Rebuilding credit worthiness - time to apply for second Credit Card...?

Some_Guy

Hello all. I am rebuilding my credit worthiness - four years ago I made full and final settlements for two credit cards, having got myself in a right mess. I'm not going back there!

A bit over a year ago I dared to apply for a mobile phone contract with Vodafone (who I understand can be a bit stricter), and was successful. I then applied for an Aqua credit card, again with success.

I pay off the Aqua card in full each month... well apart from one month where I left a minimal balance on the card (less than £10), as I naively thought that I'd only pay interest on that small amount, my thinking being that running a minimal balance and paying minimal interest would benefit my credit worthiness. In fact they wanted interest to be paid on the whole statement balance (almost all of which I'd paid off) ... lesson learnt, read the card T&Cs carefully!

Aqua have offered increased credit limits several times, which I've accepted each time, though I haven't been offered an increase recently. They also upped my interest rate about 9 months in, which doesn't affect me as I pay off my balance in full each month.

So all's good... but I am a bit wary of only having the one credit card - not least because I just wonder if they might drop my credit limit, as I don't imagine I'm considered a particularly profitable customer, as perhaps indicated by the interest rate increase (I do put spending through the credit card each month though). Also the Aqua card I hold is the cashback card, which has now been withdrawn for new customers, and they might want to nudge people off of it. Plus there's the reassurance / backup of having another card.

Hence I'm thinking of applying for a second credit card. I don't earn a spectacular amount however, and I can imagine it's possible that having a second card and hence more overall credit might result in Aqua decreasing their limit.

I'm probably overthinking things... but I'd prefer to cultivate my improving credit worthiness rather than sabotage it!

[Deleted User]

Having at least two or three cards is wise, as long as you don't have a spending problem.

It protects you against closures, or simply finding your card declined when you desperately need petrol in some god forsaken wilderness, miles from civilisation, such as Croydon, for example.

Some_Guy

Deleted_User said:

Having at least two or three cards is wise, as long as you don't have a spending problem.

It protects you against closures, or simply finding your card declined when you desperately need petrol in some god forsaken wilderness, miles from civilisation, such as Croydon, for example.

I got myself in a pickle before and am not going there again! So I'm keeping everything very much under control nowadays.

I was thinking that I should try and apply for another one of the sub-prime / credit-rebuilding cards mentioned here - is that a good idea?

(Capital One was one of the previous cards I got into trouble with, so I'm guessing I might not be welcome with them... though as their name still gives me some bad vibes I'm not entirely sure I'd want to either!)

born_again

If you are looking at another card.
Why not try a eligibility checker at one on the normal card providers now. Rather than the sub prime.

Then when you get a new one cut up the Aqua card.

cymruchris

Try Vanquis - they're usually a safe bet for someone around your credit profile (Use their eligibility checker on their website - don't use comparison sites). If it comes back with 100% then give it a go (they can still say no - but it's rare if it comes up as pre-approved). 

Then set up a direct debit to pay in full, and spread your regular spending over both cards. Don't close the Aqua one though - keep both open and maintain them well, to get yourself on the way to obtaining something more mainstream in the near future. 

maxximus75

I would certianly not apply to any lenders your have had previous troubles as they do tend to have long memories.

Remember about groups of cards that belong to a particular lender.

If say, you had trouble with Newday.  I would avoid all of the cards such as Marbles, Aqua, Opus, Fluid along with the multitude of co-branded cards such as Amazon, Argos (credit card), Debenhams, AO (the list goes on).

Again, if it was the likes of say Halifax, then I would avoid any of the Lloyds banking group.

As you alrady havea Aqua, try and look for another lender for your new card.

As mentioined, using eleigibility checkers can help and won't have any impact on your credit unless you decdie to apply where a hard credit search will be performed.  I would suggest that you try the eligibility checkers available directly on the credit providers website as they tend to be more "accurate" rather than a comparison site.

[Deleted User]

born_again said:

If you are looking at another card.
Why not try a eligibility checker at one on the normal card providers now. Rather than the sub prime.

Then when you get a new one cut up the Aqua card.

Cutting up the card isn't necessarily a good idea, lenders don't see the brand of card you have or judge you on whether you have a prime or sub prime card (indeed, someone with a sub prime who is rebuilding credit might look better than someone with a (genuine) gold card for high earners who doesn't pay in full every month) - someone with good credit might have an Aqua for cashback as an example. The card might be closed or balance cut down to useless levels whereas spending a small amount every month and paying in full will be better on the credit record as OP will have more credit but lower utilisation if they get a second card

Some_Guy

cymruchris said:

Try Vanquis - they're usually a safe bet for someone around your credit profile (Use their eligibility checker on their website - don't use comparison sites). If it comes back with 100% then give it a go (they can still say no - but it's rare if it comes up as pre-approved). 

Then set up a direct debit to pay in full, and spread your regular spending over both cards. Don't close the Aqua one though - keep both open and maintain them well, to get yourself on the way to obtaining something more mainstream in the near future. 

Thanks. I was vaguely tempted by what @born_again said above about going for one of the mainstream cards, but maybe it's too soon. Interesting that Vanquis doesn't get a mention on the MSE page of 'Credit Cards For Bad Credit', they certainly used to feature there.

I currently have a credit account with Very.co.uk, only used it once and paid it back immediately (for some Black Friday 2019 special offer) - as I don't use it, they are closing it down in a week or so. Perhaps it might be best to wait for this account to close and be reported as such to the CRAs before applying for a new credit card?

Also, in terms of Direct Debits... currently I don't actually have one set up for the Aqua card, I just pay in full (by debit card) on the evening of the day the statement is generated. Two queries...

1. Do credit card providers consider a customer more credit worthy if they set up a direct debit? (e.g. are you more likely to get a credit limit increase if a DD is setup?)
2. Is there a downside to paying quite as promptly as I do?
   

jbrassy

If your credit history has improved in recent years and you pay your statements off in full every month, why not try the eligibility checkers for some cashback cards? American Express Platinum cashback and Barclaycard Rewards are the best ones available at the moment. 

If it's unlikely you'll be accepted for one of these, there's no harm in sticking to one credit card. If Aqua do drop your credit limit in the future, try the same eligibility checkers again and consider applying for another subprime card.

[Deleted User]

Some_Guy said:

cymruchris said:

Try Vanquis - they're usually a safe bet for someone around your credit profile (Use their eligibility checker on their website - don't use comparison sites). If it comes back with 100% then give it a go (they can still say no - but it's rare if it comes up as pre-approved). 

Then set up a direct debit to pay in full, and spread your regular spending over both cards. Don't close the Aqua one though - keep both open and maintain them well, to get yourself on the way to obtaining something more mainstream in the near future. 

1. Do credit card providers consider a customer more credit worthy if they set up a direct debit? (e.g. are you more likely to get a credit limit increase if a DD is setup?)
2. Is there a downside to paying quite as promptly as I do?
   

1. Customers with DDs set up tend to be lower risk than those without. That's been true of every portfolio I've looked at.
2. No, as long as you're waiting for the statement.
 

Some_Guy

maxximus75 said:

I would certianly not apply to any lenders your have had previous troubles as they do tend to have long memories.

Remember about groups of cards that belong to a particular lender.

If say, you had trouble with Newday.  I would avoid all of the cards such as Marbles, Aqua, Opus, Fluid along with the multitude of co-branded cards such as Amazon, Argos (credit card), Debenhams, AO (the list goes on).

[...]

Thanks. I see that NewDay is behind several of the cards, and Capital One behind several others (e.g. Post Office, Ocean). Shame re the Post Office credit cards as I had thought it was a nice, neutral brand without potential negative connotations, but I'd better avoid given it's Capital One!

Might give Zopa a go.