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Credit card confusion.

Hi, me and my fiance are looking at getting a credit card to pay for our honeymoon. Our wedding is next month and it has all been paid off so at the moment we are saving spending money, our gifts from the wedding will also go to the spending money for the honeymoon.

Neither of us have had a credit card before but we do have a mortgage with santander, we have individual debit card accounts with HSBC (me), Halifax (her) and then a joint account with Halifax in which we pay the money each month in which all our bills are paid (the account which we get £5 a month for paying a certain amount of money with.)

We are a bit confused with credit cards, we've read all the faqs and THINK we should be looking at the 19 month M&S interest free account (this is where we could also be massively wrong about what card to chose)

The honeymoon costs about £3500, is there an option to chose how much you want to lend or do they decide? We haven't gone through the application with M&S site incase credit checks take place although we've completed the MSE soft check and it recommended the M&S card. We WONT be taking on another card to pay off the debt after 19 months so I think the bit about balance transfers doesn't apply to us? Do we simply set up a direct debit like we would if we were to pay for electricity so if we arrange to pay off £200 a month for 18 months this would be then done or would you pay off a deposit of an initial £500 or so?

Sorry about the idiotic questions but we don't want to commit to anything incase it's not the correct thing we are looking for (we popped in a few bank branches today but couldn't get an appointment today and we don't have a day off together for a while so if we don't sort it soon then the honeymoon dates we are looking for would have come and gone!)

Thanks in advance.

Comments

  • Candyapple
    Candyapple Posts: 3,384 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    There is a list of cards here:
    http://www.moneysavingexpert.com/credit-cards/best-0-credit-cards?_ga=1.86530523.291274001.1427880417

    The Halifax one might be better, 20 months at 0% for spending, especially since your partner already has a bank account with them.

    When you apply, you have no choice as to how much the card provider will give you as a credit limit. This will be based on lots of criteria such as your salary, debt to credit ratio, credit history etc. You will usually only find out what limit they have given you at the end of the application, if successful.

    Yes you would need to set up a direct debit for the minimum monthly payment which varies but is usually either 1-2% of the balance. You can manually pay more throughout the month if you want with no penalties. If you put £3.5k on the card, to clear it you would need to pay £175 per month. Your minimum monthly payment will be roughly £70 (based on 2%) so you can either pay £70 for 20 months and then clear the remaining balance before the deal ends, or manually overpay an extra £100 per month.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • grumbler
    grumbler Posts: 58,629 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 1 April 2015 pm30 1:46PM
    puggo wrote: »
    The honeymoon costs about £3500, is there an option to chose how much you want to lend or do they decide?
    They decide.
    If it has been paid off, what relevance does it cost have to the credit limit?

    Don't expect to get a big limit on your first CC.
    We haven't gone through the application with M&S site incase credit checks take place although we've completed the MSE soft check and it recommended the M&S card. We WONT be taking on another card to pay off the debt after 19 months so I think the bit about balance transfers doesn't apply to us?
    WON'T
    Balance transfer is for the existing CC debt. You don't have any.
    Do we simply set up a direct debit like we would if we were to pay for electricity so if we arrange to pay off £200 a month for 18 months this would be then done or would you pay off a deposit of an initial £500 or so?
    Some providers allow only minimum and full payments by a DD. Some allow fixed amount as well. You can always make extra payments by other means.
    Leave it until you get accepted.

    I don't understand what 'deposit' you mean. Check M&S Credit Card Summary Box on the website for the minimum payments required.
  • InsideInsurance
    InsideInsurance Posts: 22,460 Forumite
    10,000 Posts Combo Breaker
    Partially correct

    Occasionally lenders will ask you what limit you want but most don't and you get what they offer, though you could ask them to reduce it if it is more than you wanted.

    If you pay by DD, which is the most sensible in my opinion, it will not be £200 but 2.5% of the balance or whatever M&S's minimum payment number is and so it wouldnt be paid off by the end of the 0% period. Being sensible you'd put the difference between the minimum payment and £200 into a savings account each month and then on the final month of interest free pay off the remaining balance.

    What most do is intend to do that, end up not doing it and then have an outstanding balance that they either need to transfer to another 0% deal or start paying interest on.
  • Thanks for the replies, things make a lot more sense now (what we were hoping to hear in the bank branches today)

    Ah that's a bit of an issue with you not being able to control how much you can have as an upper limit, obviously if we can only get a limit of £1500 that's under half the amount of what we need, would they not provide any indication at all in branch as we were going through the details with them, also how long does the process of being successful or rejection take?

    Again going back to only if we had £1500 on the card could we just go to another bank and get another card or would they see we would have taken one CC out?

    Again thanks so much for the replies.
  • Candyapple
    Candyapple Posts: 3,384 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    It’s worth noting too that if your partner goes into a Halifax branch they can ask an advisor to see if a credit card is offered to them on their internal system and what limit they will likely be given. But also double check what card they are offering before going ahead as it may not be for the 0% purchases one.

    If your partner does go into a branch, all she needs to do is go to the general paying in cash queue area and ask a till person to check on their screen what the internal credit lending facilities available to her are, she does not need to go in the side room and go through an entire application with an advisor for them to tell her this.

    Once you apply, the decision is 9 times out of 10 instant with decline/successful screen if you applied online. Sometimes it may say they’ll write to you to let you know, if that happens it’s 50-50.

    If you only get a low limit, yes there’s nothing stopping you from going to another card provider and applying for another card. Don’t apply for too many in a short space of time though as it will come across to lenders that you are desperate and will temporarily affect your credit rating.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • Brilliant, thank you very much.
  • drunk1
    drunk1 Posts: 50 Forumite
    PPI Party Pooper
    Since you bank with HSBC I would consider the First Direct Gold credit card. They currently hear 17 months 0%. I only say this as you bank with HSBC who own First Direct so if they see your finances going in and out you may stand a better chance with them and a decent limit to cover the honeymoon.

    Not sure if you'll qualify for the free £25 if accepted as you need a 1st Account with FD, you could argue and get it with your HSBC one if you can be bothered.
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