(Stupid question?) Is a 6.5% Credit Card better than a 19.94% EAR Lloyds OD?

GeorgeRob

Well, if she gets a credit card she can spend on that, and then the monthly fees for the bank account will be smaller won't they, if we can keep her wages in there for as long as possible each month?

So she'll be reducing her OD by £50 a month, and paying more like £15 in fees.

CLAPTON

GeorgeRob wrote: »

Well, if she gets a credit card she can spend on that, and then the monthly fees for the bank account will be smaller won't they, if we can keep her wages in there for as long as possible each month?

So she'll be reducing her OD by £50 a month, and paying more like £15 in fees.

if the fees are based on number of days in the OD then yes, staying in the black for as many days as possible will reduce fees.

GeorgeRob

OK one last question - Which of these lloyds credit cards should she get? She may as well get a lloyds one as she banks with lloyds, so it will be easier to manage via internet banking.

So this is a card that she will use just to buy petrol each month, repaying in time every time in order to build a positive credit history.

If someone could advise which of these cards should be the easiest to get, and which would be most suitable for this purpose that would be great. Thanks.

GeorgeRob

I'm guessing as they are all pretty low rates cards, she might struggle to get any of those actually.

So we've just done a 'soft search' using the MSE tool, and these are the results, with the card which is the most likely for her to get at the top:

90% Chance - Capital One Classic Extra
For those with an OK history: 0.5% cashback + £10 bonus 34.9%

90% Luma
For those with a limited history: credit rebuilding card 35.9%

90% Capital One Classic
Can get it even with CCJs 34.9%

80% Capital One
0% on balance transfers until January 2015 34.9%

70% Aqua Advance
Can get it even with CCJs or defaults 34.9%

70% Aqua Classic
Can get it even with CCJs 29.7%

50% Vanquis
Offers credit limit increases when you manage your account well 39.9%

20% Aquis Credit Card
For people with a poor credit history 29.8%

GeorgeRob

Am I right in thinking it doesn't really matter which card she gets, as the plan is to just buy petrol with it each month (about £40) and pay it off when the statement is generated each month.

Am I also right in thinking she may as well get as small a limit as possible for it?

What would that be? £200?

Thrugelmir

GeorgeRob wrote: »

So this is a card that she will use just to buy petrol each month, repaying in time every time in order to build a positive credit history.

Will have a negligible impact. As demonstrates nothing.

GeorgeRob

Thrugelmir wrote: »

Will have a negligible impact. As demonstrates nothing.

Okay.. Well that's going against everything that other people on this thread and MSE themselves say on their website.

Could you elaborate please?

How else would you recommend building positive credit for someone with practically no credit history (good nor bad)?