Looking to get my first credit card, advice much appreciated :) 27 January at 12:04AM in Credit cards 20 replies 657 views

Torque79

Hi, I have fortunately never required a credit card over the years however time are getting hard, and I understand having a credit card could / would benefit me.

I am in need of a new boiler, which is going to cost approx 3k.  I have the cash to pay outright however.... 

1) re-saving the approx 3k whilst know I can do this, I am spinning a lot of plates (isn't everyone!) and my current mindset is to treat myself e.g. eating out., take aways etc to cope with current stresses and therefore I won't be saving hard.  So I figure making it a debt (interest-free obviosuly), I would be pushed to make payments. Is it wise to take out debt when you can pay outright?  

2) I understand by purchasing via a credit card there are benefits e.g. protection / insurance - what sort of benefits are there?  

3) Listening to Martin Lewis on his TV shows, he says "pay it in full" however I thought the whole point of a credit card was it was small interest free monthly payments?  

Any advice and guidance is much appreciate.  

Kind regards  

Torque79

Also....

Credit card - what sort of credit card would be best for a 3k purchase? 

thanks

Reddleman79

As Martin Lewis says, pay it off in full. The interest rates on credit cards are HIGH. I pay both of mine off in full by direct debits from my current account. In the days when times were hard for me I did without meals out, takeaways etc. until I could truly afford them

MikeJXE

Torque79 said:

Hi, I have fortunately never required a credit card over the years however time are getting hard, and I understand having a credit card could / would benefit me.

I am in need of a new boiler, which is going to cost approx 3k.  I have the cash to pay outright however.... 

1) re-saving the approx 3k whilst know I can do this, I am spinning a lot of plates (isn't everyone!) and my current mindset is to treat myself e.g. eating out., take aways etc to cope with current stresses and therefore I won't be saving hard.  So I figure making it a debt (interest-free obviosuly), I would be pushed to make payments. Is it wise to take out debt when you can pay outright?  

2) I understand by purchasing via a credit card there are benefits e.g. protection / insurance - what sort of benefits are there?  

3) Listening to Martin Lewis on his TV shows, he says "pay it in full" however I thought the whole point of a credit card was it was small interest free monthly payments?  

Any advice and guidance is much appreciate.  

Kind regards  

I buy everything on credit card since Covid 

I also pay the balance in full every month 

The small interest free payments you talk about are actually very HIGH interest payments 

If you can handle you finances a credit card is the way to go but if not, one day you will be on here asking for help to clear your massive debts 

Caz3121

If you have not had a card before you may not qualify for any of the interest free offers
it is also not uncommon for first cards to have a low limit...maybe £250/£300 

Torque79

Reddleman79 said:

As Martin Lewis says, pay it off in full. The interest rates on credit cards are HIGH. I pay both of mine off in full by direct debits from my current account. In the days when times were hard for me I did without meals out, takeaways etc. until I could truly afford them

Thank you for confirming.
So from a financial perspective me paying 3k cash or clearing 3k balance straight away is 6 and two 3s.


However what security / insurance benefit could be gained paying by credit card?  After all it is a significant purchase and a boiler is an important investment.

Thanks 

Torque79

Caz3121 said:

If you have not had a card before you may not qualify for any of the interest free offers
it is also not uncommon for first cards to have a low limit...maybe £250/£300 

Even if you have been a home owner / mortgage over payer for 15 years? 

cymruchris

Torque79 said:

Caz3121 said:

If you have not had a card before you may not qualify for any of the interest free offers
it is also not uncommon for first cards to have a low limit...maybe £250/£300 

Even if you have been a home owner / mortgage over payer for 15 years? 

Possibly - hard to say without knowing exactly what's on your credit file. Those that have quite a few well-managed active accounts tend to get accepted more readily than those that only have their mortgage and a current account on their history.

What you'd ideally like to have is a 0 percent purchase or 0 percent money transfer card - the former lets you pay for something in full now (subject to credit limit) and then pay for it in full by the time your interest free period is up - the latter lets you transfer money to your current account (usually for a fee) but the balance itself is interest free for a given period.

As outlined - if your credit file is thin - you may not get the best deals.

Many credit card providers (not all) have eligibility checkers directly on their websites - using these checkers will not affect your credit history or rating - so my recommendation would be to look for 0% purchase cards and use the eligibility checkers to see your chance of success. Some also give indicative credit limits. Does your bank (current account or mortgage) offer one?

horsewithnoname

What lenders will look for on your credit file is evidence of how you handle debt. If you’ve hardly ever had any debt then there is no evidence and lenders may not look favourably enough to offer you their products. But if you can pay outright and build back your savings by treating yourself less, well your choice but that’s what I’d do. 

MikeJXE

Torque79 said:

Reddleman79 said:

As Martin Lewis says, pay it off in full. The interest rates on credit cards are HIGH. I pay both of mine off in full by direct debits from my current account. In the days when times were hard for me I did without meals out, takeaways etc. until I could truly afford them

Thank you for confirming.
So from a financial perspective me paying 3k cash or clearing 3k balance straight away is 6 and two 3s.


However what security / insurance benefit could be gained paying by credit card?  After all it is a significant purchase and a boiler is an important investment.

Thanks 

Choose a good boiler manufacturer with a long warranty maybe 10 years 

Choose a gas safe registered engineer 

Be on site when it's fitted 

Have it serviced as per manufacturer requirements 

You don't need the protection of a credit card then 

If you choose BG you will be paying over the odds for interest free payments 

Will_Riker

Torque79 said:

Reddleman79 said:

As Martin Lewis says, pay it off in full. The interest rates on credit cards are HIGH. I pay both of mine off in full by direct debits from my current account. In the days when times were hard for me I did without meals out, takeaways etc. until I could truly afford them

However what security / insurance benefit could be gained paying by credit card?

The main one is the protection offered by the Section 75 regulations.  Basically, if the supplier fails to honour their contract with you, and will not reimburse you, then you can claim against the credit card company.

In your case, if you pay for the boiler up front, but the company goes bust before they can fit it, then you can claim the cost back from the credit card company.  Or, if the boiler turns out to be faulty as soon as it's fitted and the installer won't help, you could make a claim for the repairs from your credit card.  Important to note that there are restrictions on what's covered, and it's not a catch-all get-out-of-jail-free-card.

All this assumes the installer will accept payment by credit card - most large companies will, but many smaller independent companies won't.  And assuming you can get a card with a high enough limit.

Torque79 said:

3) Listening to Martin Lewis on his TV shows, he says "pay it in full" however I thought the whole point of a credit card was it was small interest free monthly payments?

You need to be clear on what type of credit card you have.  An "ordinary" credit card will charge quite a high rate of interest every month, unless you clear the balance in full.  There are sometimes offers available whereby they charge 0% interest for a set period (the first 18 months, for example).  If you can get a 0% card then yes, you can split the payments up over the 18 months or whatever.  However, you may find it hard to be accepted for a 0% card if you have little credit history.  If the only card you can get is an ordinary interest-charging card then carrying a balance from month to month will work out very expensive.