be made each month after the statement is issued and before the due date.
    If you pay the statement balance in full all interest on purchased is waived. Otherwise it's charged on a daily basis for each transaction.
    And are they're any tips and tricks to using a credit card that I should know about?
    Don't use it for cash withdrawals and for gambling transactions.
  • BrookesAndrew
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    What are the best kind of credit cards to get?

    That depends on your credit rating. If you have a good credit rating then you want to get a credit card that is going to be good for you. If you want it for emergencies than when you actually use the credit card it will be for things that are quite big. Things that you can not do with your normal money. In that case then you want to a credit card that has 6 months no interest. So you can pay the money back each month without getting any interest on the card. Have a look around and ask your self what is your credit rating like. If this is your first credit card then your credit rating isn't going to be amazing unless you have had a phone bill or something like that.

    How do you pay back money spent on a credit card?

    A credit card company wants there money so they do make it quite easy to pay it off. With my credit card I can pay it back on the phone or online. Most companies will have online banking or something like that so its easy to pay it back. When you get the card though all this will be explained.

    And are they're any tips and tricks to using a credit card that I should know about?

    The best tip I can give you is just to keep up to date with the payments. Remember when you spend money on your credit card this money is not yours and you will have to pay it back. They can get out of control very quickly and that is because people forget that they need to pay it back. Everytime I buy something on my credit card I buy it because I know I have the money in my account or I am a few days away from pay day and I would of got it anyway then.
  • carousels
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    The best type of credit cards to get would depend on your credit history. By what you've said, it seems to me that you may have very little credit history. If this is the case then I think you may need to start with a sub prime credit card. These are for people with bad history or very little history. Everybody has to start somewhere. Cards like Capital One, Barclaycard Initial, Aqua and Vanquis would be the ones to try for. Or, if you are a student, you can get a student credit card.

    However, these cards all have a high APR, so if you don't pay back the full amount each month, you'll incur hideous charges. To build up, your credit history, I suggest you spend a small amount each month ( maybe £20 - £30 ) and pay it off in full each time the statement arrives. This will improve your credit history and then, you can apply for a card with a much lower interest rate and more perks.

    As for paying the money back, when you get a credit card, the company will ask you if you want to set up a direct debit. This allows money to be automatically taken from your bank account to pay either a small percentage or the full amount of the money you owe on the credit card. You can choose to pay back

    - the minimum amount ( this is usually 5% of your balance )
    - a set amount ( where you decided how much you want to pay them a month, for example: £10 )
    - the full amount ( if you have a small balance, this shouldn't be a problem )

    It's always best to pay off the full amount. That way, you won't incur much interest.

    As for tips and tricks ... My advice would be to use your card every month, regardless of whether there is an emergency or not. You have to establish a positive history with credit. So for example, if they give you a limit of £250, you can:

    - spend £20 a month of a food shop, maybe.

    This will leave you with over £200 for any emergency that should arise.

    This way, you are keeping the credit aside for an emergency, like you wanted AND you are still using it every single month and paying it back, establishing a good credit history.

    After about six months or so, apply for a better credit card with less interest and more perks.

    Good luck!
  • mjjobson
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    Thanks for all the help!

    The only credit that I've got is from a phone bill, so I think I'll definitely do the spending £20 a month thing.

    Time to do a bit more digging :)
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    The best tip for CC use is to use the thing regularly but ALWAYS pay in full by the pay by date.
    Don't use it as a debt machine.
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