unsure on credit cards for starting a credit score

T_ranter19

Im looking to get a credit card to increase/ start my credit score. i have very little knowledge of how credit card work. the only purchases i plan to make on a credit card are weekly shop and fuel ect, stuff i know for sure i can pay off each month. however i need help with how to pay off each month and exactly what will happen if i fail to pay it off (all of the %  and APR talk confuses me) basically i need a very dumbed down version of which credit card type and how they work. 
i hope this makes sense so someone can help me out
thanks

[Deleted User]

Any credit card will do.  Try a subprime provider or your own bank.

You put your normal spend on it, staying within your limits and clear in full when you get the statement and before the due date. The APR doesn't matter as you won't pay interest. Set up a DD for full payment and it will take care of itself.

Ignore your credit score as that's not used in lending decisions. Just manage your credit responsibly.

Ebe_Scrooge

As per the above, any credit card will do (just make sure you don't go for one that charges an annual fee - they are in the minority, but there are some).  And yes, you really need to make sure you pay the statement IN FULL when it arrives (well, strictly speaking, after it arrives but before the "payment due date", which gives you about a 3 week window usually).

If you don't pay the full statement balance, you'll be charged interest.  And it doesn't look as good on your credit history, which you say is your primary aim.  It's not bad, as such, but paying in full is viewed as even better.  However, whatever else you do, you absolutely MUST pay at least the minimum amount (which will be detailed on each statement).  Pay less than the minimum and you'll be hit with a late payment fee as well as a black mark on your credit file.  But simplest and best is just to ensure you always pay in full - ideally by means of a direct debit so that you never forget.

A common misconception in terms of the interest that's charged if you don't pay the statement in full - you'll be charged interest on the full statement balance, not just the portion that's left after you've made a partial payment.  To work out the monthly interest, you divide the APR by 12, since APR is the Annual rate.  An example .........

The APR on your card is 35%.  You have £500 balance on your card.  In simple terms, that would cost you £175 per year in interest.  Divide £175 by 12, you get £14.58 per month.

Or, to look at it the other way, if the APR is 35%, that's 2.92% per month - which still equates to the same monthly interest amount (give or take a couple of pence for rounding in the example I've used).

Now, if you have that £500 on the statement, and you pay off £500 when the statement arrives, you'll pay zero interest.  But if you pay off £499, you'll be charged £14.58 - the interest on the full £500.  You won't get away with only being charged interest on the £1 that's remaining.  It's perfectly logical if you think through how it works, but it does catch a lot of people out.

This explanation is perhaps a littler more detailed than you need - but hopefully it helps to explain how credit cards work

cymruchris

Use the card providers actual website to check eligibility - don't use a comparison site. Run the check with your own bank, and then the likes of Vanquis, Aqua, Capital One to see what they say. Only make a FULL application for one card to start with. If they say yes - then you get it - you put your shopping spend on it - wait for the statement - and then have a  direct debit to pay it off in full. No interest will be charged (Unless you withdraw cash - which is a big NO NO unless it's a life and death emergency). If the eligibility checks all come back as no - then check the basics - like are you on the electoral roll and that there are no nasty history errors on your credit reports. 

Alex9384

First choose what card you'd like to have. Then use their online eligibility check (which doesn't leave a search on your credit files). If it says you are very likely to be accepted, proceed to full application.

If the application is successful, you will see what your credit limit is. For example £1000. When you log into your credit card account, you will see available credit £1000. Then you spend for example £125, your available credit will be reduced to £875 until you pay the money back. Always pay AFTER the monthly statement is produced. They will usually send you an email or SMS, or you can opt for paper statements sent by post. On the statement you see the amount you owe and when you need to pay it. Let's say the statement is produced on the 1st of every month and the due date is 21st. If you want to pay manually, it's better to pay a few days before the due date. Best option is to set up a direct debit so it will be their responsibility to take the payment on time. If you want a slightly more complicated options, you can pay by banks transfer, by telephone or by post. But everyone on here will recommend you to set up a direct debit. Just make sure you have enough money in your current account for the DD. Some companies ask you if you want to set up a direct debit for your new card as soon as you finish the application. Others don't so keep it in mind and do it asap. Always set up direct debit for FULL amount, which means you will never pay any interest. In that case you don't need to care about any APR.

After some time (typically 6 months from account opening) you can try to increase your credit limit, even if you don't plan to spend more. It's just to show other lenders that your card provider trusts you enough to offer you more credit. Never reduce your credit limit as this might indicate the opposite.
Also, don't max out your card every month as this would make it look like you are relying on credit too much. If it's your first card, your credit limit will be probably pretty low. Let's say you get £500 limit, just spend £100-150 each month, then wait for the statement, pay in full (or just let them take the DD), then repeat the next month, and so on.

Anything else you'd like to know?