Considering getting a credit card

manic111

manic111

manic111

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I'm looking at getting myself a credit card. At present, I've only got one bank account (and therefore one debit card), meaning that if I'm ever in a situation in which I've lost my card, or it breaks, or gets declined, I'm a little screwed. In short, I'm after a credit card for emergencies only.

What should I be looking for in a CC? What terms are important? Is there anything really to bear in mind? I can't see myself ever using this card in a situation in which I can't pay it back at the end of the month - as said, it's only for emergencies.

Any thoughts? Are there any benefits to going with a card from Barclays, who I currently bank with anyway? Thanks.
 
Just pay off the full amount each month (i.e., never spend what you don't have) and it doesn't matter about the interest rate.

Also, credit cards are much safer than debit cards online.
 
Remember you ask for a lower limit than they give you. Say you get offered £1000 you can ask for it to be £500 etc. If you plan to pay off any purchases within the month anyway the interest rate is kind of moot, but lower is obviously more desirable

Edit: Snap ;)
 
Pho said:
Just pay off the full amount each month (i.e., never spend what you don't have) and it doesn't matter about the interest rate.

Also, credit cards are much safer than debit cards online.
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Yep, that's another consideration - if I'm thinking of buying from anywhere potentially dodgy, such as eBay, a CC will be another use for it.

Can somebody explain the "purchase rate" to me? I understand APR, but not PA...
 
Purchase rate is the rate which applies to purchases. Other things, like cash withdrawls or balance transfers, have different rates.

If you will never ever leave a balance on it, ignore the APR and pick the card with the best benefits. If you travel a lot, a Halifax Clarity has no fees for foreign use.
 
What you need to look for:

* APR
* Balance transfers
* Minimum payments
* Charges
* Add-ons?

Basically, most CCs will not allow you to take cash out or transfer balance without a hefty fee. Charges are genuinely - from experience - around £12 for any late-payment, etc. although some will charge more. Minimum payments tend to always either be £5 or 1% of the balance (whichever is greater).

With APR, the lower the better. You don't for example, want to get a card with 40% APR as opposed to one with 17.5% APR.

Add-ons with cards can be helpful, such as going abroad, etc.

Generally speaking, you have absolutely nothing to worry about if you always pay the card in full whenever you use it, as you'll have no APR to worry about, no charges, and your credit-rating won't be harmed.

Use a card stupidily i.e. using your CC like an overdraft facility, you will be stung, you'll be charged and your credit-rating will be shot. What's more, you may find yourself stuck in a debt-cycle only able to pay-off the minimum payment, accruing interest on the outstanding balance and ultimately paying back far more than what you originally borrowed. This is essentially, what the banks count on you doing. APR is in essence, set at a rate dependant on how much of a risk lending you the money is.

If you're a first-time borrower, or on low-earnings, you're likely to be stuck with a semi-reasonable APR. Whereas, if you've had problems in the past you'll end up with the worst APR and be stung hardest if things go awry. If you're a high earner, you'll get the best add-ons and greatest APR. Shop around though.

In regards to the Barclycard CC, IIRC you need to be earning >20k pa to qualify.
 
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I would suggest getting a credit card with travel benefits such as Halifax Clarity if you only want to use the card occasionally. Alternatively, a cashback or rewards card are great if you are happy to shift all of your purchases onto them. Amex Platinum Cashback, MBNA Amex or Tesco cards would suit that sort of usage well.

You can get an idea of which cards you're likely to be accepted for by using Money Supermarket's Smart Search tool.
 
Surprised nobody else has suggested it you but why not just get a Pay-as-you Go/Top-up Credit Card. If your only looking for one for emergencies get one and stick £100 on it, keep it in your wallet.
 
Windle said:
Surprised nobody else has suggested it you but why not just get a Pay-as-you Go/Top-up Credit Card. If your only looking for one for emergencies get one and stick £100 on it, keep it in your wallet.
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Don't they cost money to top up/buy? And they won't have any (good or bad) impact on ones credit rating. Personally I can only see a use for those unless any financial institution won't touch you with a barge pole, in which case a credit card should be the last thing on your list to do :confused:
 
One's credit rating isn't affected (in a bad way) if they meet at least the minimum payment each month. Am I right in thinking this?
 
Windle said:
Surprised nobody else has suggested it you but why not just get a Pay-as-you Go/Top-up Credit Card. If your only looking for one for emergencies get one and stick £100 on it, keep it in your wallet.
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What possible reason would you have to do that, what a strange suggestion.
 
Walk before you can run. There's no point advising the guy to get these rewards cards when on the little information provided means he might not be the most credit worthy applicant Amex see this year. Have you got any history of managing credit? pay monthly phone, store cards, home owner? If not I'd suggest looking through barlcays as they know how you mange your bank account at the moment.
Before applying I'd get your statutory report from the CRA's and everything is correct, make sure you're on the electoral roll and use the link above from Seft(but take with a huge touch of salt). Maybe even pop into Barclays as they may be able to tell you if you are automatically approved for one of their cards.
 
Okey dokey, I don't have a CC myself but I have always wondered this. Actually I could do with applying for a CC just for making online purchases.
 
mrmoose said:
A minimum payment marker left on your credit file for your other lenders to see, could be(is) seen as higher risk
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Or it's taken as an indication you are potentially a profitable customer - remember, customers who pay in full each month are worth less than those who don't - because you cant charge interest to the those who pay in full!
 
all depends on the circumstances. in my working role I can see a lot more than what the typical equixfax/experian 7.99 monthly subscription payer see's.
 
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