Is 40% APR good?

platypus said:
Of course it's a high APR%. It's a credit card designed to help people with credit problems get a start on the ladder.

Which is why the limit on the card is £250. As with all credit cards, you should spend sensibly and pay off the card in full every month, and you won't have any problems.

This was the first credit card I ever had out of university as I had such a bad credit rating. A while on and it's still in use - I spend ~£5/month on it and pay the balance off in full every month, to carry on boosting my credit rating. It's helped me, along with other things of course, get to the point where I've now got a good platinum card with cash back (and sadly get loads of offers through the post).
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Paying off your card in full doesn't do as much good for your credit history as keeping a balance on the card, as you're only using the card like it's a debit card.

Keep the balance at £5 and paying off anything over that would be a better approach if you're purely after building your credit history, but it will cost you slightly more.
 
jas72 said:
That doesn't make sense.

You have a poor/no credit rating so they give you a card which could quickly get you into problems due to its high APR.

:rolleyes:
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Of course it makes sense, because they want you to get into debt. It's how they make their money. Same for any type of loan (which is essentially what a credit card is).

Which is why if you're sensible you'll be fine. But that goes for any credit card. APR% is irrelevant.

Dolph said:
Paying off your card in full doesn't do as much good for your credit history as keeping a balance on the card, as you're only using the card like it's a debit card.

Keep the balance at £5 and paying off anything over that would be a better approach if you're purely after building your credit history, but it will cost you slightly more.
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No I realise it doesn't do as much, but as my credit rating has gotten to a decent level now I'm happy with building it slowly. It's an easy way to add a little every month (it's helping according to my Experian profile) just by buying lunch with it one day and then paying off the balance by direct debit.
 
platypus said:
No I realise it doesn't do as much, but as my credit rating has gotten to a decent level now I'm happy with building it slowly. It's an easy way to add a little every month (it's helping according to my Experian profile) just by buying lunch with it one day and then paying off the balance by direct debit.
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Indeed, it's a good plan, it just depends how large an increase in your credit rating you're trying to achieve in the timeframe. I often see the "pay it off each month" approach discussed on here, but it's not the best approach if you just want to get your credit rating up. It also doesn't always help your credit profile with some companies who take profitability into account when offering cards.
 
Dolph said:
Indeed, it's a good plan, it just depends how large an increase in your credit rating you're trying to achieve in the timeframe. I often see the "pay it off each month" approach discussed on here, but it's not the best approach if you just want to get your credit rating up. It also doesn't always help your credit profile with some companies who take profitability into account when offering cards.
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Aye, I guess my initial post could have been misleading for someone after information on building a credit rating.

Only part paying off large balances with an APR of 40% though is not a good way to get credit though :p.
 
platypus said:
Aye, I guess my initial post could have been misleading for someone after information on building a credit rating.

Only part paying off large balances with an APR of 40% though is not a good way to get credit though :p.
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Hence why I said only leave a small one :) Leaving a large balance on there would be dumb, dumb, dumb.
 
/me checks credit rating.

***** Excellent. :D

This is exploitation by companies that rope poor people into credit only getting them further in debt because they cannot help themselves and must "buy more things"

Sure they have to take a portion of blame on themselves but these compnaies know most customers will be making minimum payments. They must be laughing all the way to the bank.

Scumbags. :rolleyes:
 
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