Balance transfer or spending card

Kachaka

Hello, last year I applied for Bounce back loan. After 2 months I will start repaying the loan with 2.5% interest.

Could I apply for a credit card without fees and interest to repay my loan fully and purchase a used car as well? Then I will repay the credit card monthly without any interest for the specific duration.

What kind of credit card do I need because I never had a credit card before?

Thank you, Nick

[Deleted User]

You'd need a money transfer offer for the loan and also probably go the car, as most sellers don't accept cards for full payment.

You may be better off letting the loan roll into the interest rate, given the money transfer fees and then save for the car. If you've never had a card before, you're also unlikely to get the best offers.

Kachaka

I know 2.5% interest is low but wanted to know if I can avoid it at all. I understood that is better not do anything because of the fees.

Which credit card is the best to improve my credit history and also to use it for some purchases with NO interest? 

eskbanker

Kachaka said:

Which credit card is the best to improve my credit history and also to use it for some purchases with NO interest? 

Any that will accept you, but, as above, don't get your hopes up for decent deals from prime providers if you haven't had a card before - try the eligibility checkers linked from:
https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/
https://www.moneysavingexpert.com/credit-cards/money-transfers/

[Deleted User]

Kachaka said:

I know 2.5% interest is low but wanted to know if I can avoid it at all. I understood that is better not do anything because of the fees.

Which credit card is the best to improve my credit history and also to use it for some purchases with NO interest? 

It's also generally better to not use a card with a balance on it e.g. from a money transfer AND spend on it in case the payments start being allocated to the wrong place or you start getting interest. If you have little or no credit history, you're highly unlikely to get a card with a huge limit anyway, it could be as low as £500, rather than in the thousands

Ebe_Scrooge

Kachaka said:

Which credit card is the best to improve my credit history and also to use it for some purchases with NO interest? 

As per the previous replies, with a thin credit file you're unlikely to be offered a 0% card, and you're likely to be given a low initial credit limit.

To answer your specific question, any card will improve your credit history and charge no interest as long as you use it correctly.  Use it for everyday purchases, things you have to buy anyway (food, petrol, whatever).  Wait for the statement to arrive each month, then pay it off in full every month.  So long as you do this you won't be charged any interest, and you'll begin to build up a favourable credit history.  The APR is irrelevant since you won't be charged interest.

It's only if you fail to clear the balance in full that you'll start being charged interest.  Plus, if you don't clear the balance in full, it's not as good for your credit history (it's not disastrous, but clearing in full looks a lot, lot better).

As long as you can be disciplined, and only buy things that you know you can afford to pay for at the end of the month, then a credit card is probably the simplest way of starting to build up a favourable history.