New to Credit Cards

Mr0

Hi.

I never had a credit card before and am thinking of getting one for the first time.

I don't really need to borrow the money but am thinking about using it for every day spending for their perks such as cash back. I dont plan on any additional spending, just money I would have paid anyway in cash or current account and am 100% confident that I would not run into any debt problems, I dont have any debt at all.

I looked at the Santander 123 CC and it looks good for that. I spend about £60 a week on petrol alone and then there is the 18 months 0% that I saw on the news today.

But then I clicked on one of the pre-eligibility links on this website and I got a weak chance (20%).

Question, is this credit card a 'premium' one where only the fairly wealthly can get their hands on one? If so should I not even bother.

My main current account is with Santander. I have a decent amount saved up and they can even check my spending history. Would this make any difference?

I go to a branch every other week to make deposits anyway so I could just ask. Should I even bother to apply for one next time I go in? Are there any negatives to being turned down?

If that doesn't work are their any alternatives?

Thanks.

grumbler

Normally people with no/little credit history for the first CC are advised to apply to the bank they have a current account with. So, yes, this can make some difference.

Every application leaves a credit search record in your credit file(s), but the rejection/acceptance isn't reported. One credit search has a very small and short-lasting effect: Credit Scores

DBear85

I also got my first card recently, and also with Santander.

I used to live by my debit card and could easily carry that on, the only reason I got a credit card - CREDIT RATING!

It's a good idea to do as you said, put things on that you know you can pay off instantly and save it for those difficult times (my car just cost £640 to sort out),

Are you registered on the electoral roll at your current address? That has a big positive impact on your credit score.

Mr0

Yes credit rating, that's something I didn't think about.

I went to the bank today and they gave me a credit card in a flash. I think there has to be something I am missing, I didn't expect to get a credit limit of £3200 for someone who has never had one before. Is this normal?

[Deleted User]

It's not uncommon from your own bank. They know your financial history better than anyone else.

Use it wisely and you should be able to upgrade to something better in time.

elle_may

AND ALLWAYS PAY IN FULL. I have always used cc to pay for every thing as i get cash back, and i have had over £100 this year just by useing it like a debit card. DONT pay them any interest let them pay you.And please set up a direct debit for your min payments, then you will not incurr late charges. Cc are okay if you keep on top of them, they are not free money, its has to be payed back. Dont go overboard.

Mr0

Just a quick follow up question. There is 18 month 0% on purchases and a minimum payment of 1% of the balance (minimum £5). I told them to set up this by direct debit today. So I guess it makes sense to jsut pay the minimum amount for 18 months.

I saw my credit score with this bank, it was ~650. Would it be better for my score to pay it off in full each month or to pay only pay the minimum to take advantage of the 0%, or doesnt it matter?

I would have enough money anyway to pay it off, I wont go on a crazy spending spree.

What do you mean, something better? Do you mean the credit limit will increase? They told me that £3200 was what they can offer, and allowed me to decrease it, but if I wanted to increase it in the future I would be credit checked again, so I chose the max. Is there anything good or bad with unused credit?

grumbler

Mr0 wrote: »

..Would it be better for my score to pay it off in full each month or to pay only pay the minimum to take advantage of the 0%, or doesnt it matter?

Minimum payments now are reported to CRAs and reportedly have slightly negative effect on the credit rating.
Paying a little more than minimum isn't worse than paying in full.

However, beware that if you make extra small payments, some CC companies can correct the DD amount accordingly.

Mr0

grumbler wrote: »

Minimum payments are now are reported to CRAs and reportedly have slightly negative effect on the credit rating.
Paying a little more than minimum isn't worse than paying in full.

However, beware that if you make extra small payments, some CC companies can correct the DD amount accordingly.

Not quite sure what you mean by correcting the DD amount?

So for example, if I have a bill of £250 for a month, the minimum payment is £5. If this is taken by direct debit, and say I wanted to pay a little more than this e.g. £5 extra, I can set up a standing order to transfer this amount to the card from the current account. Would the CRAs report still get a 'slightly negative' hit?

In other words, do they only take into account one payment at a set date (the DD they set up at minimum account), or do all payments over a set period count for this purpose.

leeroy2009

think he means, even if you pay a little before the dd is taken some cc will reduce the dd by what you have paid them before the dd was took


Barclaycard (in my case) will reduce the direct debit amount if you pay amounts before dd is took


mbna (aa card in my case) always take the full dd even though I make extra payments

bengal-stripe

Mr0 wrote: »

So for example, if I have a bill of £250 for a month, the minimum payment is £5. If this is taken by direct debit, and say I wanted to pay a little more than this e.g. £5 extra, I can set up a standing order to transfer this amount to the card from the current account. Would the CRAs report still get a 'slightly negative' hit?

With Santander, if your additional payment arrives 5 or more days before the DD is due, the computer will adjust your DD or cancel it. If the additional payment is booked less than 5 days, the DD will go through regardless (being already on it's way).

If you want to make additional payments, use FP transfer, then you have complete control over the timing. My additional payments go out the same day the DD hits my bank account. You can set them up weeks ahead to leave at a particular day.

Also, with your first DD, check the invoice that the DD is in place. Only if the invoice says: "DD of £ xx will be taken on day yy" can you rely on the DD being taken. Frequently the first invoice needs manual payment.