Should I get a credit card? (Part 2)
In part 1 of our guide, we examined the advantages and features of a credit card, in part 2, we've taken a look at the disadvantages to help you make a balanced decision about applying for one.
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“if you make late credit card payments, or miss them altogether, this will show on your credit history...”
What are the disadvantages of credit cards?
Interest
As we’ve said, if you don’t clear your balance in full then you must pay interest on the outstanding amount each month. This can mean that even comparatively modest purchases could end up costing you hundreds, if not thousands, of pounds.
Charges
Most credit card companies will impose charges if you break the terms of your agreement with them - if you exceed your credit limit, miss a repayment or pay less than you should, for example. Typically the charge is £12 each time, but check with your provider.
Damage to your credit history
If you make late credit card payments, or miss them altogether, this will show on your credit history. Damaging your credit history in this way will make it harder to get credit in the future and may mean that you have to borrow at higher rates of interest. If you miss a number of payments, the credit card company may register a default against you or even take you to court to get a County Court Judgement against you.
Spend responsibly
The credit card company may give you a credit limit that’s more than you can safely afford to spend or repay. It is up to you to manage your own spending to ensure you can afford the repayments. Just because the card company has given you the credit limit, it doesn’t mean that you should spend up to it.
Can I get a credit card if I’ve got a bad credit history?
If you have a poor credit history you won’t qualify for all credit cards, but this doesn’t mean you won’t be able to apply for a credit card at all. In fact, some providers offer cards that can actually help you improve your credit rating. You’re usually offered a low initial credit limit, and then once you’ve demonstrated that you can use the card responsibly and make regular monthly payments, this limit could be increased. The Ocean credit card (representative APR 39.9%) is one option if you’re looking for a credit builder credit card.
However, bear in mind that cards designed for those with a poor credit history usually have higher APRs than cards for those who have never had problems borrowing, because these borrowers are considered a higher risk. This is why you should try to only borrow a small and manageable amount that you can afford to repay in full every month.
Know if you're accepted before you apply with QuickCheck
- Get credit - up to £1,500
- QuickCheck won’t affect your credit rating
- Get a fast response in 60 seconds
39.9% APR Representative (variable)
Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender