Credit card for furnishing my flat, perhaps £1,200, 18 months IFC?

P-Ride

Hi, I'm 27 and about to buy my first flat; in conjunction with someone else.

I work in sales and currently earn a base salary of just over £26k.

After tax, pension, student loan and £48 for an iPad my company provided (which will be paid off by March) I have £1,600 after tax each month.

(I do get an annual bonus, but am in a new territory, so will likely have my first bonus in 2015.)

I'm looking at £634 for mortgage/maintenance charge/insurance each month; bills/council tax of £134; Groceries of £300; and gym + phone just over £30 each.

This leaves me £466 each month for buying furniture and holidays, which will therefore be tight this year, given my fondness for snowboarding! Fortunately, I don't drink much.

I have a company car and my fuel is reimbursed for work mileage; although - annoyingly - it can take between five days and three weeks to come back!

I have exchanged and am soon to pay legal fees; and am currently looking at moving in to sleep on a mattress on my floor, with minimal furniture, as I won't have much cash left.

Or, I can get a credit card with 18 months interest free credit, buy a bed, wardrobe etc and by paying £40/month, have paid over half of, say, £1,200 off in that time.

This seems reasonable to me, as I have carefully calculated my budget for next year; and furniture is a one-off payment.

I have set up a second current account for my mortgage and bills, into which the total monthly sum is transferred a day or two after I am paid each month, so I know what is left is to spend, albeit carefully.

I should get a small pay increase in March 2014, as well as having finished paying off the iPad, leaving me a little above £500 a month, after essentials; and March 2015 could be big bonus time.

Barclays told me I've been pre-approved for a card with a £1,200 limit, but it has 34.9% APR - this sounds obscene, yes?

I find the idea of having a Barclays credit card appealing, because it will integrate with my existing Barclays online banking - but it's not THAT appealing!

Tesco's looks like it could be a good option?

My last Experian rating was 869/fair, owing to a couple of late phone payments between 8 and 11 months ago; although this rating was from July, so I probably only have 1 late payment in the last year. I also have a few credit searches on there, due to getting a mortgage, of course.

Which card would you recommend; and what is the best tactic to ensure I am approved first time and don't get into the spiral of declined credit?

Obviously I will wait until I complete on the property before getting one.

Thanks

P-Ride

The alternative to the 18 month 0%, which I'd need to transfer to another similar card, is going for Barclay's 'Simplicity', which has 7.9% on all purchases?

[Deleted User]

P-Ride wrote: »

Barclays told me I've been pre-approved for a card with a £1,200 limit, but it has 34.9% APR - this sounds obscene, yes?

No. This sounds about right with a lack of credit card history and some missed payments.

A 0% card may be beyond your reach at the moment. Beds and wardrobes are freely available on most freecycle sites, so I would start there, ssave your £40 a month and then buy something nicer down the road.

But I'd also recommend you start getting some decent credit history by geting and using some kind of credit card, even if it's not the one you want.

AndyBSG

Could you not look at a 12 month unsecured loan instead of a credit card or even a bank overdraft?

Both of those will work out a lot cheaper than a credit card!

Of course, my real advise would be to try and avoid credit as much as possible.

unimaginative_user_name

How secure is your job? What would happen to your credit card or loan repayments if you were made redundant?

I would seriously look to furnishing your flat with second hand stuff to start with just so you have the basics and then when your bonus comes you could do up one room at a time really nicely.

When I moved into my first unfurnished place I was grateful for the offer of lots of hand-me-downs and the money I had saved up for new furniture was concentrated on the living room as that was the most public room in the flat and the place where I spent most time awake!

I had a second hand bed, wardrobe and chest of drawers all given to me that I made do with until my next house move when I took the opportunity to replace the bedroom furniture with a small inheritance from me grandfather.

I moved around a lot in my twenties and early thirties and took each move as an opportunity to give one room a make over furniture-wise.

The other thing with home ownership is your have to be prepared for emergency repairs that a landlord would previously have responsible for. I would recommend using some of your surplus income to set up an emergency fund to draw on when you need it.

Vectis

P-Ride wrote: »

This leaves me £466 each month for buying furniture and holidays, which will therefore be tight this year....

Am I reading that correctly? You'll have £466 spare cash every month? And you think that's 'tight'?

Why do you need credit if you've got that much spare to spend each month on furniture and holidays?

Or have I misunderstood?

Cycrow

with that much spare a month you could easily furnish your home over a few months, you dont need to get everything in one go. You could also check if family and friends have anything spare they no longer needed.

when i first moved into an unfurnished place, the only thing i got straight away was a Bed, the rest i got over time

Tixy

I would advise against making any new credit applications between now and when you purchase the property. The mortgage lender will run another credit check just before completion and ideally this would show the same situation as when they did the initial credit search.

The_Boss

If you've just obtained a mortgage your financial circumstances have just changed drastically. I doubt any lender would grant you access to new credit for a while, especially considering the late payments.

Oh, and you don't have a rating/score - it's pretty much a number made up by Experian.

The_Boss

Furniture barn is a good place for relatively cheap furniture, especially their chester oak range. But as others have said, why not go with whatever you can get from others and build your way up as months go by.

P-Ride

Firstly, I'm definitely waiting until we've completed, as I understand that mortgage companies can check on finances at any time until then - after that, not sure what I have to lose by applying for a Tesco's credit card with 18 months at 0%?

I'm pretty keen on interior design. I have half the flat's furniture already, which all matches nicely; and I certainly plan to finish the rest in the same style. Most is Ikea, so hardly expensive, but just smart.

The key point is that I can afford the furniture over the next year; I can also afford the credit card repayments (£50 is 10% of post-bill cash), so I don't see what's wrong with buying now what I am going to buy over the next 12 months anyway?

RE: Credit ratings, it's true, I have no idea what having a mortgage does to that. My rating was reasonable until recently (I cancelled Experian when I got my mortgage); there will be perhaps one late phone payment left on my last 12 month's history (nearly a year ago now). But, as you say, Experian's an educated guess.

I did have a credit card about five years ago, which is fully paid off. I got up to £2-£3k then paid it off in one lump. Not sure whether this helps, or is too old?

£500 a month spare after bills/food definitely isn't poverty; but I enjoy snowboarding and wakeboarding a lot, so would like to increase this, so I don't have to save for two months to do a trip. I live in Cambridge also, so going out can get pretty expensive.