First credit card bill in UK

fanix

Hi everyone,

This is my first post on this forum. I moved to the UK about 4 months ago. I'm originally from Australia. A month ago I got approved for the Aqua Reward credit card, with a starting limit of £300. My first statement arrived today and the minimum payment required is only £5. The main purpose of getting this credit card was to establish a credit history in the UK. Whats the best way to use and pay this credit card to build up a positive credit rating.

Some websites suggest only paying the minimum payment due, as paying off the entire credit card each month could negatively impact you as it shows you dont really need the card. Some say its good to pay the full balance. I feel like this is all games and traps.

So whats the deal with this in the UK. Can I pay off the entire balance owing each month without this negatively impacting me?

Thanks

Stuart107

No one (apart from the lenders themselves) can say for sure what will affect how a lender sees you but I would strongly recommend paying off in full each month - but only after the statement has been produced and before the due date.

A credit history shows an ability to manage credit (or not manage, as the case may be). So a history of staying within limits, paying it back reliably, is a good result from an initial card.

Conversely, failing to pay back in full on what is a small limit may lead to the conclusion that you're already struggling!

fanix

Thank you!

Another thing I read was that its a bad idea to spend more than 70% of your limit as this might suggest that you are struggling.

Man, seems like you cant win with these stupid things, even if you earn £10,000 a month

[Deleted User]

If you're clearing in full (which you should), your % spend isn't so important, especially on a low limit card.

It's easy to win with the stupid things, as long as you know the rules of the game.

grumbler

You don't have to pay (interest in this case) for building your credit history.
Don't over-think it. Never exceed your credit limit and always pay your statement balance in full and on time. A Direct Debit for a full payment makes it very simple.

Ben8282

With a low limit card doing anything other than repaying the full balance each month would imply that you were unable to afford to pay the (at most) £300 which, taken together with Aqua's high interest rates, would not be beneficial.

fanix

Thanks for all the feedback and help. Much appreciated.

boo_star

Pay it in full.

I took out an Aqua card last year and over the course of a year have seen the credit limit increase from £250 to £3750. My most recent letter has seen them lop around 4% off the interest rate too. This was a "Classic" card rather than the "Advance" one.

Always paid in full.