[Finance] Just got my 1st credit card in over 15 years

[Uh_huh_him]

And if you do end up with a large amount of emergency spending on a credit card that’s going to take a while to clear have a look around for balance transfer offers. They charge a fee but are then interest free for anything between 9-24 months. Just have a plan in place to clear the debt by the end of the interest free period.

Yeah this.

Ran up a few grand in loans and credit cards a couple of years ago, due to some planned and unplanned costs all hitting at a particularly expensive time.

Had to move the debt around a couple of times now.
Paying it off gradually, but can see a way out by the middle of next year.

 

[The Optimist]

Yeah this.

Ran up a few grand in loans and credit cards a couple of years ago, due to some planned and unplanned costs all hitting at a particularly expensive time.

Had to move the debt around a couple of times now.
Paying it off gradually, but can see a way out by the middle of next year.

Unless you have a low credit rating there should always be a better option than keeping debt on a credit card at the standard interest rate

 

[dazzer6666]

Unless you have a low credit rating there should always be a better option than keeping debt on a credit card.

Not really - there are loads on the market offering interest-free balance balance transfers, often for many months. You can shift it from card to card over time, paying nothing at all. Multiple applications over time can negatively impact your credit rating though.

 

[The Optimist]

Not really - there are loads on the market offering interest-free balance balance transfers, often for many months. You can shift it from card to card over time, paying nothing at all. Multiple applications over time can negatively impact your credit rating though.

Sorry I meant on a credit card at the standard interest rate.

My post before that was actually saying the same thing as you’re saying

 

[lost in london]

With the Amex BA platinum I get a free companion voucher once a year - several years in a row now I’ve used this for a business class, long haul flight (to go with another, booked using avios earned by the same card). Effectively a freebie worth £6-8kpa depending on where we fly.

I'm on one of those cards now, changed from a gold amex - is it easy enough to find the companion flights?

 

[dazzer6666]

I'm on one of those cards now, changed from a gold amex - is it easy enough to find the companion flights?

Same availability as using Avios (and the voucher is used to accompany an Avios booking) - premium/high demand routes (Sydney, Singapore etc) always difficult but there are plenty of other options. I’ve used it for Canada, Qatar and Ecuador the last 3 years, and previously used it for the Caribbean a few times. Places like New York are easy due to large number of flights.

You can also now use the voucher on a solo flight to cover 50% of the avios requirement.

 

[mrjon1976]

I think the advice of pay in full is the best advice.
In my youth, I racked up so much debt in the form of payday loans and credit cards. This caused me so many issues for many, many years - around 2-3 years ago (I am 49) I signed up to Clearscore to try and get a handle on my finances. During that time, I now have 3 credit cards (I only ever put little spends on them like coffee, petrol etc) and religiously pay them off in full each month. My credit score has gone from the 200s to the 600s and the feeling of having worked through it all is amazing - so it is no mean feat to do what you have done.

 

[Shropshire Seagull]

Some good advice here, with appropriate contradictions based on different attitudes to credit and how you trust yourself to spend.

But I read the key message in the OP as wanting to build up his credit score. This is different to how to purchase/repay with a cc.

I assume the desire to build up good credit is to either repair a previous bad debt event or prepare for a future application, a mortgage maybe?

Do, use the card regularly, buying only what you would have bought anyway, food shopping, car fuel, etc. Know your card limit and never allow your debt balance to exceed 50% of your limit. Pay off IN FULL every month (DD best if you dont want to be late).

Over time, your credit history will show you to be a responsible borrower. It is this that raises your credit score.

Credit cards are not for everyone, but if you are in control, they can be hugely advantageous. I currently have 5, 2 are 0% bal trf and I'm paying into a regular savings at 6% so they mature at the same time to pay off the balance.

Work the system if you know how, but be cautious if you can't trust yourself with someone else's money.

 

[RandyWanger]

Just arrived not had one for years and was too young too have it back then , anyway advice best way to use it too build up my credit score thanks

I use my AMEX for every day purchases and pay it off in full each month.

A lecturer once taught me to never use my own money for purchases, always use a credit card and clear it in full. I can't remember the rationale behind it, I was young and learning FinTech. I'm sure there's a good reason behind it.

 

[spence]

Just a capital one normal card

I have an aqua card which has terrible APR. I pay off the full balance every month. This is key. Got various increases to the limit added by the company. Finally got upgraded to the gold card version. I use it for virtually everything. I also have a few bank accounts. Every time I use my card I then transfer that money to an account for that credit card. I have it set up to pay by direct debit in full every month..
Open up a free credit score account to monitor your credit history.

 

[Arthur]

It may not be the case with building your score but for maintaining paying off in full is not the right advice.

I paid off all my debt (barring mortgage) and my credit score had it's biggest movement (15 points if I recall) in years but negatively. The credit agency told me the optimal use of credit is between 1% and 25% of the credit you have access to.

That may not be the case for everyone and I'm certainly not an expert but I was expecting my credit score to go up when I went debt free and not down!

 

[HangletonGull]

Thanks for the advice. So use it , don’t think of it as free money and pay it off in full every month

 

[dazzer6666]

I have an aqua card which has terrible APR. I pay off the full balance every month. This is key. Got various increases to the limit added by the company. Finally got upgraded to the gold card version. I use it for virtually everything. I also have a few bank accounts. Every time I use my card I then transfer that money to an account for that credit card. I have it set up to pay by direct debit in full every month..
Open up a free credit score account to monitor your credit history.

Most banking apps have a ‘check your credit score’ function too

 

[Uh_huh_him]

Unless you have a low credit rating there should always be a better option than keeping debt on a credit card at the standard interest rate

yeah - that's why I shifted it to a credit card with 0% interest and a 2.9% transfer fee for 29 mths.

Also got £44 cashback from Topcashback to offset some of the fees.

 

[Cotton Socks]

It is so, so easy to get into a mess when you have any kind of credit. Let's say for an example your washing machine breaks down, you don't have the money in your account for a new one at the time, so stick it on the credit card.
Will you have the money in your account next month to pay for it, as well as what you usually use the card for?
You have to be exceptionally disciplined.
I would suggest to also open an instant access savings account, stick £25 a month in, or whatever you can afford on a standing order, for a 'rainy day' fund & forget about it.
The credit card company will increase your limit, easier just to say no. There may well be valid reasons for people saying, don't pay in full every month, I disagree. You have a £200 limit & the interest won't seem like much but it adds up very quickly & then they put your limit up.
7 years ago I was in £12k of debt, from overdraft & credit cards. £3k overdraft that was just about to cost more than what was coming in, because I had a major change of circumstances & the banks were increasing the overdraft rates to 40%. I was paying minimum on the credit cards & was getting no where. I managed to get a loan for the overdraft at 11%, that's paid. My overdraft limit is £400 & I haven't touched it since the day I paid it off. I asked them to reduce it first to £1500 & now they've reduced it to £400 as I never use it.

My debt is now £3k & I've been 'card tarting' for a few years with 0% balance transfers & pay a lot more than the minimum. I think they calculate the minimum payment for 5% of the balance & whatever interest there is. I'm just about to 'card tart' again, I think they offer it to me so regularly as I do put small purchases on both the cards & their algorithm thinks I'm bound to need a new washing machine soon.

I am now the proud owner of 2 savings accounts. One is for Xmas, the other one is for potential white goods failures.

I hope that doesn't sound like a lecture, my eldest accuses me of it when we discuss money as I'm still banging on about the £200 overdraft facility he accepted 2 years ago & very rarely uses, I must check up on that actually!