Credit Card for a Credit Newbie

Hello,

I am keen on getting my first credit card. I have a good credit score as I have never gotten into debt but conversely it has meant I haven't had enough credit history to get an excellent credit score. However, I recently have a mortgage which has built up some credit history now.

I have seen some credit cards are good for building my credit score whilst others are good for getting rewards. I envisage I would pay the balance off every month, which means either of these types of card would be suitable.

Can anyone advise me which type of card would be best?

The zero balance and zero interest credit cards wouldn't be any use to me so I have disregarded these ones.

Thanks,

Theo

Comments

  • elkiedee
    elkiedee Posts: 48
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    Is there a particular reason why you need to build up your credit score? You say you have a mortgage. Have you had problems getting credit for something you need? Getting a credit card may help you build your theoretical credit score but if you're not finding it difficult to access needed credit, I wouldn't worry too much about the credit score for its own sake.

    Cards vary in how long they give you to pay them off and the APR. If you have a reasonable history with your bank where you hold a current account, they will know how you manage your money and this may be a good place to start. I would check the time the card gives you to pay it off. If you want reward schemes, check these are ones you're likely to use anyway. Don't be tempted to overspend for rewards, but getting vouchers/discounts/cashback for money you would spend/shops you go to anyway is more useful. If you travel a lot, a credit card may be really helpful for hotel bookings, and you might want to look at offers on foreign currency transactions etc.
  • CliveOfIndia
    CliveOfIndia Posts: 1,187
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    You can safely ignore your score, since it's not used - nor even seen - by any lender.  They will assess you against their lending criteria using purely the data contained within your credit file.
    You refer to a credit history - this is what's really important.  Basically any lender likes to see a solid history of responsible borrowing and always repaying what you owe.  Any form of credit agreement will help to build up a history - mortgage, loan, mobile phone contract, etc.  Although, never be tempted to take out a loan purely with the aim of building a history !
    A credit card is a simple - and totally free - method of building history.  Use it for everyday, planned purchases such as food, petrol, whatever, things you'd have to buy anyway.  Crucially, make sure you always pay the full statement balance when you get the bill, on time, every month, without fail.  Doing this means you won't pay any interest or charges, and you'll gradually build up a favourable history.  (Actually, there are a few cards out there that charge an annual fee in return for some perks or other, such as airport lounge access or some-such.  They are in the minority - most "ordinary" cards don't charge a fee, and will be totally free to use as long as you always repay in full every month).
    TCDSTM18 said:

    I have seen some credit cards are good for building my credit score whilst others are good for getting rewards.
    If you're always going to be repaying in full (which should always be your aim anyway, for any type of card apart from one that's got a 0% promotion running), then a rewards card is ideal.  However, with a limited credit history, you may struggle to be accepted for one.  This is where the so-called "credit-builder" cards come in.  They tend to have less strict acceptance criteria, in return for which they'll give you a low limit and a high APR.  The APR is irrelevant as you'll be paying in full every month.  The low initial limit doesn't matter as such - just use it regularly and make sure you don't go above the limit.
    After maybe a year, 18 months, something like that, you'll have built up enough of a favourable history to start applying for more "mainstream" cards, possibly ones that offer rewards.
    There's nothing lost by trying an eligibility calculator for a rewards card now, but don't be too disheartened if you're turned down.  Ideally use the card's own website to run an eligibility check, rather than a third-party site, as their own website will tend to be slightly more accurate.  But do bear in mind that even if the eligibility check gives you a reasonable chance of acceptance, you won't know for certain until you complete a full application.  If you do apply and get refused, leave it for a while.  More than a couple of hard searches in a short space of time can leave a negative impact on your credit history.

  • elkiedee said:
    Is there a particular reason why you need to build up your credit score? You say you have a mortgage. Have you had problems getting credit for something you need? 
    There is no particular reason for building up my credit score atm and I have got credit  before. I was just thinking that it might get me a better rate in the future should I ever need finance but presumably I would build my credit score even with a rewards card, so I shouldn't be too overly concerned with this from what you're saying.

    Unfortunately, when I used the switch service, it erased my credit history with the card, which I didn't know about but it didn't affect it too badly.
  • Nasqueron
    Nasqueron Posts: 8,311
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    Please stop thinking about the gimmick score, you do not need to do anything with it as no lender ever sees it, it's purely there for entertainment purposes and serves no other purpose. You want to build a solid credit history of spending on the card, paying the bill on time every month (in full, by direct debit), ensure you are correctly on the electoral role, contract mobile phone paid monthly on time etc
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