Recently moved to the UK and not eligible for credit cards & want to build the score up. Help?

amapofthepiano

Deleted_User said:

That's exactly what you're supposed to do.  But you're still thinking of a standing order. 

You don't set a DD for a set amount - you set it for the full amount of the statement. The provider then takes that amount each month, no matter what it may be. Might be a pound. Might be £4k. But you'll always pay the right amount.

Oh so basically the credit card sort of charges your debit exactly how much you've spent? I never used DD either before getting to the UK (not sure we even have it in Russia!) so i'm very new to this. Thank you so much for explaining this to me, i know a 9 years old would know more about it than i do haha

MaryNB

amapofthepiano said:

Deleted_User said:

That's exactly what you're supposed to do.  But you're still thinking of a standing order. 

You don't set a DD for a set amount - you set it for the full amount of the statement. The provider then takes that amount each month, no matter what it may be. Might be a pound. Might be £4k. But you'll always pay the right amount.

Oh so basically the credit card sort of charges your debit exactly how much you've spent? I never used DD either before getting to the UK (not sure we even have it in Russia!) so i'm very new to this. Thank you so much for explaining this to me, i know a 9 years old would know more about it than i do haha

A DD is an instruction to your bank to allow a company to take what is owed from your account on set payment date (most bills are paid this way). A standing order is an instruction to your bank send a set amount to another account on a regular basis (e.g. rent to a landlord or money into your savings account). 

Whatever it says on your monthly statement, that's what your DD will take on your payment date if you set it up to take the full balance. If you spend nothing they'll take nothing, if you have £300 on your statement they'll take £300. If you set it up to take a minimum payment instead only it'll be a flat fee or a % of your statement balance (usually whichever is higher), once again the DD changes based on how much you spend on your card.

Same with, for example, a mobile phone DD. If I make an international call outside of my package I get charged extra so my DD will be higher than standard amount for my contract. I don't need to do anything to adjust on the DD.

cymruchris

The dates will vary depending on when your card is issues and the statement cycle - but it'll work something like this.

Let's say you activate your card on the 15th of a month - and off you go spending what you always spend on your debit card but now on your credit card. The money that you've usually spent on your debit card is still sitting in your current account. The credit card balance is increasing day by day as you keep spending. Then the credit card company will produce a statement once a month to show what you've spent. Let's say they do that on the 28th of the month.

You get your statement and it says you owe £500, and they say they want their payment on or before the 28th of the next month. On the 29th you put petrol in your car - it costs £50. On the 30th you go to Tescos and spend £50. Your balance is now £600. You continue to keep spending through the next couple of weeks, and as you approach the 'pay-by' date your balance is now £1000. If you have set up your direct debit to pay in full, on the 28th of that second month (or sometimes just after if it's a weekend) - your credit card company will take £500 out of your current account to pay the previous statement total balance. Your balance will now be £500. They create another statement showing that you have paid £500 by direct debit, and that your new balance for the next 'pay-by' day is again £500. If in this month  you spend nothing, then when the 'pay-by' date arrives, they'll take another £500 leaving you with a balance of £0. 

You don't need to try and send money here and there - or try to decide what to send if you set up a pay in full direct debit. It's all automatic.

There are a couple of things that can change a direct debit - such as receiving a large refund - but that's a topic for another question.

amapofthepiano

Phew okay i see, thank you very much for such thorough explanations. I think i get it, i just hope Capitol One will approve my card because i'd hate to wait for another half a year =\

Jamesyb123

amapofthepiano said:

Phew okay i see, thank you very much for such thorough explanations. I think i get it, i just hope Capitol One will approve my card because i'd hate to wait for another half a year =\

Fingers crossed for you, not sure if it’s already been mentioned but if this one isn’t successful in 6 months try using eligibility checkers as they can indicate without effecting your credit file your chances of getting a particular card

AbundantBudget

Capital One has an eligibility checker on their own web-site, even if you rejected it won't leave a negative mark on your credit report, no-one will see this soft search. And yes, you have DD in Russia, it called autopayment, it used for utility bills which also can change monthly.

Thrugelmir

Deleted_User said:

Thrugelmir said:

amapofthepiano said:

CKhalvashi said:

Also remember that if you're rejected, sending them a copy of your latest bank statement and proof of address (copy of tenancy agreement or a council tax bill) with a covering letter may cause a reconsideration, or may not. This is because you're most likely to fail on identification grounds.

As James says, if this doesn't work, a 6 month wait may be in order, but you'll get there eventually.

because my biggest asset is the savings so would be good to get a chance to sort of show them.

If you've significant savings you've no need to borrow on a credit card. Simply maintain your bank account in good order. 

That's nonsense, spending on a credit card is not borrowing unless you don't pay off in full (which OP will do thanks to savings) - it offers section 75 and chargeback cover and interest free periods AND crucially, builds a good credit rating towards getting a mortgage.

I wasn't commenting on the cover afforded. Care to show me solid evidence of your mortgage claim?  In particular how credit card use supports an application. If you were to take out a fixed term loan and repay it , without incident.  Then I would agree that credit usage adds some brownie points. Churning monthly spend through a card demonstrates nothing out of the ordinary. 

amapofthepiano

Well, my Capital One application was declined... :C
How would i approach the appeal? What are they looking for in a potential client? Steady income? Or rather steady AND significant income? My day job salary is pretty low (just about above the minimal) but a third of my income comes from music industry and i have it on my PayPal accounts. I know it doesn't look legit but i'm working on getting it out into my new Virgin card every month, just need more paperwork done.
Does it even make sense to appeal or should i simply wait for half a year and try again when they'll see 6 months of broadband/mobile operator/rent (i registered with Rate Exchange) being payed timely every month?
This is disappointing but i half expected it...

Jamesyb123

amapofthepiano said:

Well, my Capital One application was declined... :C
How would i approach the appeal? What are they looking for in a potential client? Steady income? Or rather steady AND significant income? My day job salary is pretty low (just about above the minimal) but a third of my income comes from music industry and i have it on my PayPal accounts. I know it doesn't look legit but i'm working on getting it out into my new Virgin card every month, just need more paperwork done.
Does it even make sense to appeal or should i simply wait for half a year and try again when they'll see 6 months of broadband/mobile operator/rent (i registered with Rate Exchange) being payed timely every month?
This is disappointing but i half expected it...

Its probably not worth an appeal at this stage because capital one are fairly easy to get a credit card from so it would suggest you need a bit more history. Give it 6 months and then try again. It’s probably a waste of time trying to pursue it now.

amapofthepiano

Thank you