Credit card yay or nay?

[GATESHEAD MOB]

Cut a long story short after numerous attempts at getting access to a credit card when i was working (have now been laid off ), I was declined due to the fact my Bank still had my account showing as a child account (i'm 20 ) all that has been sorted now though, yesterday the bank phoned up and offered me a credit card with a 2K limit even though i told them i'm out of work at the moment due to job loss.

They said " that's not a problem as i have banked with them since the age of 10" and have kept my account in good standing order never going over etc

I have declined as they turned down my application numerous times when i was working and needed a car to get to my job (because of an error on their part) and also as it would be foolish to have access to money which i would be unable to pay back until i'm back in work which hopefully is not long.

When i declined the credit card , they then offered me an overdraft limit of £500, are these guys trying to turn the economy around are trying to make it worse?

declined the overdraft aswell

My other thought is will this go against me when i am finally working /settled and want my own home will i be able to get a mortgage etc or have i shot myself in the foot

[Iccz]

I'm with the Abbey and i've had to ask for my overdraft to be removed twice, they have removed it by request in the past then for some reason thought it would be a good idea to give me it back without asking or telling me...

I've told them now that if they do it again I will be banking with someone else, it's crazy how they don't seem to pay attention or care about the customer, all they want to do is dish out credit cards and overdrafts.

I'm 23 and i've never had a credit card and i've had the overdrafts but never used them.
I've also been wondering like you if this will have any kind of impact on chances of lending when it comes to getting a mortgage, the only loan i've ever had was car finance.

I'm tempted to get a credit card to use for large payments for the added security, but i've heard lately that there isn't overly much more secuirty on a CC than on a Debit Card, not sure how true this is though...

But i'm in a similar position to you, wondering wether it'll do the credit score any good/harm etc

I still have my child savings account with a Building Society, it's still got a nice interest rate, i've not touched any of the money in there since I was 14 or 15 either, just incase they realise that i've been getting a different interest rate than what I should be...

[Earthworm Jim]

Lenders generally like to see 2 types of credit agreement or at least some sort of credit history when applying for a mortgage as it shows them that you are then capbale of being in debt and being able to manage it.

Usually they like a credit card and a small loan or a student loan.

[PoochJD]

Hi,

Originally Posted by Iccz

I'm 23 and i've never had a credit card and i've had the overdrafts but never used them. I've also been wondering like you if this will have any kind of impact on chances of lending when it comes to getting a mortgage, the only loan i've ever had was car finance. I'm tempted to get a credit card to use for large payments for the added security, but i've heard lately that there isn't overly much more secuirty on a CC than on a Debit Card, not sure how true this is though...

As far as I am aware, being offered credit in any form, and declining it, should not affect your Credit Status or rating one bit in a negative sense. If anything, I'd like to think it would help you, because you declined it at a time when you decided you didn't need it, or if you had had access to it, that it would have caused more problems. In other words, you have shown yourself to be "good with money"!

As for added security on Credit Cards (CC) over Debit Cards (DC), the only major difference is if you use a CC to buy an expensive item (usually over £500, sometimes over £200 - depends on the card company themselves), then if you either get a problem with the company, or the item itself, you can usually claim the cost back from the card company. Useful, for when you buy things like furniture, expensive AV equipment, or on the Internet and company goes tits-up. DC's don't have this facility or option, and hence are no more secure than a wad of cash left in the street... unless you can prove the DC was used fraudulently.


Pooch

[dazza74]

Have to admit I'm currently very greatful that my credit card company insisted on putting my credit card limit up during the good times, means I have funds to keep my business a float and I can concentrate on building up cash to cover utility bills which can't be deferred. None of us know what's around the corner I think having the backup of a credit card or overdraft doesn't do any harm as long as your disciplined.

[Iccz]

Originally Posted by jimthelegend

Lenders generally like to see 2 types of credit agreement or at least some sort of credit history when applying for a mortgage as it shows them that you are then capbale of being in debt and being able to manage it.

Usually they like a credit card and a small loan or a student loan.

Surely someone who has managed to live their life without the need for credit shows that they have either a good income, good money management, or a general low spending.

I don't understand lenders' logic really, I can understand it to a degree but i've never had the need for credit in all honesty, the only reason I took out the loan was because of a good rate over a period of time which suited me, I could have saved up for the whole lump at once but figured having something like that for my credit rating would be of use in the future, turns out it was probably a good choice, but it's the only one piece I have, i'll probably get a card soon and rarely use it, paying it off at the end of each month etc, that way I should reach their criteria.

I think its wrong how to borrow money for a house you're encouraged to use other methods of credit to prove your worth.


Also regarding what Pooch said:

I heard that Debit Cards do offer Charge Backs?
I found this a while back:
http://whatconsumer.co.uk/visa-debit-chargeback/

Is this different?
Surely it's not just fraud?

[Indecisive Jay]

Try and avoid any type of credit cards, overdrafts, loans.

If I don't have it I don't buy it.

[Iccz]

Originally Posted by Indecisive Jay

Try and avoid any type of credit cards, overdrafts, loans.

If I don't have it I don't buy it.

That's the kind of mindset I had, until I realised i'm going to want a mortgage at some point, I can't see myself saving up the money to get a house anytime soon...

[PoochJD]

Hi Iccz,

Originally Posted by Iccz

Also regarding what Pooch said:

I heard that Debit Cards do offer Charge Backs?
I found this a while back:
Visa Debit Chargeback - The Facts | Consumer Information

Is this different?

That's pretty much what I meant. Basically, Charge-Backs can be done on both CC's and DC's, though with DC's it's much rarer, whereas for CC's it's almost a given that you can claim back from the card company straight off.

Clearly, however, it appears from the website link shown above, that not all banks will offer the Chargeback service at first, unless you push for it, and also, that it only applies to Visa Debit Cards, not Mastercard Debit Cards.

Your best, is to always check your card (debit or credit) with the card company, and see what the card rules/regulations state about insurance, charge-backs and refunds.


Pooch

[Kebabhead]

Originally Posted by H3AD_SH0TZ

yesterday the bank phoned up and offered me a credit card with a 2K limit even though i told them i'm out of work at the moment due to job loss.

Thats just an initial offer, you haven't been accepted.

It's only when you go through the actual process application process where they will assess you will you find out whether they will accept/decline

[smallclanger]

We also only spend what we have, the house being an exception, but we didn't stupidly over extend ourselves on that and the amount left is coming down a along with the term each time we re-mortgage.

[GATESHEAD MOB]

Posty has just arrived along with a credit card application form from Vanquis Bank

The reason i was unable to apply for a credit card was as stated as my account was still a child account for some unknown reason , I've been working since leaving school time and since 18 tried to get overdrafts etc from Natwest (who i bank with and was declined ), when i went in to speak to the manager as to why as my credit rating has no blemish on it and i met the requirements for credit , the Manager was the one who checked on my account and say's i'm not sure how this is possible and asked to see my birth certificate , drivers licence to confirm my age , according to him i was still stuck on the Age of 16 on their systems ,

so if your getting knocked back for credit etc see your bank manager there could be a problem with your account , suprised customer service never flagged it up in the 2 years of applications though

[Earthworm Jim]

Originally Posted by Iccz

Surely someone who has managed to live their life without the need for credit shows that they have either a good income, good money management, or a general low spending.

I don't understand lenders' logic really, I can understand it to a degree but i've never had the need for credit in all honesty, the only reason I took out the loan was because of a good rate over a period of time which suited me, I could have saved up for the whole lump at once but figured having something like that for my credit rating would be of use in the future, turns out it was probably a good choice, but it's the only one piece I have, i'll probably get a card soon and rarely use it, paying it off at the end of each month etc, that way I should reach their criteria.

I think its wrong how to borrow money for a house you're encouraged to use other methods of credit to prove your worth.


Also regarding what Pooch said:

I heard that Debit Cards do offer Charge Backs?
I found this a while back:
Visa Debit Chargeback - The Facts | Consumer Information

Is this different?
Surely it's not just fraud?

Not to sure how there logic works but when I looked into the housing market last year the mortgage advisor I spoke to told me that the lenders like to see at least some form of credit history being a loan and a credit card, could be a car loan or a student loan.

Apparently never having credit before counts as bad credit

[GATESHEAD MOB]

Originally Posted by Kebabhead

Thats just an initial offer, you haven't been accepted.

It's only when you go through the actual process application process where they will assess you will you find out whether they will accept/decline

Nope they said i had it if i wanted it , due to my account standing , probs because i have a couple of quid in their from being laid off

[Iccz]

Originally Posted by H3AD_SH0TZ

Posty has just arrived along with a credit card application form from Vanquis Bank

The reason i was unable to apply for a credit card was as stated as my account was still a child account for some unknown reason , I've been working since leaving school time and since 18 tried to get overdrafts etc from Natwest (who i bank with and was declined ), when i went in to speak to the manager as to why as my credit rating has no blemish on it and i met the requirements for credit , the Manager was the one who checked on my account and say's i'm not sure how this is possible and asked to see my birth certificate , drivers licence to confirm my age , according to him i was still stuck on the Age of 16 on their systems ,

so if your getting knocked back for credit etc see your bank manager there could be a problem with your account , suprised customer service never flagged it up in the 2 years of applications though

Sadly the bank managers these days dont have the power they used to, when I got finance for my car I was trying to get a loan with my bank, even went in and spoke to the manage, he said they couldn't do it the same day as they have to go through people higher up.

I went to the dealership where I got my car, spoke to the chap there and he sorted the finance out at a better rate than my bank and the same day.


It's funny how banks etc always blame their systems... anyone who works with computers will know that most of these "system" errors are usually because of user mistakes.

Originally Posted by jimthelegend

Not to sure how there logic works but when I looked into the housing market last year the mortgage advisor I spoke to told me that the lenders like to see at least some form of credit history being a loan and a credit card, could be a car loan or a student loan.

Apparently never having credit before counts as bad credit

My Dad told me the same thing which is why I got the finance for my car, he used to be an independant mortgage advisor so I just took his word on it. It makes little sense really but that's how it is.