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CM100

Hi I got accepted for a credit card with a £250 limit which is pretty low tbh but I don't have the greatest credit so that's understandable.. what's the best way to use this card which will enable me to get credit increases? Should I pay off the balance I'm full or pay minimum payment. I've seen a lot of conflicting information on what is best

[Deleted User]

Always clear in full each month.

[Deleted User]

CM100 said:

Hi I got accepted for a credit card with a £250 limit which is pretty low tbh but I don't have the greatest credit so that's understandable.. what's the best way to use this card which will enable me to get credit increases? Should I pay off the balance I'm full or pay minimum payment. I've seen a lot of conflicting information on what is best

There is no conflicting information worth knowing. The only action you should do is spend and pay off in full every month. This demonstrates you can manage credit responsibly, so you might then get an increase after say 6 months. Some people, wrongly, claim that if you leave a balance and pay interest that makes you more attractive to the firm so they'll give you more credit to collect more interest but particularly since the responsible lending rules came in after 2018, this is completely untrue. Such people usually are unaware that the card companies earn money when you spend from merchant fees so the idea that people who pay off in full every month are unattractive customers is nonsense.

cymruchris

Just to add emphasis to the above - spend what you normally spend on groceries on the card - but not over your limit of course - and then have a direct debit set up to pay the balance in full every month. For your first payment - ensure the direct debit is fully set up - and if it's not - call them and make a manual payment.

CM100

Thanks for the replies guys I'll be paying in full every month 👍

cymruchris

CM100 said:

Thanks for the replies guys I'll be paying in full every month 👍

If you're monitoring your credit files - you may see that you get warnings around credit utilisation being high - and telling you that it should be below 25 percent. Although that's a useful tip when you have £1000's in credit - when you're starting off with a £250 limit you can ignore it - just keep paying in full each and every month (and by direct debit is so much easier) - and you'll likely find (although nothing is guaranteed) that over the course of the next 6 months you might find your limit is raised based on your continual pattern of full-payment.