credit cards

[Josh111]

does getting a credit card (assuming your credit rating allows it), improve your credit rating or damage it?

[Ethel]

It improves it as it shows you can manage debt and money - you have a track record lenders can refer to.

However, you may have problems if you have many credit cards that add up to a huge borrowing limit, even if they are at zero balance.

So, if you take out new cards regularly to get the promotional offers, be sure to cancel a card or two to keep your available borrowing limit down.

[Josh111]

Ethel,

Thank you. I am planning on getting a credit card (if this is possible I dont know- post-student days my credit rating is poor!) but only for emergency usage. So even if it stays unused, it will improve credit, is my understanding correct?

[Ethel]

Yes, but use it now again for small amounts, and pay it off in full each month.

I don't know your circumstances but find a card that's advantageous to you. For example, I have to buy food, household goods, clothes, petrol..... I use a Tesco credit card for everything I possibly can - and pay it off in full so it costs me not a penny.
But I do get points just for using the card and get vouchers quarterly.

Other cards offer discounts (cashback) with certain retailers. Do your homework and you could save money.

You can check your balance online, so you can be sure you can pay it in full.

But to answer your original question - yes, it proves you won't go mad and get in to a lot of debt you can't pay off.

[Josh111]

Thank you, Ethel!

As ever, you were a great help!