Thank God, I was wondering whether there were any human beings left after this thread... starting to think I should have been brought up by robots and was missing out on something
Can anyone advise me on Credit Cards?
- Thread starter Nitrojan
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Thank God, I was wondering whether there were any human beings left after this thread... starting to think I should have been brought up by robots and was missing out on something
I disagree.. Who says you can't have the time of your life and be sensible at the same time?
I dont know who says that?. Not quite sure I did.
I said assess what kind of person you are, then if you know you are 100% switched on then you will have no issues.
Some people, like myself at that age, would live beyond my means too often and rarely like the idea of missing out on a party etc due to finances. So I used cards foolishly.
[TW]Fox;17994784 said:
Yeah, um, I think you're missing the point here, again. Sigh, there's one thing which seperates those two completely different things - temptation. Do we buy a car thinking "ooh I'm quite tempted to go and run someone over now"
Does that even cross our mind? No.
Do we do silly, stupid things when we are 18, like think we have everything figured out, know the world inside out and all of it's wicked ways? Yes... do we buy a credit card whilst in the very recesses of our mind bear the thought "hey this could bail me out of a few situations, get me that thing I've been after for ages etc."?
Yes.
That's not true. Firstly, credit card companies make most of their money from the 1-3% they charge the retailer on each transaction, not the interest on outstanding debts. Secondly, your credit rating is not a level of how profitable you are as a customer, it's a measure of your credit history. What lines of credit have been extended to you and how you have paid them off.
Have you never seen your own credit rating? It has rows of 1s and 0s under each credit line corresponding to each month.
Im a student with a part time job earning about £400 a month, i'm looking to get my first credit card to build up a credit rating, i was thinking about taking one with my bank
http://www.cbonline.co.uk/personal/credit-cards/gold-mastercard/ does this one seem okay or should i look elsewhere? Also do you think my low salary will stop me from being accepted for one?
http://www.cbonline.co.uk/personal/credit-cards/gold-mastercard/ does this one seem okay or should i look elsewhere? Also do you think my low salary will stop me from being accepted for one?
Firstly, your first point is wrong. The majority of income is from interest. With a minimum of 3% owed on balances as a minimum payment and the average balance of a UK credit card is £1700, that's a minimum payment of £38 the majority of which is an interest payment added to the balance which is then compounded.
Secondly, I never said it was a measure of how profitable you are, but it directly affects the attraction of other CC suppliers and the offers they give you. If you pay off your balance in full, there is no attraction to other suppliers to even offer you a credit card. In theory therefore, your CR remains unchanged and plateaus.
I have full access to "my credit check" and haven't seen these 0s and 1s. Just a mention if latepayment or defaults are listed. Having worked in the credit risk and management industry for 5 years with one of the worlds largest banks, I have a fair understanding of how they like to operate, and they love people who can't pay off balances in full so much that they lead them into a false sense of security with a stupidly high credit score as long as they are meeting their payments.
On the flip side of this though, if you do have a credit card, use it, but pay off the full balance from your bank account and do not use your debit card. This is a win for bank based scoring and this does help increase your CR
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Tell you what - take 2 people - one has never had any form of credit in his entire life. The other has had numerous cards and always pays the balance off in full. Both are the same age.
Let both apply for a new card and see who gets accepted with the higher limit
I've never paid a penny in interest on a credit card and now have a ridiculously stupid amount of credit I simply don't need available.
Whilst its true that the more interest you pay the better a customer you are, it's not only about that - it's also about how much of a risk you represent.
I have had one or more credit cards that I have paid off in full every month since I was 18 (6 years). I was recently told by my bank that I have a very good credit score and that I could only really improve it by getting a mortgage. It would seem I am a fairly 'safe' customer.
I would like to ask what you mean by this. I currently use an Egg Money World Mastercard and pay it off each month by Direct Debit. I also often make additional payments using my debit card. I was recently informed that I can make payments to my credit card by Faster Payment. Are you suggesting that doing that will be better for my credit score than debit card payments?
Thanks in advance,
Jon
I would like to ask what you mean by this. I currently use an Egg Money World Mastercard and pay it off each month by Direct Debit. I also often make additional payments using my debit card. I was recently informed that I can make payments to my credit card by Faster Payment. Are you suggesting that doing that will be better for my credit score than debit card payments?
Thanks in advance,
Jon
basically it works like this. Use your credit card to pay for all your monthly goods, bills, etc and then pay the balance off in full by DD from your bank account. Banks bas e thier own lending criteria on the number of debits vs credits put through the account in a monthly period. So, 2 x salaries, maybe 1 or 2 x debits (to CCs) scores far better than2 x salaries vs 50, 60 debits through from the bank account. ATM withdrawals are obviously needed from time to time but things like fuel, shopping, and bills can all be made through your CC
[TW]Fox;17995327 said:Tell you what - take 2 people - one has never had any form of credit in his entire life. The other has had numerous cards and always pays the balance off in full. Both are the same age.
Let both apply for a new card and see who gets accepted with the higher limit
Why did you even come up with this, its not even relevant to what Lucero was saying.
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Actually credit rating is NOT improved by paying off your bill every month by direct debit!,what they want is someone who, granted doesn't default but who also has a balance outstanding so they are paying interest!.Think about it the people who lend you a mortgage will do it at a level where they are guaranteed to get the money back(by repossession if necessary)but they wan't people who don't 'fail completely' but who are occasionly in need of short term high interest borrowing ie taking a few months to pay back a purchase and making them a coupla hundred with no real risk!.If you can trust yourself...get one as the insurance on purchases is invaluable,if you can't don't.The credit rating thing will be helped far more by earning a high income and building up a large deposit.Good luck...It's mean out there!(oh and why are all your workmates encouraging you?...ask how much they all owe,I bet you'll be shocked! it's like when you give up fags-all of a sudden these people that never did before are falling over themselves to offer you one).With money play skint and save well it saves trouble and jealousy in the long run.
[TW]Fox;17995662 said:
Comparing someone with No credit ever, to someone with a credit history is ridiculous, although after Ive said you werent relevant to luceros, I did go back to read that he said it would have no impact on credit rating by paying in full..
which I now see where you are coming from lol
No, it's entirely relevent to the OP as he's currently had no credit ever, and is looking at getting his first credit card
People are getting confused between a credit rating and lending criteria (ie, lenders picking people they think will make the 'best' customers) I think?
If you want to know a little more about how credit is judged then purchase a copy of your report from one of the credit reference agencies and have a look for yourself. The main emphasis is on whether the account is in good standing or not, followed by the amount of available credit (having too much can prevent you from getting more, as well).
Paying a card off in full every month doesnt mean you have a zero balance - because by the time your payment for Month 1's bill reaches the account you've already begun spending in Month 2.
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[TW]Fox;17995717 said:No, it's entirely relevent to the OP as he's currently had no credit ever, and is looking at getting his first credit card
I was referring to your post
"Tell you what - take 2 people - one has never had any form of credit in his entire life. The other has had numerous cards and always pays the balance off in full. Both are the same age.
Let both apply for a new card and see who gets accepted with the higher limit"
Which seemed like a pointless statement to me. Its obvious who would get priority
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[TW]Fox;17995717 said:No, it's entirely relevent to the OP as he's currently had no credit ever, and is looking at getting his first credit card
People are getting confused between a credit rating and lending criteria (ie, lenders picking people they think will make the 'best' customers) I think?
If you want to know a little more about how credit is judged then purchase a copy of your report from one of the credit reference agencies and have a look for yourself. The main emphasis is on whether the account is in good standing or not, followed by the amount of available credit (having too much can prevent you from getting more, as well).
Oh and just a note that applying for a credit report will adversely affect your rating!(always-how much depends on how often it's done)...if done too often it looks like you've been applying for credit everywhere and they DON'T like this it makes them twitchy
Err that was exactly my point!