Student considering a credit card due to financial hardship (please read properly)

chazley

Ok so heres the jiffy. I'm 20 and in my first undergraduate year at Liverpool. For the past 2 years I have been working and studying at college which I had to pay for myself as my tuition wasn't covered in my second year by the government due to my age. It cost me around £3000+ which I paid for by working part time and using a £1,500 overdraft I had on my natwest current account. Needless to say, I was constantly in the minus due to how expensive travel costs and books were.

Anyways, to the point. For some ungodly reason, I decided to give my £1,500 current account overdraft back to the bank in hopes I could just request it to be moved to my Natwest student account, but after going into a branch and ringing up I was told that they wouldn't be able to increase my student overdraft nor even give me back any current overdraft whatsoever because my credit score is quite low (748). I am absolutely skint right now and had to apply for the hardship fund at my university because I'm seriously struggling to eat and pay for books, wash clothes etc. University for me is extremely expensive and due to the intensity of my course I really don't think I could get a part time job. (Pharmacology is one !!!!! of a degree )

I need to rebuild my credit score. I know for a fact when my bursary, loan, hardship fund comes in (I am on the maximum student loan (£8,790/yr) and bursary (£2,000/yr)) etc I will be able to manage money and pay each month off no bother, probably by just spending around £100 a month on the card and then clearing it. I'm just worried however that these 'credit building' cards are very shady in how they operate business and love to throw random charges all over the place.

So, my question is:
Am I making a risky move by doing this? Will they try and screw me over in terms of fees, payments etc?

Should I do it? Are their alternate solutions for my problem?

How do credit cards like this actually function? Will it be linked to my NatWest current account and each month the balance I've used on the credit card will just be billed from the current account?

Sorry for the long post and thanks for reading. I'd really appreciate some serious, detailed answers to this rather than just a 'yes' or 'no'. Thank you guys! :T

[Deleted User]

There's no 'screwing over' of fees or interest. You'll pay interest if you don't clear in full each month and fees if you withdraw cash, miss payments or go over limit.

All credit cards build history the same way. But your options will be limited to the sub prime in all likelihood. They are no more shady than any one else and there are no random charges.

Ignore your credit score. You're not looking to change that. You're looking to build history.

Only get a card if you can clear in full from day one. Anything else will put you in a world of self inflicted pain.

Credit is not a substitute for not having enough money.

PeacefulWaters

To be honest, I've read your post clearly and it seems a bit meandering.

You say you are skint and see a credit card as a solution.

The cost free way to use a credit card (if you can get one) is to repay the whole balance in full every month. You imply that this is your intention.

But it seems unlikely that you can afford to do this. In which case you will have card debt building up month after month accruing interest at what will probably be a high rate. If this is the likely outcome then your idea of getting a credit card is not particularly clever.

Credit cards are rarely a solution for financial difficulties.

chazley

PeacefulWaters wrote: »

To be honest, I've read your post clearly and it seems a bit meandering.

You say you are skint and see a credit card as a solution.

The cost free way to use a credit card (if you can get one) is to repay the whole balance in full every month. You imply that this is your intention.

But it seems unlikely that you can afford to do this. In which case you will have card debt building up month after month accruing interest at what will probably be a high rate. If this is the likely outcome then your idea of getting a credit card is not particularly clever.

Credit cards are rarely a solution for financial difficulties.

I am completely skint until my hardship fund, bursary and loan come in (December for bursary which is £500, January for loan, £2,790) which is why I'm confident I would be able to pay in full each time. I do not want to live frugally throughout all my studies and want a proper student experience, which I'm sure I'll have but right now I'm seriously struggling and I don't think they are going to give me anything in regards to overdrafts if I don't improve my score.

I'm just worried, okay? I'm not to sure what I can do in this scenario.

[Deleted User]

chazley wrote: »

I don't think they are going to give me anything in regards to overdrafts if I don't improve my score.

Again. Trying to change your score is like trying to change the colour of unicorn poo. No one sees it and no one cares.

Your aim is good credit management. No getting a high made up number.

chazley

PeacefulWaters wrote: »

To be honest, I've read your post clearly and it seems a bit meandering.

You say you are skint and see a credit card as a solution.

The cost free way to use a credit card (if you can get one) is to repay the whole balance in full every month. You imply that this is your intention.

But it seems unlikely that you can afford to do this. In which case you will have card debt building up month after month accruing interest at what will probably be a high rate. If this is the likely outcome then your idea of getting a credit card is not particularly clever.

Credit cards are rarely a solution for financial difficulties.

I do have good credit management. I was doing absolutely fine before my bank removed my overdraft because they explicitly said my credit score was too low. Have you even read my post? How can I manage money well right now when I have no money to manage?

chazley

Deleted_User wrote: »

Again. Trying to change your score is like trying to change the colour of unicorn poo. No one sees it and no one cares.

Your aim is good credit management. No getting a high made up number.

I do have good credit management. I was doing absolutely fine before my bank removed my overdraft because they explicitly said my credit score was too low. Have you even read my post? How can I manage money well right now when I have no money to manage?

[Deleted User]

The bank means your score with them. That is not the score the CRAs show you.

Good credit management means clearing your card in full, not carrying debt, being on the ER, not living in your overdraft and so on.

I repeat. Credit does not replace a lack of funds.

chazley

Deleted_User wrote: »

The bank means your score with them. That is not the score the CRAs show you.

Good credit management means clearing your card in full, not carrying debt, being on the ER, not living in your overdraft and so on.

I repeat. Credit does not replace a lack of funds.

I also have a bank with Santander but I have never, ever used it. Are you saying I could apply for an overdraft via them and have a chance of being accepted? Also, please elaborate on that because the man on the phone told me that my credit score was the reason and I should sign up to a site to check it and improve it before applying again (he pretty much hinted experian), which is why I'm here now. So, if he just misinforming me or are you? Because from what I've read on this site and others, banks, building societies blad blah all use credit scoring agencies to determine whether or not they would lend money. FYI, I have been with Natwest for 10 years.

[Deleted User]

Please start reading the posts more carefully.

All lenders use the CRAs. But they use the DATA on your files. Never the scores which are fictions and have no bearing on your credit worthiness.

You can achieve a 999 score through bankruptcy. You'll also have had a high score the day you turned 18. Neither make you a good credit risk.

chazley

Deleted_User wrote: »

The bank means your score with them. That is not the score the CRAs show you.

Good credit management means clearing your card in full, not carrying debt, being on the ER, not living in your overdraft and so on.

I repeat. Credit does not replace a lack of funds.

Deleted_User wrote: »

Please start reading the posts more carefully.

All lenders use the CRAs. But they use the DATA on your files. Never the scores which are fictions and have no bearing on your credit worthiness.

You can achieve a 999 score through bankruptcy. You'll also have had a high score the day you turned 18. Neither make you a good credit risk.

So what advice would you give me in helping my situation? Obviously, you see the credit card as a big no-no, so what would you think is my best option?