Getting a UK credit card when you don’t have credit can be a great way to get your credit life in the right direction. However, there are some things that you are going to need to think about before you just take the plunge.
First and foremost, there are a lot of different cards out there. Since you probably don’t have credit already, getting a nice rewards card can be a good thing. However, you have to realize that many rewards cards are going to have a higher interest rate than their non-rewards counterparts.
This is also the case with cards that promise lifetime balance transfers. There’s going to be a fee associated with each balance transfer. You also want to make sure that there’s going to be a clear listing of what your interest rate is for the new debt on the card. Some cards actually put more interest on these balance transfers than anything else.
In addition, even if you do get a credit card, you want to make sure that you pay more than the minimum requirement every month. If you only get by on the minimum, the interest will simply wrack up higher and higher until you have a debt that’s very hard to repay. In addition, you also want to make sure that you don’t use your credit card to withdraw cash. This will only make for higher interest and a fee on top of the transaction.
The final caution that we would pass along here is that you want to make sure that you always pay on time, every time. If you have a credit card that lets you get 0% interest for a certain amount of time, you’ll find that offer revoked and a rather high interest rate attached to the card. It can also take months for you to qualify for a better interest rate. You would have to make sure that you pay on time for several months in order to even begin to think about negotiating for a better rate. This is the time to really start thinking about how you really want your credit life to appear. You don’t want to keep feeling like you can’t get good credit, only to finally get approved and then mess things up from the beginning.
If you mail in your money every month, make sure that you take extra time to get your payment in before the due date. This is the best way to ensure that your payment is on time. You have to calculate in time for the post to run, plus processing on the side of the credit card company.
There are some benefits to getting a good credit card. For starters, you will be able to be protected against fraud. If you put your bank account on the line with all of your purchases, then you’re going to have to go in and fight your bank to get the money back. This could take weeks — all the while, your expenses aren’t being taken care of the way you want. This is something that you really want to avoid if you can honestly help it.
If you already have a bit of credit, applying for more in a calculated manner is always a good thing. While it’s true that you can temporarily lower your score, we would argue that sometimes it’s worth it when you know that you can use the new credit line to strengthen your report as a whole.
So, should you go for UK credit cards or shy away from them? Well, as long as you’re willing to do your research online, we don’t think that credit cards are a bad thing at all. Of course, this assumes that you already manage money well. Credit is simply using someone else’s money and paying them back. If you cannot trust yourself to do this, then you definitely want to avoid taking on credit. If you don’t pay back your credit cards, you will be hurting your entire financial future. It’s a lot better to make sure that you really focus on taking care of yourself from every angle. Later down the line, you never know when you’re going to want to buy a house or even a car. These things take credit. If you show lenders that you cannot even handle a small credit card, they’re certainly not going to trust that you will be able to handle something as large as a house!
We have full faith that you will be able to manage your credit wisely. As long as you don’t max out all of your cards and you pay more than the minimum every month, there’s no reason to shy away from UK credit cards — check them out for yourself today!