You may be wondering whether now is a good time to get yourself a credit card. Although it may seem like a daunting process, there are a number of reasons why applying for a credit card can do you and your credit score a lot of good.
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Improve your Credit Score
If you have a poor or limited credit history, which is likely if you’ve never had credit before, you may struggle to get some of the best credit deals. Don’t worry, however, as there are a number of providers out there who offer cards designed to build your credit rating, helping you to access better deals in the future.
You’re likely to be given a lower credit limit and high interest rate to start off with, so make sure you budget each month and pay your bill in full.
Stay Protected on Purchases
Did you know that if you use your credit card to pay in full or part for goods or services costing between £100 and £30,000, you get valuable protection under section 75 of the Consumer Credit Act? Don’t worry if your purchase falls under the £100 mark though, as you may still be able to put a claim in under the industry-agreed chargeback system.
Whether you’re purchasing a new sofa for your living space or upgrading your home gym equipment, paying for them on your credit card offers you a good level of protection should anything happen.
Earn Rewards when you Shop
Some credit providers offer incentives for you to spend with them, including cashback offers, rewards and special discounts. Things like cashback are only worth considering if you pay off your credit card bill in full each month – this is because if you don’t, the cost of interest will outweigh the rewards.
Rewards credit cards allow you to earn points or vouchers when you shop with certain retailers. Check which ones they are though as if you don’t usually shop with them, they’re not worth it. You may also get discounts with some credit cards, getting you money off retailers or even some services.
To get the most out of your credit card you’ll need to remember the importance of paying it off either in part or in full each month. Not meeting the minimum monthly payment or missing it completely, can have a detrimental effect on your credit score and stop you from getting credit in the future. If you’re unsure as to whether or not getting a credit card is for you, make sure you do your research, work out what you’ll be buying on it and make sure you budget each month to pay off the balance.
