New to Credit Cards!

petshopgirlemma

I'm trying to find a way of avoiding using my savings while I am working fewer hours and doing some training over the next few months.

Having read the credit card section on the website I think it would be a good idea for me to get a credit card that charges me 0% on purchases for 6 months - is this right? My bank, Lloyds TSB have a credit card available that is on 0% for 6 months.

(http://www.lloydstsb.com/credit_card_app/advance.asp)

I've never had a credit card before or an overdraft so I am quite new to all this so don't fully understand how credit cards work.

Do I need to pay something off each month if it is 0% on purchases?

If I spend (eg) £200 does it just stay as £200 borrowed or does it get interest and charges on it from somewhere else?

At the end of the 6 months, can I just pay off the amount I have borrowed?

Is this the best card for me or should I go to a different bank?

I'm really not interested in this stage in cash back offers and all of that, I think I need to get my head around credit cards first!

ShelfStacker_3

You will always have to pay an amount each month with ANY credit card, regardless of interest rate. If you cannot afford to pay substantially more than the minimum payment on the card's summary box, I politely encourage you to stay as far away from credit cards as you possibly can. (Paying the minimum payment, if you don't know, will make your debt very hard to clear, avoid it.)

A credit card is good because it has flexible repayments; so long as you pay at least the minimum repayment each month, the card company doesn't care. So, yes, you could theoretically pay the minimum payment each month and pay the rest back. However, as you're new to credit you're unlikely to get a card with a mainstream bank (Lloyds TSB are definitely a no-no) and will end up with quite a high interest rate (roughly 30% APR or more!) and if you do this will pay a LOT in interest.

For your case I strongly recommend you avoid credit cards like the plague, as they can be a very painful experience if, like you say, you have little income and much spending.

My advice would be to go to Lloyds and ask for an overdraft (if you use their online form, say you have a "cashflow shortfall" and choose a 6/9 month term they'll probably give you at least £50 o/d straight off, that was my experience); you'll pay interest, but less than you would on a credit card. I would strongly suggest you cut your teeth on an overdraft and read up a bit more on the mechanics of credit cards before you apply for one. In the wrong hands, they can be ruinous financially.

YorkshireBoy

ShelfStacker wrote: »

However, as you're new to credit you're unlikely to get a card with a mainstream bank (Lloyds TSB are definitely a no-no) and will end up with quite a high interest rate (roughly 30% APR or more!)

LTSB would be the best to approach initially, since they know more about the OP, and her financial affairs, than another lender would.

However, the Advance card would be a poor choice longer term since it doesn't offer an interest free period (of the standard 50+ days) on purchases following the end of the introductory period like almost all other cards do.


OP: At the top of the screen is a blue tab marked "CARDS LOANS". I suggest you take a look at the articles in there before making any applications.