Credit Cards... Does it cost...

[cjt110]

...just to have one?

My credit rating is pants. I've never had any credit cards or loans in my life. As such, when I go to, for example, get a new mobile phone it tells me my credit rating is poor and I am rejected.

My husband said to apply for a credit card, get it and then cut it up as it will help me improve my credit rating. Applied for a capital one card - am activating online and it's asking me about setting up a direct debit. Surely if I have a card and don't use it, I don't need a direct debit because they won't charge me anything? Or am I being stupid?

Sorry! No advice but following as I'm in the same boat!

It's better to get a card, use it and clear it every month. doesnt have to be loads but it needs to be active

I dont think it will improve your credit rating much unless you use it. Martin Lewis says use it for something and then pay off in full. Have a direct debit set up to pay balance in full so you never miss a payment. Use it for a specific thing each month and just always make sure you have money in your account to pay the DD

I was so cross Anon I was unfortunate to be in the position that my car was fucked, beyond repair and I needed a new one. We have a good chunk of cash in the bank - a joint account - a mortgage which is always paid on time, plus bills etc. I didnt want us to dip into our savings so thought I'd get a small loan - £3k - to get a new car. I was rejected by pretty much everyone for poor credit score. The only things I've ever had credit for is car insurance and my mobile phone! It seemed that I was being punished for never having borrowed in my life and instead saving til we had money for things...

As long as you clear the balance every month it won’t cost you a penny and it will improve your credit rating.

It will only improve your credit score if you actually use it. You have to be seen to be using credit and then paying it back regularly and ideally in full each month over a period of time, this will boost your credit score as it shows you can borrow reasponsibly

The direct debit thing is just an option to pay the bill each month, if you don’t use the card then you won’t have anything to pay so nothing would be taken from you each month.

Fruitcorner But I don't want to use one.

Wildlingofthewest That makes more sense.

I don't want to use the fucking thing though :(

You need to do something if you want to improve your credit score...... why don’t you want to use it??

Wilding I think because I get confused enough as it is moving money around between my accounts... It means moving DD's and remembering to pay stuff.

Why do you feel you don't want to use one for something specific like petrol that you'd buy anyway and just set up a direct debit to pay off monthly in full?

You can't demonstrate safe handling of credit unless you use it, even on a very small scale.

If you don’t want to use it or cut it up and don’t use it, it will not do anything to your credit rating. Beware some cc companies charge a monthly or annual fee even if you don’t use them.

It's just common sense to have a credit card (as long as you're capable of budgeting of you don't feel you can trust yourself then get one and chop it) as you get better protection for purchases. I've always had a credit card and have it set up so that I pay the full amount off every month. TO be fair if I was on an extremely tight budget I would prefer to deal with cash mainly (I'd take it out for the week) but as long as you won't spend too much it costs nothing to have a credit card and boosts your credit rating.

It won't help your credit rating if you don't use it.

What I've done is get a credit card and buy only my fuel on it, but transfer the money that I spend on fuel to a separate account then pay it off in full when the bill comes in.

My husband has a credit card. We never buy anything unless we have the funds for it. The credit card is used for purchases like cars or holidays and always paid off in full immediately.

Can you pay off as soon as you use it?

Yes you can

Sorry, I sound really stupid dont i?

I have never had a credit card except one store card that I got to get the 10% discount, paid it off, and never used it again. I've never had any problems getting a mortgage etc.

why don't you want to use it?

use it for your food shop and then pay it as soon as you get home.
it wont cost you anything - you only incur interest when you don't pay it off by the end of the month.

I didnt have any issue getting my mortgage, mobile phones or car insurance til this year.

Just use it to buy petrol or groceries once a mo th then pay it off straight away.

As advised, if you don’t use it then your credit history won’t get any better. You need to prove that you can USE credit responsibly.

At first you will prob need to go with a sub par lender, like aqua. The interest rates are very high, but as long as you pay the bill in full each month you won’t have to pay any interest.

You don't sound stupid, it's sensible to find out as much information as you can if you're unsure.

I use mine to pay for petrol and have it set up to pay the full amount by DD on 16th of every month.

Don't pay off as soon as you use it - pointless. It will do nothing good for your score.

Clear the full balance every month, when you get the statement - but not in dribs and drabs.

What I would do - use it like a debit card, for everything. And every time you use it, transfer the exact same amount from your main account to a linked instant access saver. Then pay it off once a month.

I didnt have any issue getting my
mortgage, mobile phones or car insurance til this year.

Then you need to look at your credit history online and find out why.

PS ignore your “score” it doesn’t technically exist. It’s made up by the credit referencing agencies. No one sees it (inc lenders) apart from you.