Looking to get my first credit card, advice much appreciated :)

backinbusiness

You also need to check your supplier will accept payment by credit card - not all trades do.  Good luck.

Exodi

I think a lot of posters have been unfair in this thread. I think the OP has also misunderstood Martin Lewis's advice.

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?  

What Martin Lewis is referring to, is CC's that charge interest on any outstanding balance. If you are using a non-promotional credit card, then obviously you should pay off the credit card in full, or you end up paying ~30% APR in interest.

The OP explictly mentioned wanting to get an interest free credit card. It's obviously silly to suggest that the OP pays off a 0% credit card in full every month (and definitely not good money saving advice). In fact not doing so is a common tactic by members of this forum - whereby the OP could keep her £3k in a savings account earning interest, while paying minimum payments on a 0% card (it's called 'Stoozing'). When the promotional period is about to end, you pay off the card in full.

backinbusiness said:

You also need to check your supplier will accept payment by credit card - not all trades do.  Good luck.

This is probably the most important thing that has not gotten enough attention in this thread.

Most self employed tradespeople will not accept credit card and will generally want payment by bank transfer.

If you used a big company that accepts credit card, it's likely they'll offer 0% finance deals and you won't need the card. Unfortunately these big companies will also be the most expensive *cough* british gas *cough*.

Torque79 said:

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

I won't dwell on this because I can understand why you mentioned it, but please keep in mind this can be a slippery slope. Obviously lenders don't make money on 0% deals - the strategy is counting on people borrowing on 0% deals and not being able to clear them when the promotional period ends.

Jami74

Torque79 said:

Any advice and guidance is much appreciate.  

Divide the cost/debt by number of interest free months minus 1. Eg £3000/18-1 = £177 and set this as your direct debit. Make sure you meet these payments, take from savings if necessary. The reason for minus 1 is because the interest free period may end before that months direct debit is taken.

Pay the minimum payment manually the first month just in case the direct debit hasn't set up properly. If payment isn't made on time you could lose the interest free promotion.

Once you've made your big purchase, freeze the card in the app and remove it from your wallet so it isn't used for anything else.

Check the app regularly so you spot any fraudulent activity immediately.

Exodi

Jami74 said:

Torque79 said:

Any advice and guidance is much appreciate.  

Divide the cost/debt by number of interest free months minus 1. Eg £3000/18-1 = £177 and set this as your direct debit. Make sure you meet these payments, take from savings if necessary. The reason for minus 1 is because the interest free period may end before that months direct debit is taken.

Pay the minimum payment manually the first month just in case the direct debit hasn't set up properly. If payment isn't made on time you could lose the interest free promotion.

Once you've made your big purchase, freeze the card in the app and remove it from your wallet so it isn't used for anything else.

Check the app regularly so you spot any fraudulent activity immediately.

If the OP wanted to be a true 'Money Saving Expert', they'd pay the minimum payment by DD and keep as much money in savings earning interest for as long as possible.

They would then pay off the entire balance in full just before the promotional period ends.

The difference between the two strategies is discipline.

If there is any chance the money in the savings account would start to burn a hole in the OP's pocket, the OP could also consider locking up the money in a fixed savings account, only accessible near when the promotional period ends.

Lots of options, though for the sake of £3k we're talking about maybe £90 interest over a year... this means different things to different people.

Jami74

Exodi said:

If the OP wanted to be a true 'Money Saving Expert', they'd pay the minimum payment by DD and keep as much money in savings earning interest for as long as possible.

They would then pay off the entire balance in full just before the promotional period ends.

Yes of course they would! Sometimes it's easier to start with the basics though

KxMx

Someone new to credit is really unlikely to get a 3k, decent interest free period card though. 

enthusiasticsaver

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  

It is not a good idea to get a credit card if you are going to  be tempted to spend when you cannot afford things so getting it when times are hard is not the answer. Eating out and getting takeaways to deal with stress is definitely not the way to go if money is tight either.  Look for other ways to destress which do not cost a lot like going for a walk or listening to music, reading a book etc etc.   Taking on debt when money is tight is the last thing you should do.  Cutting back on expenditure or increase income is the answer for this.  

Getting a credit card to buy large purchases however is ok if you can afford them and the ideal way to pay is to pay the bill off at the end of the month in Full. If you get an interest free card then it is acceptable to pay off your boiler in instalments so long as you do not incur interest and can afford to clear it ideally within the deal period. 

As you have the cash to pay for the boiler outright I would do that and replenish your savings gradually. 

Torque79

cymruchris said:

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?

I am realising that the way I deal with money whilst logical and strategic in a good way is also my downfall in taking advantage of interest free borrowing!   I was raised to save and stay solvent or solvent as possible hence the only current debt been the mortgage.  

Anyways I have successfully applied for a 0% on purchases over 24 months 

Torque79

The card limit cover's the boiler purchase fully.  

My experience with trades people is zero when it comes to a large transaction. 
Sure I have authorised a plumber source and install parts for the tanks in the loft however a new boiler installation is different. I want the cover the credit card provides on purchases i.e. the boiler.

However the engineer's quotation for the boiler - is it common practice for the plumber to source a big purchase such as the boiler themselves and then I pay them or do I source the boiler myself and then pay the engineer for the generic parts and labour? 

thanks.  

MorningcoffeeIV

It depends on the engineer. A regular plumber won't touch your boiler.