Credit Utilization

olliehillman

Hello Guys,

This is a complicated one but I will make it as simple as possible. I wish to buy a super expensive laptop for a business startup. I am currently not a registered business and I work full time. I want to design software in my free time so that I hopefully can escape groundhog day. I could not afford this laptop as of yet but I could finance it for £270 a month and make those payments comfortably. This month is going to be a hard month for me though due to my employer being rubbish at paying me (half the reason I want to escape).

I have ordered a credit card with 0 interest for 20 months and a credit limit of £2000. I mainly got it for surviving work and building my credit rating but it has occurred to me if I put financing a laptop on it I can get the laptop now and start my escape plan a bit earlier. The thing I am worried about is Credit Utilization though. I realise that I can't have over £600 taken out on my card but will my financing the laptop effect this? The laptop is £2500.

My MMP on the card would be 1% of the balance or £25, so £25. with £270 going on there each month to give me something to pay off and get my credit rating up. I'll make the MMP on DD and then make adhoc payments to the card as and when. I know Martin always says "IN FULL!!!" but I don't think I will be clearing the whole balance honestly.

I also need to get driving in order for my wages to go up as I'm an engineer and being independent will open a lot of doors for me. So I wouldn't mind putting that on my card too.

Also if i created a business and charged the laptop to the company with a value of £0, would I get it back in my rebate considering the company probably won't bring in revenue in the first year? This is more of a project and it may not work out, I am not deluded but I hope that I can "change my stars" to quote A Knights Tale.

any advice will be greatly appreciated and i'm sorry if this is slightly off topic mr forum moderaters please move it if you see fit.

[Deleted User]

Ignore the credit utilisation myth the CRA's spurt out.

Do you NEED a £2500 laptop? Seems a bit excessive.

How will you pay for the laptop on a £2000 credit limit card when the laptop cost £500 more?

Or do you mean making the monthly payments from the card?
They are likely to be treated as a cash transaction rather than a purchase, thus incurring daily interest and cash advance charges.

[Deleted User]

It's ok to make min payments when you're on a 0% promo. But don't put interest bearing transactions on the same card, or you'll be charged interest on them unless you clear the entire balance.

I'm not sure what you mean by 'putting £270 on the card to give you something to pay off'.

olliehillman

!!! wrote: »

Ignore the credit utilisation myth the CRA's spurt out.

Do you NEED a £2500 laptop? Seems a bit excessive.

How will you pay for the laptop on a £2000 credit limit card when the laptop cost £500 more?

Or do you mean making the monthly payments from the card?
They are likely to be treated as a cash transaction rather than a purchase, thus incurring daily interest and cash advance charges.

Thanks for debunking that for me. yes I did mean monthly payments from the card. I wasn't sure if that would be allowed.

Deleted_User wrote: »

It's ok to make min payments when you're on a 0% promo. But don't put interest bearing transactions on the same card, or you'll be charged interest on them unless you clear the entire balance.

I'm not sure what you mean by 'putting £270 on the card to give you something to pay off'.

okay thank you. I'm not sure either sorry for being unclear it made sense at the time. It was a bit of a stupid statement now I read it back

olliehillman

I would just like to know about creating a business now so I will make another thread in the relevant forum. Please if anyone could also verify that credit utilization is a myth that would be helpful.

System

olliehillman wrote: »

I would just like to know about creating a business now so I will make another thread in the relevant forum. Please if anyone could also verify that credit utilization is a myth that would be helpful.

It's not a myth. The lower your credit utilisation the better. Lenders do look at credit utilisation as a factor in lending. a high utilisation will look like you a desperate for more credit.

[Deleted User]

olliehillman wrote: »

Please if anyone could also verify that credit utilization is a myth that would be helpful.

As I said above...

If you're paying the balance back in full each month or you're on a promo it has little to no effect

olliehillman

beany_bot wrote: »

It's not a myth. The lower your credit utilisation the better. Lenders do look at credit utilisation as a factor in lending. a high utilisation will look like you a desperate for more credit.

!!! wrote: »

As I said above...

If you're paying the balance back in full each month or you're on a promo it has little to no effect

The card is with virgin money:

Purchase
0% for 20 months

Balance Transfers
0% for 23 months, then 21.9% p.a.(variable), 2.9% fee

Representative example
21.9% p.a. (variable) on purchase
21.9% APR variable
£1200 assumed credit limit


I also did say I think it's unlikely that I will be clearing the full balance all the time.

[Deleted User]

Have you actually got the card and been accepted?

You need to confirm you’ve been accepted for the advertised interest free periods.

olliehillman

!!! wrote: »

Have you actually got the card and been accepted?

You need to confirm you’ve been accepted for the advertised interest free periods.

I haven't got the card yet its in the post but yeah I was accepted and got a confirmation email

[Deleted User]

Just check the terms when you get it