Credit card when I don't need one?

james_1989_2

Hi everyone

This is my first post to the forum so please be gentle!

I am in a dilemma at the moment about whether I should take out a credit card or not.

I am currently a nursing student at university going into my second year and hope to get a mortgage for a home after I qualify. I have done quite well saving up for a deposit and hope to have around 20-30k saved up within 3 years.

At the moment everything I buy is paid for either in cash or on my debit card (week to week spending, annual car insurance, mot etc). The only "credit" I have is my mobile phone contract which is always paid on time via direct debit.

Despite this I have been told that I will struggle to get a good mortgage due to my lack of credit history.

So my question is this, even though I don't need the credit should I take out out a credit card and pay it off monthly to help raise my rating?

I have always thought this would be a silly thing to do as I have always been able to pay on my debit card or in cash!

I have no idea how this whole credit rating thing works so please excuse me if this is a common question!

Many thanks

James

The_Boss

It's correct that you won't get a mortgage without a (good) financial track record.

So yes, it would be a good idea to get a credit card and repay in full. No need to spend large sums - just a few quid is fine - and as long as you pay back in time you will start t build a track record.

I'd suggest applying for one through your bank or if you have a student account see if a card can be added. In a year or so apply for another so there's more data reported.

zagfles

Credit cards aren't just for people who need to borrow. 60% of people pay their cards in full every month and never pay any interest.

They are a useful way to budget - you pay it once a month like other bills (phone, electric etc). You can set up a DD to pay it in full every month and you won't pay any interest. You can get a cashback card so you can earn a bit back, you get better protection when you spend on a credit card, fraud protection is better, and you can build up your credit rating.

Lots of people have credit cards who have no need whatsoever of credit.