Student with first credit card - how much of my credit limit should I spend?

ViolaLass

grumbler wrote: »

It might become a problem at some point if the OP routinely keeps spending up to 90%+ of the limit.

Why? (assuming they're paying off in full each time)

grumbler

If the credit limit gets bigger and bigger, at some point it might get really difficult to pay the statement balance off in full.

The point was that the limit is just a limit, not a target to spend 90%+ of it.

ViolaLass

grumbler wrote: »

If the credit limit gets bigger and bigger, at some point it might get really difficult to pay the statement balance off in full.

The point was that the limit is just a limit, not a target to spend 90%+ of it.

We agree that it's about approach but I would argue that as long as you're spending money that you've budgeted then it doesn't matter how close to your limit you get.

marksoton

rehanmalik3030 wrote: »

Get rid of the card!!! Now!!!

You're a plank. Educate yourself how to CC's can actually make you money rather than cost you before posting such nonsense.

cheesetoast

rehanmalik3030 wrote: »

Get rid of the card!!! Now!!!

You are already in debt to them which is obvious by your high utilisation rate.

Not necessarily. He might be thinking that using up to the limit is better for his credit rating than using, say, £10 a month. He'd be wrong, but he might be thinking it.

kelloggsnutty

Thank you everyone for the replies.

So as far as I understand it, it's definitely best to not go near the limit right? At the moment I'm only spending a little bit on my credit card each month, and paying it off straight away when the bill comes, just to show that I've been using a credit card and building a history.

Also I shouldn't be applying for other credit cards with benefits or applying for current accounts yet because I don't have a job or income yet.


My normal monthly budget for rent, bills, groceries etc has me spending £600-£700 a month. Only a very tiny bit of it goes on my credit card (and gets paid off when the bill comes), and so the majority of my spending is simply paid through my student bank account.

If my credit limit went up, more of my monthly spending could be done via the credit card without increasing the usage percentage of available credit. The same could be achieved if I applied for those 'easier to get' credit cards MSE advises people to use to rebuild their credit history, like the Aqua card.

For someone like me, after only 6 months of using my one credit card, is it wise to ask my bank to increase my credit limit/ apply for another card even if its something like the Aqua card? Or should I just stick with my £500 credit card for another few years and wait until I'm no longer a student and have a job and an income.

Basically I'm just thinking, since each month I'm spending £600 anyway, should I try and get more of that onto credit cards (as long as I pay everything off and am responsible and not tempted to spend more just because I've got more credit.)? Will doing this be beneficial to me? Or is there not really much benefit to be gained.

PeacefulWaters

kelloggsnutty wrote: »

Thank you everyone for the replies.

So as far as I understand it, it's definitely best to not go near the limit right? At the moment I'm only spending a little bit on my credit card each month, and paying it off straight away when the bill comes, just to show that I've been using a credit card and building a history.

Also I shouldn't be applying for other credit cards with benefits or applying for current accounts yet because I don't have a job or income yet.


My normal monthly budget for rent, bills, groceries etc has me spending £600-£700 a month. Only a very tiny bit of it goes on my credit card (and gets paid off when the bill comes), and so the majority of my spending is simply paid through my student bank account.

If my credit limit went up, more of my monthly spending could be done via the credit card without increasing the usage percentage of available credit. The same could be achieved if I applied for those 'easier to get' credit cards MSE advises people to use to rebuild their credit history, like the Aqua card.

For someone like me, after only 6 months of using my one credit card, is it wise to ask my bank to increase my credit limit/ apply for another card even if its something like the Aqua card? Or should I just stick with my £500 credit card for another few years and wait until I'm no longer a student and have a job and an income.

Basically I'm just thinking, since each month I'm spending £600 anyway, should I try and get more of that onto credit cards (as long as I pay everything off and am responsible and not tempted to spend more just because I've got more credit.)? Will doing this be beneficial to me? Or is there not really much benefit to be gained.

Unless you're earning cashback, I don't think it makes any difference.

I'd let the card company instigate credit limit increases when they're good and ready.

You're probably overthinking things. Carry on being sensible and it will all fall into place.

Voyager2002

kelloggsnutty wrote: »

Thank you everyone for the replies.

So as far as I understand it, it's definitely best to not go near the limit right? At the moment I'm only spending a little bit on my credit card each month, and paying it off straight away when the bill comes, just to show that I've been using a credit card and building a history.

Also I shouldn't be applying for other credit cards with benefits or applying for current accounts yet because I don't have a job or income yet.


My normal monthly budget for rent, bills, groceries etc has me spending £600-£700 a month. Only a very tiny bit of it goes on my credit card (and gets paid off when the bill comes), and so the majority of my spending is simply paid through my student bank account.

If my credit limit went up, more of my monthly spending could be done via the credit card without increasing the usage percentage of available credit. The same could be achieved if I applied for those 'easier to get' credit cards MSE advises people to use to rebuild their credit history, like the Aqua card.

For someone like me, after only 6 months of using my one credit card, is it wise to ask my bank to increase my credit limit/ apply for another card even if its something like the Aqua card? Or should I just stick with my £500 credit card for another few years and wait until I'm no longer a student and have a job and an income.

Basically I'm just thinking, since each month I'm spending £600 anyway, should I try and get more of that onto credit cards (as long as I pay everything off and am responsible and not tempted to spend more just because I've got more credit.)? Will doing this be beneficial to me? Or is there not really much benefit to be gained.

The benefit of putting your normal spending on to a credit card is that you then have the use of the money for about six weeks until the payment date, and can earn interest on it. Check out the TSB account, for instance. If a higher credit limit would help then you can always telephone and ask, although they are unlikely to agree until you have been using the card for six months.

Do be sure to set up a direct debit to pay your card in full each month: a late or missed payment does no good to your score and tends to be expensive.

You could apply for a cashback or benefits card once you have been using your present one for six months, although don't be surprised if they refuse. The effect of an application on your credit history is minimal, and fairly short-lived.

rehanmalik3030

You should listen to both sides of the argument. If you look back at the all the post in this thread I think they are all pro credit cards. They want you to use your credit card regularly so you can eventually get higher credit limits along the way earn cashback and improve your credit score etc etc All sounds very good on the surface.

You should view your credit card as pre approved loan, because in essence that is what it is.

Now the question is would you get a loan to buy a cup of coffee at Starbucks? No you would not yet millions of people everyday use their credit cards to buy coffee.

If you went to a bank and asked them for a loan so you can buy a cup of coffee, they would think your were crazy, but yet millions of people are doing this everyday. Why?

The reason is simple you just take out a piece of plastic from your pocket and pay for it. The next thing you know you get your credit card bill and it says over the month you have been to Starbucks 15 times and on many occassions you also purchased a muffin or a pastry or doughnut as well and you now owe £60 just for visits to Starbucks over 1 month.

I like coffee and I like doughnuts, I make a thermos flask of fresh coffee every morning and take to work. Over a month it costs me a few pound.

Credit cards are designed to make the average "Joe" spend foolishly. If you ever get a chance to visit America you will notice more and more vending machines over there accept card payments, and guess what their profits have gone up.

Sure along the way they will increase your credit limit, improve your credit score etc etc only for the sole purpose they want to tip you over the edge so that you spend more than you earn.

Now your thinking a bank would only lend money where they know they will make money on the loan i.e. interest. So how do credit card companies make money from a card holder who sticks to purchases pays his statement balance in full every month and is given rewards.

They know your average "Joe" will rarely pay the balance off in full all the time, will do cash withdrawals, will sometimes be late therefore default charges, will occasionally go over the limit again further default charges, lets not forget lets promote direct debit so if they do not have the money in the bank there will be a double whammy charges by the bank and credit card company and the list goes on and on.

The credit card companies make their money from the average "Joe" and pass the benefits to people like on this thread in terms of a credit card for which they do not have to pay a monthly or annual fee and get rewards like cash back.

Now your thinking well I am not average "Joe" I will pay back in full and not spend foolishly. This is where the ethics of using a credit card come in. You are benefitting from the mistakes and misery of your average "Joe"

Your pro credit card contributors on this thread will all try to put me down try to denigrate my view and point you towards the Starbucks loyalty card and free drinks offer. You need to question their ethics. For them "the ends" i.e. free rewards etc justify the means.

ViolaLass

rehanmalik3030 wrote: »

Now your thinking well I am not average "Joe" I will pay back in full and not spend foolishly. This is where the ethics of using a credit card come in. You are benefitting from the mistakes and misery of your average "Joe"

Using a credit card = treading on the workers? Crikey.