How to use a credit card efficiently?

[Deleted User]

Hey guys, I’ve recently been accepted on a credit card (I applied for one merely to boost my credit history-repayment history, and score in general).

This may be a silly question, but what is the most EFFICIENT, beneficial way to use one?

My main usage would be things like food shopping and petrol for my car (then pay IN FULL), at the end of every pay month.

Is there any other way I can use this to benefit me more so in terms of repayment history and credit score? Other than use it for small purchases (£50-150) and pay IN FULL each month?

The ms.

[Deleted User]

Use it for regular spend, clear in full once you get the statement each month.

That's all you need to do, but don't worry about what the score does. It will drop, but that's ok.

Duckyduck

Wait until the statement is produced before paying off. Simplest way is to set up a direct debit to pay in full, doing this ensures the correct amount will be taken in time to clear before the due date.

If you are planning to always pay in full then the most efficiently way to use credit cards would be to get a cash back/reward credit card so that you can get a little something extra from using the cards. If you’ve never had a credit before the Aqua cashback may be the easiest to obtain and has a decently cashback rate, if you’ve a good credit history then Amex tends to offer the most generous rewards.

[Deleted User]

So generally just use it as I would my debit card ?, secondly, is there any rule of thumb on “how much of my credit” to use? I understand 100% utilizAtion isn’t a good thing haha, my limit is £1000 (I highly doubt I’ll use anything over £300).

But does it matter if I do use more than that?

[Deleted User]

I’ve actually got a ‘Barclaycard Reward Card’ on it’s way to me in the post as we talk here.

I’ve looked into the aqua card etc and the APR% was ridiculous.

The Barclaycard was the best option, with the lowest %

[Deleted User]

[Deleted User] wrote:

So generally just use it as I would my debit card ?, secondly, is there any rule of thumb on “how much of my credit” to use? I understand 100% utilizAtion isn’t a good thing haha, my limit is £1000 (I highly doubt I’ll use anything over £300).

But does it matter if I do use more than that?

If you're clearing in full, it doesn't really matter.

[Deleted User]

That’s great, I think back in my younger days I’d of spend the £1000 by now, but now I’m more mature financially I’m struggling on what to use £10 on lol , let alone £1000

System

stay under 10% utilisation.

Terry_Towelling

Everything you'd have previously put on your debit card, put it on your credit card now. At the same time, with each transaction you make, transfer a like amount from your current account into a savings account. This takes away the temptation to spend the cash in your current account and builds up a pot to pay the credit card balance off when it is due. It also creates a bit of interest income for you (not much but every bit is good).

The increasing balance on your credit card effectively becomes a list of 'pending' transactions.

Don't worry about how much credit you utilise, just make sure you pay it back in full every month by Direct Debit. Your only headache now will be remembering to transfer the saved sum back from savings to the account that pays the direct debit.

The suggestions provided here are all made on the assumption that your current account doesn't offer a higher rate of interest than the average savings account. If you do have a high-interest current account, just leave the cash there - but remember not to spend it.

onlyfoolsandparking

beany_bot wrote: »

stay under 10% utilisation.

Staying under 30% is a more acceptable practice from a lenders point of view, I cant qualify my opinion saying that but staying under 10% on a CC may look to a lender that you really don't have much use for a credit card, that's my view on it.

zagfles

[Deleted User] wrote:

So generally just use it as I would my debit card ?, secondly, is there any rule of thumb on “how much of my credit” to use? I understand 100% utilizAtion isn’t a good thing haha, my limit is £1000 (I highly doubt I’ll use anything over £300).

But does it matter if I do use more than that?

If you pay it off in full it'll probably show you can manage credit.

Just don't make the mistake of thinking £1000 is your monthly spending limit, it isn't, it's the total credit limit.

For instance if you pay it by DD which is usually 25 days after the statement date, you'll have nearly 2 months spending outstanding on it.