First time credit card potential buyer

EthelbertHumphry

I want to get a credit card to build my credit score and maybe get some rewards. I am 18 and 1/2 and a small/medium business has employed me as an apprentice earlier this month. I want to get a credit card for the many benefits and I will be paying off the balance in full each month via an auto-payment to a current account. I have a current account with Santander and I have a few questions.

Whom should I speak to first about setting up a Barclaycard initial credit card, Santander or Barclays? Will Santander even be of much help?

I also do not really know about how the cards are set up and linked to accounts. Would I link the credit card to my current account or would I need to setup some kind of second account with Santander or Barclays?

If I chose to get a NISA next year, would I simply link the card to the NISA then close the second account leaving only the NISA and the current account?

I am not sure how the dates work with credit cards. I would assume that you get to choose a date sometime after your pay date so that you have the money to pay off the balance. If this is true, what date is advisable? Would it be a few working days after your pay date?

In addition, my pay starts at around (for confidentiality reasons) £120-£155 a week but could rise depending on performance, is it advisable I wait until I earn a certain amount? The Barclay card summary states that to keep the interest low you need to make sure a "£1000 purchase is added to your account on the 1st of the month and no further transactions made”. Does this mean that for it to stay at 0% I need to be earning at least £1000 a month and have that in the linked account?

What is the easiest way of monitoring your credit balance to make sure it does not go over? E.g., can you set it up to stop you spending more than you will earn when the month is over and can you set up a phone alert?

If the annual APR is 34.9% and there is '0% interest on purchases for 3 months from account opening' but I pay off the balance in full every month, do I lose a single bit of money ever on this card?

Lastly, I currently am on vehicle finance for 36 months and have not missed a payment. Does this affect my credit score/history (in a good way)? Moreover, would it be advisable to switch to paying the finance on the credit instead of debit? Would I also be able to make partial early repayments on the vehicle finance on the money I have spare via credit card that I know I can afford at the end of the month?

When would you advise I start on the credit card?

Bonus question: why do people draw money out of their credit account even though there are heavy charges, why not draw out of a current account?

I understand many of these questions are "down to personally choice", "up to you", "subjective", but most people have credit cards and I do not mind subjective answers to my subjective questions if it is that best you can give.

I look forward to your responses as I am new to this forum but am a long time lurker of the forum and website.

CLAPTON

EthelbertHumphry wrote: »

I want to get a credit card to build my credit score and maybe get some rewards. I am 18 and 1/2 and a small/medium business has employed me as an apprentice earlier this month. I want to get a credit card for the many benefits and I will be paying off the balance in full each month via an auto-payment to a current account. I have a current account with Santander and I have a few questions.

Whom should I speak to first about setting up a Barclaycard initial credit card, Santander or Barclays? Will Santander even be of much help?

I also do not really know about how the cards are set up and linked to accounts. Would I link the credit card to my current account or would I need to setup some kind of second account with Santander or Barclays?

If I chose to get a NISA next year, would I simply link the card to the NISA then close the second account leaving only the NISA and the current account?

I am not sure how the dates work with credit cards. I would assume that you get to choose a date sometime after your pay date so that you have the money to pay off the balance. If this is true, what date is advisable? Would it be a few working days after your pay date?

In addition, my pay starts at around (for confidentiality reasons) £120-£155 a week but could rise depending on performance, is it advisable I wait until I earn a certain amount? The Barclay card summary states that to keep the interest low you need to make sure a "£1000 purchase is added to your account on the 1st of the month and no further transactions made”. Does this mean that for it to stay at 0% I need to be earning at least £1000 a month and have that in the linked account?

What is the easiest way of monitoring your credit balance to make sure it does not go over? E.g., can you set it up to stop you spending more than you will earn when the month is over and can you set up a phone alert?

If the annual APR is 34.9% and there is '0% interest on purchases for 3 months from account opening' but I pay off the balance in full every month, do I lose a single bit of money ever on this card?

Lastly, I currently am on vehicle finance for 36 months and have not missed a payment. Does this affect my credit score/history (in a good way)? Moreover, would it be advisable to switch to paying the finance on the credit instead of debit? Would I also be able to make partial early repayments on the vehicle finance on the money I have spare via credit card that I know I can afford at the end of the month?

When would you advise I start on the credit card?

Bonus question: why do people draw money out of their credit account even though there are heavy charges, why not draw out of a current account?

I understand many of these questions are "down to personally choice", "up to you", "subjective", but most people have credit cards and I do not mind subjective answers to my subjective questions if it is that best you can give.

I look forward to your responses as I am new to this forum but am a long time lurker of the forum and website.

to get a CC you apply to the CC owner

so if you want a barclaycard you apply to barclaycard
if you want a santander CC then you apply to Santander

you can do this online if you wish but read the details very carefully

if you wish to pay in full each and every month then the best was is to set up a direct debit
to do this for a barclaycard you ask barclaycard to set it Up (this usually happens at the application stage) : they will ask the sort code and account number of your bank acc!!!!
often you don't get a choice of date but sometimes you do

you can monitor your spending by accessing your a/c online but it best not to go near your credit limit to avoid accidental going over.

if you pay in full each month by the pay date then you pay no interest UNLESS you withdraw cash (gambling, foreign currency often counts as cash)

saving a/cs have little to do with CCs
so you can have :-
1 or more current bank account
1 or more CCs
1 or more savings a/cs

EthelbertHumphry

CLAPTON wrote: »

to get a CC you apply to the CC owner

so if you want a barclaycard you apply to barclaycard
if you want a santander CC then you apply to Santander

you can do this online if you wish but read the details very carefully

if you wish to pay in full each and every month then the best was is to set up a direct debit
to do this for a barclaycard you ask barclaycard to set it Up (this usually happens at the application stage) : they will ask the sort code and account number of your bank acc!!!!
often you don't get a choice of date but sometimes you do

you can monitor your spending by accessing your a/c online but it best not to go near your credit limit to avoid accidental going over.

if you pay in full each month by the pay date then you pay no interest UNLESS you withdraw cash (gambling, foreign currency often counts as cash)

saving a/cs have little to do with CCs
so you can have :-
1 or more current bank account
1 or more CCs
1 or more savings a/cs

Thank you. Should I set up some type of high interest account before setting up the CC or should I leave it linked with the current account until next year for the NISA?

agrinnall

See responses below.

EthelbertHumphry wrote: »

I want to get a credit card to build my credit score and maybe get some rewards. I am 18 and 1/2 and a small/medium business has employed me as an apprentice earlier this month. I want to get a credit card for the many benefits and I will be paying off the balance in full each month via an auto-payment to a current account. I have a current account with Santander and I have a few questions.

Whom should I speak to first about setting up a Barclaycard initial credit card, Santander or Barclays? Will Santander even be of much help? You need to apply to Barclaycard, it's nothing to do with Santander, you just need to give Barclaycard the details of your Santander account so that they can set up the DD.

I also do not really know about how the cards are set up and linked to accounts. Would I link the credit card to my current account or would I need to setup some kind of second account with Santander or Barclays? As above.

If I chose to get a NISA next year, would I simply link the card to the NISA then close the second account leaving only the NISA and the current account? Not relevant, a NISA is a completely separate account that certainly has nothing to do with your credit card, and may not have anything to do with your Santander account.

I am not sure how the dates work with credit cards. I would assume that you get to choose a date sometime after your pay date so that you have the money to pay off the balance. If this is true, what date is advisable? Would it be a few working days after your pay date? Assuming you are allowed to choose your date then yes, a few days after your pay date is a good option (assuming you get paid on the same date each month).

In addition, my pay starts at around (for confidentiality reasons) £120-£155 a week but could rise depending on performance, is it advisable I wait until I earn a certain amount? The Barclay card summary states that to keep the interest low you need to make sure a "£1000 purchase is added to your account on the 1st of the month and no further transactions made”. Does this mean that for it to stay at 0% I need to be earning at least £1000 a month and have that in the linked account? I can't see where it says this but I suspect it's just an example of how to minimise interest. It doesn't seem to have anything to do with how much you earn.

What is the easiest way of monitoring your credit balance to make sure it does not go over? E.g., can you set it up to stop you spending more than you will earn when the month is over and can you set up a phone alert? Don't know, but for me I enter every transaction into a money management system on my laptop (I use MS Money) so I always know what my balance is.

If the annual APR is 34.9% and there is '0% interest on purchases for 3 months from account opening' but I pay off the balance in full every month, do I lose a single bit of money ever on this card? No, paying full balance every month means you never pay anything in charges (I have done this for many years and the banks earn nothing directly from me).

Lastly, I currently am on vehicle finance for 36 months and have not missed a payment. Does this affect my credit score/history (in a good way)? Moreover, would it be advisable to switch to paying the finance on the credit instead of debit? Would I also be able to make partial early repayments on the vehicle finance on the money I have spare via credit card that I know I can afford at the end of the month? It should be good for your credit record, but the way to make sure is check with the credit reference agencies, it's probably a good idea to do this before applying for the card anyway in case any mistakes have been made that you can get corrected. Don't know whether you can overpay, that would depend on your agreement.

When would you advise I start on the credit card?

Bonus question: why do people draw money out of their credit account even though there are heavy charges, why not draw out of a current account? You can only take money that you actually have from a current account unless you also have an overdraft, for some people it's easier to take the money from the credit card and pay a higher rate than arrange an overdraft.

I understand many of these questions are "down to personally choice", "up to you", "subjective", but most people have credit cards and I do not mind subjective answers to my subjective questions if it is that best you can give.

I look forward to your responses as I am new to this forum but am a long time lurker of the forum and website.

bigadaj

Right, a lot of questions there.

Firstly it might be best waiting for a couple of pay months to hit your account. Then look at applying to Santander as your main account is with them, or look at the credit builder cards. You need to set up a direct debt, ideally to pay in full, to make sure you don't miss a payment and don't pay interest. You will probably need to get a bit of history before getting a rewards card. If you want a card with Barclays then you need to apply to Barclays, Santander won't have anything to do with this.

In terms of payment then if you pay in full you have around 6 weeks interest free, just make sure you have the money in your current account for the direct debit. Even if the dd is set up then you need to check the statement each month that all the transactions are correct.

A Nisa is a totally different account, when you get to saving up towards the end of the tax year then post on the savings board for some feedback on that.

Not sure about your reference to the £1000, I'm terms of keeping the balance within limits then you need to record and monitor, there's nothing stopping you making a payment in the middle of the month if you are starting to get close to your limit.

If you pay in full then you don't pay any interest, to take advantage of interestu free purchases you can just pay the minimum for the length of teh deal but make sure you pay the full balance before the end of the deal.

In terms of your vehicle finance then just carry on with payments, overpayments may save you money but check your contract.

EthelbertHumphry

agrinnall wrote: »

I can't see where it says this but I suspect it's just an example of how to minimise interest. It doesn't seem to have anything to do with how much you earn.

bigadaj wrote: »

Not sure about your reference to the £1000

When I did a soft search/pre-application check, I read their summary initial box and it said this:

Pay less interest with larger monthly repayments
The example below assumes the following:
£1000 purchase is added to your account on the 1st of the month and no further transactions made
Minimum payment is made each month on payment due date
Standard Rate (34.9% p.a.) is charged
Calculation includes any introductory rate on purchases.
Credit limit is not exceeded

CLAPTON

EthelbertHumphry wrote: »

When I did a soft search/pre-application check, I read their summary initial box and it said this:

this is about what might happen if you didn't pay in full each month

forget about that : as long as you pay in full then you pay no interest

EthelbertHumphry

Also, I am still not really understanding the main principles to why people get credit cards. I am only thinking about getting one because of the credit history needed to buy a house and maybe the cashback or other rewards, but they would not be worth getting the CC without the credit history. Why is being able to keep your real money until the end of the month so good? If you can afford to pay the balance at the end of the month, then all you are really saying is that you could have been able to afford to buy what you bought this month, in the next month, so why didn't you just wait a month?

My CC knowledge is lacking because only my dad used to have CCs and he is in massive debt now because he was using them to "fund having kids because you cannot fund them any other way". And I didn't learn about them in school. I am researching them online heavily.

CLAPTON

EthelbertHumphry wrote: »

Also, I am still not really understanding the main principles to why people get credit cards. I am only thinking about getting one because of the credit history needed to buy a house and maybe the cashback or other rewards, but they would not be worth getting the CC without the credit history. Why is being able to keep your real money until the end of the month so good? If you can afford to pay the balance at the end of the month, then all you are really saying is that you could have been able to afford to buy what you bought this month, in the next month, so why didn't you just wait a month?

My CC knowledge is lacking because only my dad used to have CCs and he is in massive debt now because he was using them to "fund having kids because you cannot fund them any other way". And I didn't learn about them in school. I am researching them online heavily.

the main reason to get a CC is indeed to build a credit record for future mortgage application.

however they do have other benefits (not essential)
-some provide benefits, airmiles, cashback, coupons
-to hire a car or book a hotel room it's sometimes almost essential to use a CC to guarantee the booking
-there are certain protection (google section 75 CC protection)

katejo

EthelbertHumphry wrote: »

Also, I am still not really understanding the main principles to why people get credit cards. I am only thinking about getting one because of the credit history needed to buy a house and maybe the cashback or other rewards, but they would not be worth getting the CC without the credit history. Why is being able to keep your real money until the end of the month so good? If you can afford to pay the balance at the end of the month, then all you are really saying is that you could have been able to afford to buy what you bought this month, in the next month, so why didn't you just wait a month?

My CC knowledge is lacking because only my dad used to have CCs and he is in massive debt now because he was using them to "fund having kids because you cannot fund them any other way". And I didn't learn about them in school. I am researching them online heavily.

You are taking exactly the right attitude towards credit cards. It is similar to mine and I rarely pay interest . I prefer to save for things. However the cards do have a use! It is worth building a good credit record if you hope to get a mortgage later. Another value is the protection provided by the credit card. Let's say that you book a holiday online or order something from a website. As long as the total amount spent is over £100 and you pay for part of it with your card, you will get a refund if the airline goes bust or the website is fake.

EthelbertHumphry

Got accepted and first thing; set up a direct debit to pay the statement balance in full each month.