Getting your first credit card

Your first credit card

If you plan to apply for a credit card but you haven’t had any credit before, it can be difficult to prove that you can manage your money well. Responsible lenders will often look at your credit history to work out whether you’re likely to be able to pay back the money you want to borrow. Without a credit history, those lenders might see you as a high-risk borrower.

Some credit cards are specifically designed for people who have little or no credit history, or even a poor credit history. These cards are also called starter cards or credit building credit cards. These cards can be slightly easier to sign up for if you have a poor or limited credit history than standard credit cards. They do sometimes come with a higher rate of interest and lower credit limits, so this is something to bear in mind.

How to get your first credit card

When you apply for your first credit card, your chances of being accepted often depend on your personal situation, the type of card you want, and the lender you’re applying to. Some lenders won’t give cards to people with a bad credit history as some cards are only available to people with good credit scores.

The process of applying for a first credit card is designed to be straightforward, and you can often do it online. Usually, you’ll need to provide the following information:

•  Your name
•  Your address (if you haven’t done so already, you might want to think about signing up to the electoral register to improve your chance of being accepted)
•  Your date of birth
•  Your annual income
•  Employment status / details
•  Your current account details
•  A valid email address / contact number

Common credit card types

Although most credit cards do the same thing, there are many types of cards that have different functions and are used for different purposes.

Some of the most common credit card types are:

Credit building credit cards

These types of cards are designed to help those with no credit history, or a poor credit score, improve it over time with responsible usage such as paying on time and not going over your credit limit.

The criteria for accessing this type of credit card are often less strict, though you might find they have higher interest rates and lower credit limits. This can help banks reduce the risk of lost capital for potentially high-risk borrowers.

The Vanquis Credit Builder Credit Card falls into this category.

Rewards cards

Rewards credit cards offer rewards when you use the card to make a purchase. This often means spending at certain establishments or buying certain products.

Depending on the card provider, you can receive cashback, vouchers or points as a reward for using the card. However, it’s important to be mindful of your spending and not abuse your credit for the rewards.

Money transfer cards

Money transfer cards let you move money from a credit card to an existing current account. They are often used to cover a transaction when paying by card isn’t an option. You then make payments towards your borrowing, like you would any other credit card. In addition to the money transfer feature, these cards can usually be used as normal credit cards too.

Balance transfer cards

Balance transfer cards allow you to consolidate your credit card spending on to one credit card. This could help you keep track of what you owe and make keeping on top of your payments that little bit more manageable. Once you have transferred your outstanding balances onto the card you can usually use it as you would any other credit card.

Travel credit cards

Similar to a rewards card, travel credit cards let you earn points towards travel expenses as you spend, letting you build up points for a trip away while saving you some money.

However, it’s important to not overspend on these cards, as poor credit management could leave you in a difficult financial situation with mounting debt and fees.

How first-time credit cards work

Credit cards give borrowers an agreed amount of money to spend which the borrower must then repay over a period, often including added interest. When you borrow on a credit card, you need to repay at least your minimum amount each month or you’re charged interest on any existing balance that rolls over into the next month. If you pay your statement balance in full, on or before the due date shown, you won’t be charged any interest on your balance. Note that different types of transaction, such as balance transfers and cash transactions, might involve different rules, so consider double checking what type of transaction you’re making.

A first-time credit card is usually designed for people with little or no credit history, or borrowers who have a lower credit score. These cards usually come with a lower credit limit and a higher rate of interest, but this often depends on your income, your employment situation, and other factors that the lender will assess.

The low credit limit is to help you keep your debt small and manageable. The high interest rate helps to compensate the lender for the extra risk of lending to someone with a lower credit score, or no credit history. That’s because these borrowers may be more likely to pay late or miss payments completely.

Your first time getting credit

If you’re taking out credit for the first time, finding the best option depends on your situation. With an eligibility checker, you can check whether you’re eligible for a card before you apply. This can be important because every application you make could affect your credit score, which might make it harder to get a card.

The Vanquis eligibility checker uses what’s called a ‘soft search’. It can give you an online decision in minutes, whilst having no negative impact on your credit file. We’ll take a few details from you, then we’ll carry out the ‘soft’ credit check to find out whether you’d be able to get a credit card from us.

This initial decision isn’t a guarantee that you’ll be able to get a credit card, but it does offer a good indication of whether you could go ahead with a full application. If you do decide to apply, we’ll carry out a full ‘hard’ credit check before we make a final decision.

Don’t forget that good lenders are there to help you, and you should always ask them if there’s something you don’t understand.

How to choose your first credit card

When you apply for your first credit card, it’s important to think about the following key things.

Representative APR

APR stands for Annual Percentage Rate, and Representative APR is the APR that a lender will offer to at least 51% of people who are accepted for that product. Different people are offered a different APR because their personal situations and credit scores are different. A Vanquis Credit Builder Credit Card has a representative APR of 30.9% (variable), but rates vary according to your circumstances.

Credit limit

The credit limit is the maximum amount of money you can borrow on your credit card. To help you borrow without getting into difficulties, your first credit card limit is likely to be relatively low. On first credit cards from Vanquis, the limit could be anything from £500 to £1,200, and it will depend on your circumstances.

The good news is that your lender might increase your credit limit if you make repayments on time each month and become eligible for a credit limit increase. Avoid going over limit because this can damage your credit score.

Minimum payments

This is the lowest amount you must pay back every month to avoid having to pay late fees and charges. The minimum payment amount will depend on your card’s interest rate and how much you currently owe on it. You don’t pay a minimum payment if you don’t owe anything on your credit card.

Fees and charges

Some credit cards come with certain fees and charges, which may include monthly and annual interest charges or late repayment fees. Your card’s fees might also depend on how and when you use it. For example, you may need to pay additional fees and interest if you use your card abroad or to withdraw cash.

We’ve put together a helpful summary of all the charges and fees that could come with a credit card.

Rewards

Our Refer a Friend scheme lets Vanquis customers refer their family and friends for a Vanquis Credit Card. Every time someone you refer to us becomes a Vanquis cardholder, then activates and spends on their card, you and that person will be credited with £25 into your Vanquis accounts – subject to terms and conditions.

Who can apply for a first credit card?

Before you apply for your first credit card, you need to make sure you fit the lender’s criteria.

It’s worth keeping in mind that even if you meet the minimum requirements, this doesn’t guarantee your application will be accepted. Some lenders might also need you to be in full time employment and earning over a certain amount each year.

Consider checking your credit score before you apply, because even a limited credit history could put you in the ‘bad credit’ category. Some credit card providers won’t lend to people with a poor credit score, and a rejected application can damage your chance of getting further credit.

Why choose a Vanquis Credit Card?

At Vanquis, we’ve got a track record in helping people manage their own money.

We work hard to make sure that our credit cards are easy to apply for and simple to manage. You can view our Trustpilot reviews to see what our customers say about our excellent products and outstanding customer service.

Above all, we aim to be honest and responsible when it comes to our credit cards, and we only offer them to people who we think will be able to afford the repayments. That means you can choose us with confidence.

How to apply for your first credit card

The quickest and simplest way to apply for a Vanquis Credit Card is to spend 60 seconds completing our simple Eligibility Checker. You’ll get an instant decision about your eligibility, with no negative impact to your credit file.

When applying for your credit card, it might be worth considering the following tips:

Register on the electoral roll

Credit checks are used to protect against fraud, so being registered on the electoral roll is a simple way to prove you are who you say you are. Find out more at the UK Government website.

Check and correct any mistakes on your file

Your credit score can be wrongly affected if there are any mistakes on your credit file, such as a mistaken missed payment or an incorrect address. Check everything is up to date and fix any mistakes.

To correct a mistake on your credit file, get in touch with the relevant lender and Credit Reference Agency (CRA) to flag the error, and provide as much supporting evidence as possible.

Pay your bills on time and avoid missing a payment

To show lenders and credit reference agencies that you can manage credit responsibly, make sure you avoid missing a payment or make a payment late. You could improve your credit score by keeping up with phone contracts and any other bills for goods or services you pay for regularly.

Consider getting a credit building card

A credit building card, also known as a ‘bad credit credit card’, is designed for borrowers with a poor credit score or no credit history. When you get a credit card for bad credit, it might come with a low borrowing limit and a high interest rate. This is to make it easier for you to pay each month and avoid falling into debt.

Use 'soft searches' when you apply for new credit

Some lenders use a ‘soft search’ to give you an initial decision on whether you might be eligible for their credit card. A record of this ‘soft search’ is listed on your credit file for 12 months but other companies can’t see the record. This means it doesn’t affect your credit score.

A soft search isn’t a guarantee that a lender will lend to you, but it will give you a good idea about whether you could be successful if you carry on with the full application. If you do continue, your lender will perform a hard search. This is likely to affect your credit score even if your application is successful.

Remove incorrect or old defaults, County Court Judgments (CCJ) or bankruptcies

If you miss a payment, this will be noted on your credit file for six years. If you miss multiple payments and your account defaults, a default will also stay on your credit file for six years. The same applies for CCJs, Individual Voluntary Agreements (IVAs) and bankruptcies.

If your credit file shows any record of a default, CCJ, IVA, or bankruptcy after six years has passed, you may wish to check if it’s possible to remove these from your file. Read our guides on CCJs, IVAs, bankruptcy discharge, and improving credit scores to learn more about these processes.

Reduce your debt levels

Paying off existing debts can help lenders see that you’re managing your credit responsibly. Over-reliance on debt can damage your credit score, so it might be worth trying to limit your usage.

Tips for using your first credit card

When using your credit card for the first time, there a few things to consider when getting a feel for your new credit card.

Start with small manageable payments

To understand what it’s like to spend on a credit card and make your repayments, you could start with small transactions. This way you can get a feel for what it’s like to use the credit card while minimising the risk of overspending, making late payments or accruing interest.

Avoid late payments

When you do spend on the credit card, make sure it’s paid back on time to avoid additional charges.

Track your spending

When you spend, consider keeping track of how much you’ve spent, whether that’s using your banking app, reviewing your statements or keeping a personal log.

FAQs

What happens when I apply for a credit card?

When applying for a credit card, we recommend using our soft eligibility checker to get started. This lets you know, without harming your credit score, what credit limit and interest rate you can expect.

Once you’re happy and if we deem you eligible, we’ll then go ahead and perform a hard check on your credit file and make an offer.

The process goes as follows:

1. Check if you're eligible in minutes
2. We'll review and give an instant decision
3. Complete and submit your application
4. Once all the information has been confirmed, your card will be sent in the post 
5. Download the Vanquis Banking app and get started on your credit journey

What do I do if my application is rejected?

If your credit card application is rejected after a soft or hard check on your credit file, it doesn’t necessarily mean the end for your credit journey.

Banks, lenders or card providers may usher you towards a card that’s more suited to your needs or financial situation. This might mean recommending you a credit building credit card, that comes with a higher interest rate and lower credit limit, to help improve your credit score if you have a bad or no credit history.

There are also things you can do to build your own credit score. This includes not defaulting or missing your minimum monthly repayment on any forms of credit, consistently paying bills on time, and registering yourself on the electoral roll.

The Vanquis Credit Builder Credit Card could help you improve your credit score and potentially lead to being approved for other forms of credit with lower interest rates in the future, if managed responsibly.

How long does it take to get a credit card?

After you’ve undergone a soft or hard eligibility check, which can take just a few minutes, you can be approved for a credit card the very same day.

However, your physical card may take 7 to 10 working days to arrive before you can access the credit.