Thinking of getting my first credit card

rock-y-beach

I have a good credit rating and thinking of getting a credit card but this will be my first time. I am just finding them all very confusing and was hoping someone might help me out.

I am ideally looking for one with 0% interest on purchases for so many months and wondered if anyone knows of one that fits the bill?

I was looking at tesco credit cards as these offer 0% interest for the 1st 18 months. I could get the card paid off well before that time, so would I not incur any charges whatsoever? I was thinking of the tesco card as it gives you extra clubcard points on purchases but there might be something even better out there?

I suppose I am a bit confused on how a credit card would make money if its 0% on purchases for 18 months and I pay it off in say 12. Surely there is a catch somewhere? It's probably only because I have never had one before so am new to it but looking online at information has confused me.

Any help would be much appreciated! thanks!

redcard

rock-y-beach wrote: »

I suppose I am a bit confused on how a credit card would make money if its 0% on purchases for 18 months and I pay it off in say 12. Surely there is a catch somewhere? It's probably only because I have never had one before so am new to it but looking online at information has confused me.

Any help would be much appreciated! thanks!

They make money because people don't control their spending, have a balance they can't manage after the interest-free period, and end up in spiral of debt for the rest of their lives.

What do you need the credit card for?

InsideInsurance

There are plenty of tools that identify the best cards for given circumstances on both this site and aggregators like money supermarket.

Credit card companies make their money, traditionally, from 3 sources:

1) Interest charged or annual fees paid by the customer - fees are rare these days outside of the top tier cards

2) They take a percentage of each transaction. So you pay a merchant £100 by credit card they will probably get around £98 with different companies along the money flow taking a slice

3) Selling other products/ services to you

Example of 3 used to be things like PPI or ID protection etc but now is moving into things like a 3% discount at a shop where that shop is also giving the card company a 2% "cashback" for the referral (similar to how cashback sites operate)

CLAPTON

rock-y-beach wrote: »

I have a good credit rating and thinking of getting a credit card but this will be my first time. I am just finding them all very confusing and was hoping someone might help me out.

I am ideally looking for one with 0% interest on purchases for so many months and wondered if anyone knows of one that fits the bill?

I was looking at tesco credit cards as these offer 0% interest for the 1st 18 months. I could get the card paid off well before that time, so would I not incur any charges whatsoever? I was thinking of the tesco card as it gives you extra clubcard points on purchases but there might be something even better out there?

I suppose I am a bit confused on how a credit card would make money if its 0% on purchases for 18 months and I pay it off in say 12. Surely there is a catch somewhere? It's probably only because I have never had one before so am new to it but looking online at information has confused me.

Any help would be much appreciated! thanks!

if you haven't had a CC before you may struggle to get one with a promotion like 0% on purchases although no real harm in trying:

if rejected then try your bank or go for a starter card like barclays initial, vanquish etc : they all charge high aprs but if you pay in full each month then you aren't charged anything



why do you need to go into debt?
better to save first then spend.


and CC make money from the the 1-3% they charge retailers.

rock-y-beach

Thanks for the advice.

I've just moved house so need to buy a few things to do it up which I can't afford now but would easily be able to pay it back within 12 months. I was thinking of a loan but the interest rates are horrendous which is why I was thinking of a credit card. I would cut it up once the money is paid back and never use it again.

MrSilk

rock-y-beach wrote: »

Thanks for the advice.

I've just moved house so need to buy a few things to do it up which I can't afford now but would easily be able to pay it back within 12 months. I was thinking of a loan but the interest rates are horrendous which is why I was thinking of a credit card. I would cut it up once the money is paid back and never use it again.

If you think the interest rates on the loans are horrendous, wait until you see the interest rates for the credit cards :rotfl:

Also, if it's your first CC, expect a limit of between £100 - £300.

molerat

A credit card is not for buying things that "you cannot afford now" but for buying things that you can afford now and getting a perk for buying them such as 1 - 4% cash back and the money staying in your bank account earning 3% for up to 56 days

Morglin

Halifax and Tesco are doing 0% interest deals - but, as with all credit cards, you can only get a good deal for yourself if you pay them off every month.

Once you start to pay interest, they become expensive.

Lin

CLAPTON

Morglin wrote: »

Halifax and Tesco are doing 0% interest deals - but, as with all credit cards, you can only get a good deal for yourself if you pay them off every month.

Once you start to pay interest, they become expensive.

Lin

whatever does that mean?

InsideInsurance

CLAPTON wrote: »

whatever does that mean?

That if you dont pay it off in the X month interest free period then you start paying interest. Most of these cards have a typical APR of around 20% so much higher than a loan

jamesperrett

Morglin wrote: »

Once you start to pay interest, they become expensive.

Unless you find a decent deal - some credit cards can compete with good personal loan deals like Barclaycard's 6.9% life of balance rate for balance transfers.