Larger than normal purchase on 0% spending credit card to build credit score?

Thevisualtailor

I had a search and couldn’t seem to find a definitive answer to this on MSE (sorry if I have missed an existing thread)

I’m a recent graduate with an average disposable income/credit rating. I have never owned a credit card and have been saving for several months towards a trip to America for which I have the full amount stashed away ready to book. I was wondering the following:

Will applying for an Aqua credit card (with a 95% chance of acceptance based on my current credit score) with 0% spending for the first four months be a good opportunity to build my credit rating if I purchase the flights/hotel using this card, then set up a direct debit to repay the full amount over 4 instalments from my savings account where the money is already?

Thanks in advance for your help!
Jamie

[Deleted User]

Using a card, and clearing in full or within the promo period, demonstrates good credit behaviour.,

You don't have a credit score or rating beyond what lenders decide, so ignore any numbers the CRAs give you.

[Deleted User]

Depends if you get a limit high enough to cover the holiday cost.

How much is the holiday?

Then continue to put your normal monthly spends on the card and pay it off in full each month to build a credit history.

Ignore any ratings or scores you may see or read about.

Krisko

As mentioned above Aqua may give you quite a small limit to start with, possibly as little as £100.

Have you tried the eligibility checker of the bank you're currently with? They could be willing to give you a higher limit based on additional factors Aqua doesn't have access to,. e.g. history with the bank, knowing your income, savings...

If that's not an option certainly get the Aqua card to start building your credit history. I wouldn't worry about the 0% interest period and pay the card off inn full every month, as you have the money anyway. It will demonstrate ability and willingness to pay off your debts. Paying in instalments will demonstrate willingness, but some may doubt your ability to handle a larger amount of debt.

Ben8282

I would say yes to paying for the flights and holiday by credit card both for the s75 protection and because it is what post people would probably do.
However, be aware that Aqua credit limits tend to be rather low and therefore there is a good chance that your credit limit will not be high enough to pay for the holiday.
Assuming that you do get a card with a high enough credit limit, setting up a direct debit to repay a fixed amount of 25% of the total spend so as to repay in 4 equal monthly instalments is not a good idea and will result in you being charged interest.
The 0% offer on purchases will be for 4 months from date of account opening. I don't know how long after the account is opened until Aqua produce the first statement, but if it was 1 month later the first direct debit would not be taken until almost 2 months after account opening and the end of the 0% offer would occur shortly after the 3rd direct debit was taken leaving 25% of the amount to appear on the next statement subject to interest. The end of the purchases offer may not correspond to either the statement or payment due dates.
I would suggest that with such a short purchases offer you simply ignore it. Repaying in full when you receive the first statement will create the best impression. Doing otherwise will just look as if you are getting into debt on your first and only credit card, which of course Aqua would love you to do so that they can start charging you extortionate interest.
To improve your overall ability to obtain credit on better terms, keep using the card for purchases and repay in full each month. Ignore meaningless scores.


When you did the eligibility check you say you got 95% likelihood of acceptance for the Aqua card. Were there any better cards that you got a good acceptance % for? Have you tried your own bank to see if you can get a mainstream credit card from them which may well come with a better credit limit?