Advice Needed For First Credit Card!

no1wf

I don't want a credit card, neither does my other half, we've got on perfectly well over the years with direct debits. However, what we do really want is a mortgage. We're saving up for a deposit and have been told a few times now that lenders like to see well managed credit and the direct debits might not be enough.

Obviously I want to do whatever we can to be accepted for a mortgage and be lent the most we can. So my thought was to apply for a credit card and just use it to buy petrol for the car with and then pay if off in full every month with money that I already have set aside for petrol every month anyway.

My first question is: do you think this is a good idea?

YorkshireBoy

Yes.


And to answer the question in your other thread, it would help if your partner got one too.


Mortgage lenders will take any balance into account when doing affordability checks, but since there will only be a tankful of fuel and a couple of weeks groceries on there (at any given moment in time) the effect will be negligible.

no1wf

YorkshireBoy wrote: »

Yes.


And to answer the question in your other thread, it would help if your partner got one too.


Mortgage lenders will take any balance into account when doing affordability checks, but since there will only be a tankful of fuel and a couple of weeks groceries on there (at any given moment in time) the effect will be negligible.

I am willing to get one as I know I will only use it for petrol and it will be paid off every month anyway. I am 99% sure he will not get one as he's dead set against it and doesn't have anything to put on it anyway.

Can I ask what you mean by "the effect will be negligible"? Does it mean lenders will consider it the same as they would if there was £100's on it?

YorkshireBoy

Mortgage lenders will not be bothered about a balance not exceeding a month's normal spending.


However, in my experience (although not recent) lenders used to take 36% of the debt (which is roughly 12 months of 3% minimum payments) from your income before applying lending multiples. So, for example, if you have a £400 balance on your card when you make the mortgage application they'll deduct £144 from the amount they'll offer you. So subtract the £144 from, say, £120,000 and you'll see what I mean by "negligible".

no1wf

YorkshireBoy wrote: »

Mortgage lenders will not be bothered about a balance not exceeding a month's normal spending.


However, in my experience (although not recent) lenders used to take 36% of the debt (which is roughly 12 months of 3% minimum payments) from your income before applying lending multiples. So, for example, if you have a £400 balance on your card when you make the mortgage application they'll deduct £144 from the amount they'll offer you. So subtract the £144 from, say, £120,000 and you'll see what I mean by "negligible".

Ah okay I see

Petrol costs me about £40 a month so that's all that would go on it and hopefully just one of us having one will still improve our chances.

I don't want to be going to see people for a decision in principle only to find out we need a credit card with 6 months worth of history on it, I don't want to waste time see.

So my decision now is to pick a card.

I do already have an account with Santander where we're saving for our deposit, it's open on a Saturday which is handy to go and pay the bill while doing the shopping. Unless I could do it online. I was looking at this card:
http://www.santander.co.uk/csgs/ContentServer?c=Page&canal=CABBEYCOM&cid=1324567969837&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateW2

I don't know credit card lingo but I imagine 0% for 18 months is no interest on any unpaid balance for 18 months? Then it says monthly rate is 1.457% and annual rate is 18.9%.... o.O

I wouldn't be doing any cash withdrawals or balance transferring and once we had our mortgage I would probably just close the account unless recommended otherwise

Is there anything I should look out for, anything not right, or would another card suit me better?