Capital One - New card to repair rating, need advice on not spending on it.

robotgirl_2

Hello all.

I applied for a Capital One card with the (ulp) 34.9% APR.

My intention is to spend around £50 a month on it, probably on food or my travel card, and pay it off the next month. This will serve the dual purposes of keeping repairing my credit rating by using the card, and keeping me £50 away from my overdraft limit at the end of the month (which my bank have advised me to do so I can re-apply for a Switch card, which would again improve my credit rating a bit).

Now, I know I can keep away from the £50 OD, but I'm worried about any temptation to spend on the card. I did hear one great tip (possibly somewhere on this forum?) to put your card in a ziplock bag, then in a tupperware box full of water and then in the freezer. Unfortunately I share a freezer with my housemates so I'm not convinced that's the most security concious option! If anyone has any other hints, it would be great to hear them.

Thanks in advance ladies and gents

wyebird

Set up a direct debit to take the full balance every month and then you will know you have to pay it back if you spend it.

robotgirl_2

wyebird wrote: »

Set up a direct debit to take the full balance every month and then you will know you have to pay it back if you spend it.

That's an excellent idea, thanks wyebird!

wyebird

Thanks. Maybe, if you used it carefully as well, you could take advantage of the interest free period and cut your overdraft costs back as well

INT1

Sorry, why would you want to put your Credit card ina Freezer?
Also I don't understand about keeping £50 away from your OD limit, providing you stay within the agreed limit it will be fine.

robotgirl_2

wyebird wrote: »

Thanks. Maybe, if you used it carefully as well, you could take advantage of the interest free period and cut your overdraft costs back as well

I haven't spotted any mention of an interest free period on this particular card. I'll double check that though, just in case - you may have spotted a rather brilliant idea there. :T

robotgirl_2

aldo wrote: »

Sorry, why would you want to put your Credit card ina Freezer?
Also I don't understand about keeping £50 away from your OD limit, providing you stay within the agreed limit it will be fine.

Oh, I'm not actually doing the first tip, but it did strike me as quite an amusing way to avoid taking it out shopping with you!

As to the OD, I'm doing this because I don't currently have a switch card with my bank (handed it back in when I took out a loan with them about 4 years ago). When I spoke to the bank last week about getting one, they said I couldn't because I'm always at the very end of my overdraft a couple of days before the end of the month - this is actually because I've shut my overdraft down from £700 since the start of the year, but apparently closing my OD has made it look like I'm at the edge of my credit rather than like I've paid £400 off. :rolleyes:

The lady I spoke to said if I make sure I'm consistently about £50 away from the limit, this will look better to the bank, and they'll be more likely to issue me with a new card in 3-4 months.

I hope that explains my reasoning - please feel free to tell me if there's a flaw in this plan though, as I'm just going on the bank's word on this one :rolleyes: To be fair though, my branch staff are really lovely...

INT1

robotgirl wrote: »

Oh, I'm not actually doing the first tip, but it did strike me as quite an amusing way to avoid taking it out shopping with you!

As to the OD, I'm doing this because I don't currently have a switch card with my bank (handed it back in when I took out a loan with them about 4 years ago). When I spoke to the bank last week about getting one, they said I couldn't because I'm always at the very end of my overdraft a couple of days before the end of the month - this is actually because I've shut my overdraft down from £700 since the start of the year, but apparently closing my OD has made it look like I'm at the edge of my credit rather than like I've paid £400 off. :rolleyes:

The lady I spoke to said if I make sure I'm consistently about £50 away from the limit, this will look better to the bank, and they'll be more likely to issue me with a new card in 3-4 months.

I hope that explains my reasoning - please feel free to tell me if there's a flaw in this plan though, as I'm just going on the bank's word on this one :rolleyes: To be fair though, my branch staff are really lovely...

Wasn't aware of the £50 thing, the advisor in your bank would probably be more aware of the policies than us.
If I was running a bank, I would just like to be more concerned if you were going over the OD limit not staying within it.

robotgirl_2

aldo wrote: »

Wasn't aware of the £50 thing, the advisor in your bank would probably be more aware of the policies than us.
If I was running a bank, I would just like to be more concerned if you were going over the OD limit not staying within it.

I suspect it's just a 'my bank thinks this way, others may not' kind of thing. I'm with RBS for reference, should anyone else stumble upon this thread and find that information useful...

I agree with you, what you've said appears to be a much more sensible approach. Still, no-one ever said banks policies were decided by sensible folk, eh?

exel1966

Your method/intentions to build your rating will are all well and good, but given that you are already stretching your finances, if you don't think you can handle the temptation to overspend on a credit card then you'd be wise not to have one.

YorkshireBoy

robotgirl wrote: »

My intention is to spend around £50 a month on it...

It matters not what you spend on it, merely that you make a payment...of at least the minimum required...each month...and on time; the objective being to establish a pattern of 'o's on your credit file(s).

With that in mind, may I suggest you spend only £2-3 per month (Sunday papers at the supermarket kiosk after your weekly shop perhaps?) and set up a direct debit instruction to claim the full amount each month.

This will serve...keeping me £50 away from my overdraft limit at the end of the month...

I'm not sure I follow the logic here. Won't whatever you spend this month need to be repaid next month?