If you’ve never really used credit then you'll have a thin credit history, which can make it hard to get accepted when you do apply for the first time.
One way of tackling this is to take out a credit card designed for people with a thin credit history. If you use the card carefully, you will build you a credit history that will help demonstrate to potential future lenders that you can manage credit responsibly.
On the other hand, you might just want to apply for a credit card to make spending a bit more flexible. A credit card could help you to afford things you can’t afford to pay for outright – so let’s take a look at what you should think about when you’re looking for your first credit card.
What to consider
Without any history of borrowing, you may struggle to get accepted for some credit cards, especially those that offer higher credit limits. However, a lower credit limit will probably be more appropriate to your situation anyway. When you’ve never borrowed before, suddenly having access to a large amount of credit can be tempting and you might find it difficult to avoid spending more than you can afford to pay back. Instead, it’s a good idea to start with a credit card that won’t let you borrow a large amount of money at once. That way, you’ll be able to get used to the idea of borrowing money – and paying it back on time.
Before you apply for your first credit card, it’s a good idea to check whether you’re likely to be accepted or not. This is because any application you make for credit appears on your credit history, and if you make a lot of applications in a short space of time, this can put lenders off as you may appear desperate for credit. One way you can check if you’ll be accepted is with Money Saving Expert’s credit card eligibility calculator. This only does a ‘soft search’ on your credit record, which isn’t visible to potential lenders.
You might want to consider the Ocean Credit Card (representative APR 39.9%) if you’re looking for your first credit card. Your initial credit limit is likely to be just a few hundred £s, but if you use the card responsibly – borrowing within the credit limit and paying back at least the minimum payment each month - you may be able to build it up to a maximum of £1,500.
The Ocean Credit Card will also help to build your credit history, as long as you make your minimum repayment on time every month and stay within your credit limit. This could help to show lenders that you’re able to borrow money and pay it back on time, but you should always make sure you don’t take out more credit than you can afford to repay. If you don’t keep up with repayments, your credit history could be affected for up to six years, so it’s important to make sure that you manage credit responsibly.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.