Credit Card at 18

ricky_v

BlakeWills wrote: »

Hi Guys,
Also, I've been told this is the quickest way to build up a credit score for someone my age - Spend a little, pay it back straight away - Is this true?

Yes, I was getting a 90% mortgage offer of £50-odd thousand at aged 22 on a wage similar to you, with a resonable rate, partially because I had a couple of years history where I was spending on a credit card and keeping within the T+C's of the credit agreement. Also being on the electoral register would of helped as well.

However heed what DebtFree14 is saying. Be very responsible with credit, don't be daft with the plastic and your ambition of home ownership in your early 20's will most likely become true

Smile_and_be_happy_x

My daughter is 20 this year. She's a student with a part time job.

When she turned 18 she first went on the electoral roll, a short while later she (on the advice of her dad & I) applied for a barclaycard initial, she got accepted, she uses the card just for petrol & other bits throughout the month & pays it off every month in full. The credit limit has been increased a few times but she never ever goes anywhere near the limit.

She also has a mobile phone contract, she pays this direct debit every month & the 24 month contract is up soon without any missed or late payments.

She has a student account with her bank & they sent her a credit card also - which she's never used.

We've never checked her credit but I would assume it's good. I just wanted her to build a credit history up as in the future she may need it. Like yourself.

My advice would be make sure you pay it off in full every month. Otherwise you'll always be playing catch up & get into it deeper & deeper. Also try your bank as they know your finances so may offer you a card. - good luck!

iAMaLONDONER

ricky_v wrote: »

Yes, I was getting a 90% mortgage offer of £50-odd thousand at aged 22 on a wage similar to you, with a resonable rate, partially because I had a couple of years history where I was spending on a credit card and keeping within the T+C's of the credit agreement. Also being on the electoral register would of helped as well.

However heed what DebtFree14 is saying. Be very responsible with credit, don't be daft with the plastic and your ambition of home ownership in your early 20's will most likely become true

Where in England can you buy a property for less than 60k?!

I am a Londoner btw lol! Where even parking spaces can sell for £300k lol!

Fruit_and_Nut_Case

iAMaLONDONER wrote: »

Where in England can you buy a property for less than 60k?!

I am a Londoner btw lol! Where even parking spaces can sell for £300k lol!

You could try Hull.

iAMaLONDONER

Fruit_and_Nut_Case wrote: »

You could try Hull.

I might buy it and move the bricks and all down to London lool!

bsms1147

Some people have been burnt by credit/debt in the past; some people use it wisely and to their advantage. You've got both sets of people here, and you're at that fork in the road where noone can say whether you're going to be sensible with money when you get a credit card, or less sensible.

However the fact you are here, asking these questions beforehand makes me feel like you are more likely to be the former. Many people feel it is important to have a good credit history, so when you really 'need' credit in the future (mortgage, etc), you have as many options available to you as possible. As others have said, there is no universal credit score, no magic number that you have that lenders see. You can only make your credit file as appealing as you can. Get yourself on the electoral roll when you can, and start at the bottom with credit products. A phone contract (if you need one) and a credit card. For many people that will be one with their own bank, for others it will be a credit-building card. Neither will have fantastically low interest rates.

To start off with, the best way to use a credit card is as a charge card, and to purely see it as an extension of your debit card or bank account. If you wold not buy something with your debit card (ie, you lack the funds, or simply wouldn't use your money on it), then do not purchase it on a credit card. That is to say, only buy what you would otherwise have bought.

Whether that's £10 a month or £200 a month, it doesn't matter, as long as you're not buying anything simply because you have a credit card.

Pay off the statement in full every month - after all, you already had the money to pay for each item, all a credit card is doing is deferring that payment by 20-55 days depending on when you bought it and when payment is due. Providing you do that, you won't get charged any interest, and your credit file will look better to a lender each time you do so.

There are other things to do and things to avoid, but that's the basics. Go into it fully informed, be sensible, and they are a useful tool.

Fruit_and_Nut_Case

iAMaLONDONER wrote: »

I might buy it and move the bricks and all down to London lool!

You could pile them up in the Tate and call it art.

SuperHan

It's a good idea to go with your bank in the first instance.

I'm a huge advocate of getting credit early. I got my first CC at 18 and then got a £150k mortgage (albeit joint) at 22.

However, make sure you set it up to pay by direct debit in full each month. This makes it just an extension of your debit card, and you take away the temptation of not paying. For my CC now, i have set up a new bank account on my online banking, and about once a week check the balance on my credit card and transfer that amount in to my other bank account. This way, when I check my bank balance, it shows me exactly what I have, even taking in to account my credit card spend.

Then a couple of days before the dd is due, I transfer the money back in to my main account so it's there when the CC take the direct debit