Credit Cards

satriales wrote:I got a Tesco credit card a few months back as it gave £1000 interest free for 12 months or so. I used it to buy loads of stuff when I had just started my new job and hadn't been paid yet.

Now I have it set to take £50 from my current account every month and it should be paid off by the end of the year with no charges or interest.

If you're really savvy then you can get multiple interest free cards and put the money in savings so you are earning interest on money you are borrowing for free. But at 3.0% interest £1000 will only earn £30 in a year, so it's probably not worth the hassle unless you can get a better interest rate or if you can borrow more than that.

One thing to remember is that the credit cards do usually require you to pay back a minimum each month, which is about £20 or 5% of what you borrowed. You can set it up to take this automatically each month.

He'd need to find a credit card that allows cash withdrawals that are free on interest and have no fees for withdrawing.

Good luck finding many.

Hime wrote:just buy loads of stuff you want and pay back the minimum each month

This one seem alright for a "credit builder"?

http://www.aquacard.co.uk/MSMreward2

I was just about to apply for it but thought I better check with you guys in case I'm missing anything.

Prototype wrote:

Hime wrote:just buy loads of stuff you want and pay back the minimum each month

Mock all you like, I would bet I have a better credit rating than most.

Tragic, seriously don't be scared by credit. I know you have probably heard horror stories such as 'I bought a bag of haribo on my credit card - next thing I know my house was being repossessed'. This only happens to stupid people.

I sometimes have little spending sprees on my credit card but I always make sure it doesn't get out of control, yes it means I will occasionally pay more for things because of interest but it's hardly the end of the world. I imagine it's fairly safe to assume you're internet savvy by virtue of you being here; once you get your credit card just sort out your log in info on the lenders website, get a direct debit set up and Bobs your uncle. Sounds like you're more than capable of looking after yourself financially and having a decent credit rating will no doubt help you at some point.

I have a Natwest YourPoints Mastercard, 0% for 13 months and credit limit definitely a few K higher than I'd imagined I would get. It's my first credit card at 23 as I've never felt the need for one in the past, like you not living beyond my means - but there are uses for credit that you'll have to face eventually, be it a mortgage or car finance etc.

Whichever bank you have your current account with, if you approach them for a credit card (ask specifically for a 0% interest for X months one), you're A. more likely to be accepted for it and B. will surely get a higher credit limit as they'll probably rely on their internal grading system for existing customers.

I recently got a Nationwide Select credit card (as I'm with Nationwide). £1800 credit limit and the first thing I've bought on it was £77 and I haven't paid any off yet but I'm going to rinse the 12 month interest free period.

So yeah, go with your bank rather than anyone else.

Hmm, interesting. I'll definitely have a look on my bank's website tomorrow night then. Is it easy enough, if at all possible, to get a card in both our names that we both use? I was just gonna get one for myself but my good lady inquired about getting a joint one.

Tragic Magic wrote:Hmm, interesting. I'll definitely have a look on my bank's website tomorrow night then. Is it easy enough, if at all possible, to get a card in both our names that we both use? I was just gonna get one for myself but my good lady inquired about getting a joint one.

You can add her onto your credit card as an authorised user but it won't help her credit rating, as all responsibility lies with you. She would be better to get her own credit card.

Don't forget you don't have to keep the limit the bank gives you, you can always have a card each & ensure the limits across both account is affordable.

With the exception of short term loans/payday lenders, Banks offer some of the worst value for money when it comes to financial products if you go to them directly. My Virgin Atlantic credit card has 2-3% less interest per year and when I was looking for a car loan years back the bank wanted 10%pa whilst the Honda dealership's own finance only wanted 3.5%.

That's not a surprise - if you default the bank ends up with a car which it'd lose a lot of money on. The dealership on the other hand would be able to sell it second hand and has all the facilities to maximise the value.

Some points from someone who's not only worked in a bank for 4 years, but has also used credit to rebuild up my credit file:

Step 1: Check your credit file (for free) at Noddle There's no catches if you just grab the basic credit file. THE most important thing on your credit report (which is what potential creditors check) is the accuracy of the data. Wrong spelling of names, addresses, not being on electoral role (the NON-marketing version preferably) can all have an impact on your credit report.

Step 2: Forget about your credit score. EVERY single lender uses their own criteria when marking you and each piece of info from your file build up an overall score. But some companies value time in job over address length, some score having a land-line better than others, etc. So as long as A). Your data is 100% accurate B). You're on the electoral role and C). Have ZERO missed payments, your credit file will be on its way to being top-notch.

Step 3: For the love of God, be sure to set up a Direct Debit for the minimum payment (at least)! You can always pay off the rest if you want, but I've seen SO many people get a missed payment mark simply cause they forgot or something in life cropped up and they forgot. Missed payment marks (these days) can have very harsh penalties when you're looking for other credit.

Step 4: Grabbing a high APR card can be good however, paying it off in full isn't a great idea as many credit reports show underwriters how much you payback each month. If the balance tallies with the payback, you'll make them zero profit. I've seen perfectly good people turned down because they never pay interest at all on credit cards. Credit it about risk AND profit for companies. So, - what I did years ago - was spend £50 on a high APR card and split the payments into 6 even monthly figures. This helped improve my credit report and I then moved up to a better APR card afterwards (then I CLOSED the old card immediately). I effectively repeated these steps for several years until I went from not-a-chance-at-credit to mainstream cards (and mortgage) with no problems.

Also, make sure your credit limit isn't more than £500 (£1k max), if you DO go nuts, then at least it won't kill you trying to pay it back.

If you need anymore help, just PM me

I have no knowledge of credit cards, but just wanted to say me and Dangerblade got a mortgage easy as anything and neither of us have ever had any kind of credit card (or anything on credit whatsoever.) I think banks are more interested in your deposit nowadays.

How much percentage of the full price was your deposit? If it's okay to ask.

BraithGwirod wrote:I have no knowledge of credit cards, but just wanted to say me and Dangerblade got a mortgage easy as anything and neither of us have ever had any kind of credit card (or anything on credit whatsoever.) I think banks are more interested in your deposit nowadays.

I had the same. But mortgages come under a different credit rating thing I think

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Tragic Magic wrote:How much percentage of the full price was your deposit? If it's okay to ask.

15%

Errkal wrote:

BraithGwirod wrote:I have no knowledge of credit cards, but just wanted to say me and Dangerblade got a mortgage easy as anything and neither of us have ever had any kind of credit card (or anything on credit whatsoever.) I think banks are more interested in your deposit nowadays.

I had the same. But mortgages come under a different credit rating thing I think

No, no they don't. Your deposit amount is indeed crucial to even being looked at (unless you want an arse-rapingly high interest rate on a 95% mortgage ), but your credit file is your credit file it's just that there's technically THREE versions of it out there (one with Experian, one with Equifax and one with call-credit). And the companies you have existing credit agreements with decide which of those three they want to update your credit info with (could be one, two or all three of them) and it's not surprising to find some credit missing from one or more of the credit file companies.

But the better the deposit, the better the deal (but your credit file is still very important when a company is looking to lend you upwards of £50,000+).

Andrew Mills wrote:

Errkal wrote:

BraithGwirod wrote:I have no knowledge of credit cards, but just wanted to say me and Dangerblade got a mortgage easy as anything and neither of us have ever had any kind of credit card (or anything on credit whatsoever.) I think banks are more interested in your deposit nowadays.

I had the same. But mortgages come under a different credit rating thing I think

No, no they don't. Your deposit amount is indeed crucial to even being looked at (unless you want an arse-rapingly high interest rate on a 95% mortgage ), but your credit file is your credit file it's just that there's technically THREE versions of it out there (one with Experian, one with Equifax and one with call-credit). And the companies you have existing credit agreements with decide which of those three they want to update your credit info with (could be one, two or all three of them) and it's not surprising to find some credit missing from one or more of the credit file companies.

But the better the deposit, the better the deal (but your credit file is still very important when a company is looking to lend you upwards of £50,000+).

See, this is still what I don't understand! Our mortgage adviser said we both have excellent credit scores and I can't for the life of me figure out why We both lived at home, with no rent, didn't have any credit cards or overdrafts, and as far as I was aware should have been completely neutral. Idgi. I asked her about getting a credit card to use for a small amount every month and pay it off straight away to build up credit and she said it was completely un-necessary. I guess, Tragic Magic, that you should go see a mortgage adviser at your chosen bank (or maybe a couple) and ask them for help.

Yeah, I'm thinking that might be a good idea too. I did have a free trial with credit expert which told me I had a good credit rating and the only negative was that I'm young but I dunno how much info that goes off?

Tragic Magic wrote:Yeah, I'm thinking that might be a good idea too. I did have a free trial with credit expert which told me I had a good credit rating and the only negative was that I'm young but I dunno how much info that goes off?

Well, I was a year younger than you when we first had our mortgage discussion and my age was never an issue. If you can pony up the money, it doesn't matter.

I would suggest getting your bank of choice to run a check on you, because they all have different criteria for what makes their ideal borrower. Plus, they can then tell you how much you'll need for a deposit to get the best rate, and how much you can borrow; giving you a better idea of what you can look at.

I'm in a similar boat, I'm thinking of getting a credit card to improve my credit rating, as far as I know it should be relatively neutral, I only have a phone bill (always paid for in full) and my student loan.

I have the funds to make a few purchases (say a holiday) and pay it off the following month. Any recommendations who to use? I'd strawberry floating love to get a customised design ala Barclays and put the image of Fry saying "Here take my money!"