Absolute newbie on credit cards

Fabrice

Hello all,

Forgive me for starting a new thread, but i'm completely lost amongst all the info on this site. Call me thick or something, but most of it seems conflicting and confusing to me. I am an absolute newbie to credit cards.

I have read the articles that i think are relevant to me:
Credit card newbie, Cashback cards, Best cards for abroad.

I have never had a credit card in my life and never (EVER) had any debt; i only have a debit card with Lloyds TSB and savings with ING.

I applied to Capital One Cashback recently but was refused due to low credit; surely because of lack of.
I want to get on the credit card bandwagon for the "Protections" reason.
I want to avoid completely interest charges and i am not interested about balance transfers, changing cards every 6 months, etc... I will be able to pay the card in full each month with no problem.

Upon reading the "Golden Rule" paragraph and checking features on various credit cards websites, i am confused already.
Could someone clarify to me in a basic way the followings:
- Interest free period of xx days on purchases (as seen HERE): does that mean that after that said period, purchases have an interest charge? Even if balance is paid in full each month?
- introductory rates 0% on purchases for first xx months: same here, what does that mean?
I'm completely confused

Anyway, considering my situation and the risk of being refused affecting my credit history, which card(s) should i apply for?

Many thanks

gt94sss2

Capital One are likely to have refused you for their cashback card due to you not having an existing credit card.

As this will be your first credit card I would approach your bank and ask them for a credit card. After you have been using it for a while, you will find it easier to apply for other credit cards which offer cashback if you then wanted.

Could someone clarify to me in a basic way the followings:
- Interest free period of xx days on purchases (as seen HERE): does that mean that after that said period, purchases have an interest charge? Even if balance is paid in full each month?
- introductory rates 0% on purchases for first xx months: same here, what does that mean?

The interest free period quoted is just the maximum period between one statement date and the 'payment due date' that appears on your next statement. If you pay your bill off each month, you will have no interest to pay..

introductory rates 0% on purchases for first xx months - means that for first xx months as long as you make the minimum payment (as opposed to paying the full amount) they won't charge you any interest.

Regards
Sunil

Fabrice

Sunil, that's great info, thank you very much. I don't understand f_ all about minimum payments, statements and all that malarky since i've never had any credit card.

Apart from my bank, you don't think there is one i can apply for now?

Zebedee69

Hello,

As your with LTSB allready why not look here for a card?...

http://www.lloydstsb.com/credit_cards.asp?link=top_navigation

If you are an internet banking user you can apply direct through your internet banking area. Normally they will confirm your rate and limit before you even apply.

I would go for the Airmiles Card's if you dont have any debt and dont plan on getting into any...... Its a great way to obtain something back, not as good as cashback but almost.......

The reason you would have been declined is:

Savings accounts dont get reported to Experian or Equifax so no one but you know you have this.

Your only "open" account is your current one and as you dont have any overdraft facility or mortgage etc etc you dont have any history relevant to your use of credit. All you have is the fact you "exist" as a person and that you have an open current account. Basically your a white canvas, lots of people would kill to be in your position again ha ha!

This problem is almost as bad as being a BR or having a CCJ registered against you. Banks wont give you a chance yet you do have to start somewhere.

Thankfully as a Lloyds TSB account holder they will use their own internal score to see if you can have a card.

Good Luck!

Zeb,

dudleyboy

Hi,

For someone who is completely new to credit cards I suggest you apply for this card:
http://www.barclaycard.co.uk/personal-home/cards/initial/index.html

The APR is extortionate but considering you pay it off in full each month by the due date on your statement you will NOT be charged any interest and it will be a good way of building up a credit profile.

I know many people pride themselves on never having owned a credit card but, as you've experienced, not having a credit record does make it difficult to gain credit in the future and therefore you're unable to take advantage of 0% deals and cash back.

I'd say apply for this card, use it for a good period of time, say 6 months or so, and build up a credit record for yourself. Then apply for a card with a good cash back percentage, such as the Egg Money card. Once you've got a credit profile the banks will be falling over themselves to offer you their cards. The thing to do then is to pick the best one that suits you. As you intend to clear it every month, the best cashback card is for you - this way the company will give you money for spending on the card even though you clear the balance in full each month and pay absolutely no interest whatsoever. In effect, you'll make money from buying the very things you would've bought anyway.

Trust me, it'll make more sense once you have a card and start playing the game.

gt94sss2

Fabrice wrote: »

Sunil, that's great info, thank you very much. I don't understand f_ all about minimum payments, statements and all that malarky since i've never had any credit card.

A minimum payment is usually between 2-5% of the balance (depending on your card) of your outstanding balance each month and is the minimum payment the credit card will want each month.

However, unless you are on a 0% deal, if you don't pay off your credit card each month you will be charged interest - therefore it is a good idea to pay it off each month.

Setting up a direct debit to automatically pay your credit card in full is a good idea.

Also, unlike a debit card - its not a good idea to take money out of ATM machines with a credit card.. as there is no interest free period on those transactions.

Apart from my bank, you don't think there is one i can apply for now?

There will be other credit cards you can apply for - however, due to your lack of a recorded credit history, you are better off applying to Lloyds TSB who you already bank with as they will give you a 'better' card than those other companies - where the cards will be mainly for people with 'poor credit' or who have had problems in the past, rather than your own situation.

Regards
Sunil