A simples guide

First credit card

So you’re looking at getting your first credit card. This could mean exciting times ahead. We wouldn’t blame you however, if you found the whole thing rather daunting too.

With so many companies advertising various different credit cards which do different things, there’s no wonder you might be left feeling a little bewildered and not knowing where to start. Then there’s understanding the application process, and the fear of rejection.


Well fear not. We’re here to de-mystify the whole ugly thing for you and hopefully make your application for your first credit card a little less stressful.

Before we go any further, let’s have a quick discussion about credit scores, as they’ll become relevant later.

 

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Credit Scores

Whether we like it or not, we all have a credit score/rating. Essentially, details about our credit history, that is, our borrowing and repayments of debt, are collected and then converted into a single score. This is known as a credit score. The majority of lenders and credit card companies use these credit scores to determine whether the borrower is a high or low risk.

To check what your current credit score is you can visit one of the following three most popular providers: Experian, Equifax and Noddle.

Why do you need a credit card?

Let’s be clear, you may not need a credit card but it can be handy for a number of reasons, so let’s take a look at how...

 

To buy things

 

Yes, stating the obvious perhaps. However, did you know that by making purchases on a credit card and using this as your day to day payment method you could gain more protection as a consumer than other alternative payment methods?

So let’s get a bit more technical now. Purchases of between £100 and £30,000 are protected under Section 75 of the Consumer Credit Act. This protection was further increased to £60,260 under the more recent Consumer Credit Directive. This means that if you purchase an item on your credit card which turns out to be faulty, or the company goes bust before you receive your goods, you should be able to claim a refund from your credit card provider.

 

credit card
credit card

Spreading the cost

A big advantage of purchasing via a credit card is that you don’t have to pay for the items in one go. You’re able to spread those repayments over a period of time. Be careful though, you will be charged interest on the outstanding amount and this can become expensive if you are not careful.

There are credit cards available that offer 0% on purchases and/or 0% on any outstanding debts transferred from other credit cards. Before you get too excited however, these are usually reserved for customers with good credit histories.

Build credit history

As strange as it may sound, having a credit card can, over time help improve your credit score. Whether that is the case, depends on how you use your card. If you build slowly, meet all repayments and repay outstanding debts on time, your score is likely to improve.

Obviously the opposite is true if you start missing payments, so make sure you always pay off at the very least the minimum payment each month.

 

How do you choose and apply for a credit card?

With so much choice available it can be hard to know where to start. That’s where we can certainly help. Our comparison site is helpfully organised to show you a great selection of the deals that are available. Simply compare today to find out more. (Link)

There are choices of:

- Standard cards

- 0% interest on purchases cards

- 0% balance transfer cards

- Rewards cards

- Cashback cards

- Credit History building cards

There are three ways to apply for a credit card:

 - Online – you fill in a form over the internet. You’ll then be sent some paperwork to sign.

By post – you fill in the paper form and sign.

In branch – If you visit the bank, someone there can help you with the application.

 

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How long does it take to get your credit card?

Times can vary depending on which application route you take, but as a general rule between 10 and 14 days is normal. Obviously if you’ve applied by post this is likely to be the slowest route as you’re also allowing for postal times.

With standard credit card applications you’ll be asked a series of questions about your personal details and circumstances. This information is then reviewed by the credit card provider.

If you are applying on line with instant decision credit card applications, you may receive a decision via the credit card company’s website within minutes.

During an instant decision, your details are checked automatically. This will include:

- Your identity validation

- Your credit score

- Fraud checks

By doing these checks automatically you will save a few days on the time it takes to physically receive your card.

Can I get a credit card if I have no credit history?

As you’ve seen above, your credit score is an important part of the decision to grant you a first credit card. Fortunately it’s not the only aspect, otherwise nobody would ever have been granted a card!

Unfortunately, it does mean that some of the best deals might not be available to you if this is your first card. Credit history building cards however, are specifically designed for people with low or poor credit scores. Such a card may be the place to start. It will usually come with a lower credit limit to start with until you prove your repayment reliability. It may also attract a higher standard interest rate than other cards, but if you pay off your balance each month, that won’t matter.

Alternatively, if you’ve had a bank account for a period of time, you could talk to your bank to see if they have any options available. After all, they’re already familiar with your financial situation.

Start a credit card comparison today and we’ll do all the leg work for you and provide you with a list of options to suit your needs. All you need to do is choose which one is right for you.

 

Can I get a credit card if I have no credit history?

As you’ve seen above, your credit score is an important part of the decision to grant you a first credit card. Fortunately it’s not the only aspect, otherwise nobody would ever have been granted a card!

Unfortunately, it does mean that some of the best deals might not be available to you if this is your first card. Credit history building cards however, are specifically designed for people with low or poor credit scores. Such a card may be the place to start. It will usually come with a lower credit limit to start with until you prove your repayment reliability. It may also attract a higher standard interest rate than other cards, but if you pay off your balance each month, that won’t matter.

Alternatively, if you’ve had a bank account for a period of time, you could talk to your bank to see if they have any options available. After all, they’re already familiar with your financial situation.

Start a credit card comparison today and we’ll do all the leg work for you and provide you with a list of options to suit your needs. All you need to do is choose which one is right for you.