JD Williams Credit limit

[Deleted User]

almanak said:

Ebe_Scrooge said:

 :

"How it works

If you’ve been accepted for a personal credit account, no interest will be charged if you pay for your items in full by the date show on your latest statement and by keeping your account up to date.

If you choose not to pay the full amount by the date shown on your latest statement and pay the minimum payment, you’ll be charged interest on your total remaining balance.

If you choose to pay just the minimum payment each month, this will cost you more in interest and take you long to pay off than if you paid for your items in full"

So it works just like any standard credit card/credit account.  If you don't pay the full balance each month, you'll be paying interest (and at a much higher rate than a typical credit card).

Yes, it will be reported on your credit file - so, as far as it goes, it's an OK thing in terms of building up a good credit history.  However, it's a hideously (and needlessly) expensive way of doing it.  If you want to make use of their credit facility because you shop there anyway, then fine - but pay the balance in full every month to avoid interest.  This will still show on your credit history (and actually will do more good than carrying a balance from month to month).

If your primary aim is to build up a good credit history, the simplest way is to get a credit card, use it for everyday purchases (food, petrol, whatever), and always pay it in full every month when the statement arrives.  If you're only able to get a sub-prime card then no problem - their interest rates are higher than the mainstream cards, but it doesn't matter.  As long as you pay in full every month, you won't be charged interest.  After a year or so of doing this, you'll have built up a history of responsible borrowing and repayment - which is one of the major factors that will influence your ability to get future credit (and at a better APR) from other lenders.

I guess this example from their pre-contract credit information mislead me:

The total amount you will have to pay.

'As an example, the total amount that you would have to repay would be £191.77. We base this example on a credit limit of £150

and the following assumptions:

· You immediately order items up to the value of your credit limit

· You repay us in 12 equal monthly payments including the interest due

· The standard interest rate on your account does not change

· The agreement remains in place for the whole 12 months

· Both of us fulfil the obligations of this agreement'

You mentioned it is  'hideously expensive way' , I guess you refer to products price there? I was considering only electronics which I plan to buy anyway and having a one purchase a year even will work here I suppose? I will start from small to get higher limit of course. For this reason I do consider very catalogue as initially I've received couple of times higher limit offer (didnt do the proper credit check yet) and the range of products is more interesting.

For standard credit cards it is a CATCH 22 for me. No credit history no card. I only managed to have a mobile plan now and was pretty shocked once rejected it before with very good credit score and salary. For subprime cards it might be the same I think and I do not want to have failed try on my file.

It's hideously expensive as you're paying £191.77 for goods to the value of £150 i.e. £41.77 more. It's like you and I going to the supermarket and spending £100 each but I pay £100 immediately up front and you pay over 3 months and pay £125 for the same goods

almanak

Ebe_Scrooge said:

almanak said:

In your example paying £6 a month would be ok for not paying interests? I asked at the beginning what amount  to pay is the best so how much percentage more? Twice a minimum pay? So £10 for example or it doesn't really matter for the sake of having good credit history?

No.  You pay the FULL outstanding balance.  Anything less and you'll pay interest.  And you'll be paying interest at a very high rate - 59.9% you said earlier.

Using the example you quoted : "As an example, the total amount that you would have to repay would be £191.77. We base this example on a credit limit of £150"

So, you buy an item for £150, pay for it in 12 instalments, you've paid £191.77 for that item.

The only way to avoid paying interest is to pay each month's statement in full.

and this is what I wanted to know from the beginning, if the purchase is for £20, only repaying £20 at once at the beginning so as like normal purchase will prevent from paying interests. And this is what I wanted to know. If I use my credit limit this way will it build my credit history? If I pay £20 instead of their instalments after receiving their statement?

[Deleted User]

almanak said:

Ebe_Scrooge said:

almanak said:

In your example paying £6 a month would be ok for not paying interests? I asked at the beginning what amount  to pay is the best so how much percentage more? Twice a minimum pay? So £10 for example or it doesn't really matter for the sake of having good credit history?

No.  You pay the FULL outstanding balance.  Anything less and you'll pay interest.  And you'll be paying interest at a very high rate - 59.9% you said earlier.

Using the example you quoted : "As an example, the total amount that you would have to repay would be £191.77. We base this example on a credit limit of £150"

So, you buy an item for £150, pay for it in 12 instalments, you've paid £191.77 for that item.

The only way to avoid paying interest is to pay each month's statement in full.

and this is what I wanted to know from the beginning, if the purchase is for £20, only repaying £20 at once at the beginning so as like normal purchase will prevent from paying interests. And this is what I wanted to know. If I use my credit limit this way will it build my credit history? If I pay £20 instead of their instalments after receiving their statement?

Yes you will build a positive credit history by borrowing and paying off in full every month. I'd also suggest getting a credit builder card, something like cap one, vanquis etc are designed for those with poor/no credit history though may be worth asking your bank too as they at least see your earnings

almanak

Deleted_User said:

and this is what I wanted to know from the beginning, if the purchase is for £20, only repaying £20 at once at the beginning so as like normal purchase will prevent from paying interests. And this is what I wanted to know. If I use my credit limit this way will it build my credit history? If I pay £20 instead of their instalments after receiving their statement?

Yes you will build a positive credit history by borrowing and paying off in full every month. I'd also suggest getting a credit builder card, something like cap one, vanquis etc are designed for those with poor/no credit history though may be worth asking your bank too as they at least see your earnings

ok. and how about if I don't buy each month but for example 3-4 times a year?

[Deleted User]

As long as it's paid off in full that is fine but in that situation a credit card might be better as you can use it for all your daily spend like food, fuel etc and keep paying it off

Ebe_Scrooge

almanak said:

Deleted_User said:

and this is what I wanted to know from the beginning, if the purchase is for £20, only repaying £20 at once at the beginning so as like normal purchase will prevent from paying interests. And this is what I wanted to know. If I use my credit limit this way will it build my credit history? If I pay £20 instead of their instalments after receiving their statement?

Yes you will build a positive credit history by borrowing and paying off in full every month. I'd also suggest getting a credit builder card, something like cap one, vanquis etc are designed for those with poor/no credit history though may be worth asking your bank too as they at least see your earnings

ok. and how about if I don't buy each month but for example 3-4 times a year?

Yes, this still works.  The key thing is to ALWAYS pay each statement IN FULL every time it arrives.  This means no interest and a positive mark on your credit history.  Set up a Direct Debit for the full amount, then you won't forget.  Obviously, you need to be a little bit disciplined, and only buy things on the card that you know you are going to be able to pay off when the statement arrives.

Credit cards are a very useful tool - they only become a problem when people think "Oh, I've got a £5000 limit, I'm going on a shopping spree" ... then when they receive the bill that month, they have no way of paying it.

almanak

Deleted_User said:

As long as it's paid off in full that is fine but in that situation a credit card might be better as you can use it for all your daily spend like food, fuel etc and keep paying it off

if I could have it I would get it!

[Deleted User]

Have you actually applied for a sub prime credit card?  They're designed for people with a lack of history.

You say you don't want a 'failed try' on your files, but there's no such thing.  It's just a search.

almanak

Ebe_Scrooge said:

y though may be worth asking your bank too as they at least see your earnings

ok. and how about if I don't buy each month but for example 3-4 times a year?

Yes, this still works.  The key thing is to ALWAYS pay each statement IN FULL every time it arrives.  This means no interest and a positive mark on your credit history.  Set up a Direct Debit for the full amount, then you won't forget.  Obviously, you need to be a little bit disciplined, and only buy things on the card that you know you are going to be able to pay off when the statement arrives.

Credit cards are a very useful tool - they only become a problem when people think "Oh, I've got a £5000 limit, I'm going on a shopping spree" ... then when they receive the bill that month, they have no way of paying it.

is the combination of both paying in full but also for next purchases when I have bigger limit paying more than the minimum one (I a aware it will include interests)ok.? Also as I got better offer with much lower APR and much higher limit is closing it a good idea or it is just better to not use it but still have it.? There is a withdrawal period from the credit agreement  for 2 weeks. Would that leave a mark on my file? 

Ebe_Scrooge

almanak said:

if I could have it I would get it!

Try having a look at the eligibility checker on this site https://www.moneysavingexpert.com/eligibility/credit-cards/search/   , select the card type as Credit Builder.  This tool is by no means foolproof, but it will give you a reasonable idea of which card you may be accepted for.  And if you've not made any other applications for credit in recent weeks, then 1 application will not adversely affect your credit history.