First Credit Cards
If you’re looking to apply for a credit card but have never had any form of credit before, it can be difficult to prove you’re responsible with money management. Lenders will look at your credit history to work out whether you’ll be able to repay what you’re borrowing – so if you haven’t got a record where do you begin?
That’s where first credit cards come in. Also known as starter credit cards or ‘credit building credit cards’, these cards are specifically designed for people who either have a poor credit history or none at all. The eligibility criteria tends to be a little more relaxed, although some do come with a higher rate of interest.
How to get your first credit card
When applying for your first credit card, your chances of being accepted not only depend on your personal circumstances, but also on the lender and the type of credit card you apply for. Some lenders won’t consider bad credit applicants, whilst some cards are only offered to people with good or excellent credit scores.
In terms of the application process, applying for a first credit card is simple and can be completed online. In general, you will usually be asked to provide the following:
- Your name
- Your address (if you haven't already, make sure to register on the electoral roll to improve your chances of acceptance)
- Your date of birth
- Your annual income
- Employment status / details
- Your current account details
- A valid email address / contact number
How does a credit card work?
Credit cards work by giving borrowers an agreed amount of money they can spend, which must then be repaid over a period of time, including interest. When you borrow on a credit card, you need to repay a minimum amount each month, or you’ll be charged additional fees. If you pay the credit card balance in full before you statement is produced each month, you’ll not be charged any interest.
A first time credit card is usually designed for people with little or no credit history, or those who have a lower credit score. These types of cards usually come with a low credit limit and a relatively high rate of interest but this differs dependent on an applicant’s income, employment status and other factors that are assessed by the lender.
The low credit limit is to help ensure your debt doesn’t become unmanageable. The high interest rate is to mitigate the added risk involved in lending to someone with a lower credit score or no credit history, who are considered more likely to pay late or miss payments completely.
First time getting credit?
When taking out credit for the first time, finding the best option is entirely dependent on your circumstances. With Express Check, you can discover whether or not you will be eligible before you apply, meaning it won’t affect your credit score unless you decide to take out a full application.
If you have a bad credit rating it could make applying for credit difficult. The Vanquis eligibility checker leaves no trace on your credit file though, it can also give you an instant decision online. We’ll take a few details from you before running a soft credit check on whether we can lend to you.
This initial decision isn’t a guarantee that we’ll lend to you, but offers an indication of whether it’s worth going ahead with a full application. If you proceed, we run a full credit check before making a final decision.
Before you apply for your first credit card
Before you apply for your first credit card, you need to make sure you fit the lender’s criteria.
In the case of a Vanquis first credit card, UK residents aged 18 or over can apply, provided they’re not legally restricted from obtaining credit (because of bankruptcy, for example) and don’t already hold a credit card issued by Vanquis.
Even if you meet the minimum requirements, this is no guarantee your application will be accepted. Some lenders might also require that you’re in full time employment and earning over a certain amount each year.
Check your credit score before you apply, as a limited credit history could put you in the ‘bad credit’ category. Some credit card providers refuse to lend to people with poor credit and a rejected application can affect your ability to obtain further credit.
What if I have bad credit?
If you have bad credit and need a credit card, it helps to try and improve your credit score before you run a search for your first credit card and complete an application. You can do this by making sure you’re on the electoral role, checking for errors on your credit file, and paying off any existing arrears or outstanding debts.
Having no credit history means lenders and credit reference agencies have no way of knowing how you handle credit, so it can also help to try and build your profile by taking on other forms of credit, such as a mobile phone contract.
What’s my credit score?
Each credit reference agency has different criteria, and so your credit score will vary from one to the next:
- Equifax scores from 0 (very poor) to 700 (excellent)
- Experian scores from 0 (very poor) and 999 (excellent)
- TransUnion scores from Rating 1 (very poor) to Rating 5 (excellent).
When you apply for credit, your lender runs a credit check with one of the three main credit reference agencies or sometimes all three to find out more about your credit history. This information is then reviewed and used, along with the details you provided in your application to give you a score based upon their own lending criteria.
This score is then used to decide whether or not to lend to you and what product you might be offered if you’re accepted. You might be able to get a high interest loan or a high interest credit card if they’ve given you a poor credit score, to account for the extra risk they’re taking by lending to you.
Different lenders have different ways of scoring, so rejection from one lender doesn’t necessarily mean you’ll be rejected by another.
If your application is accepted, it’s important you know how to use a credit card correctly, which means making repayments on time and keeping within your agreed limit, as misuse can damage your score and limit your chances of getting credit in the future.
Am I eligible?
To find out if you’re eligible for a Vanquis credit card, you’ll need to apply online via our Express Check service. But before you apply, you’ll need to make sure all of the following apply to you and your current circumstances:
- You are at least 18 years old
- You are a UK resident
- You are not be legally restricted from obtaining credit e.g. because of bankruptcy
- ou don’t already hold a credit card with Vanquis Bank
Vanquis Credit Card
Vanquis is a high interest credit card provider, with annual interest rates that generally range from 39.9% APR (variable) to 69.9% APR (variable) depending on individual circumstances.
You should also bear in mind that credit cards are not suitable for long-term borrowing or financing existing debt, and that missing payments could have negative consequences and make obtaining credit in the future more difficult.
To build your credit rating and be considered for credit limit increases, stay within your credit limit and pay at least your minimum monthly payment on time. Make sure any other borrowing, including credit cards, loans, catalogues, mobile phone and mortgage, is kept in order and that you don't take on too much debt elsewhere.
What to Consider:
When applying for your first credit card, you need to consider the following:
Representative APR is the lowest APR that particular lender will offer to 51% of people who are accepted. The other 49% of applications that are accepted are likely to be offered a higher APR - we all have different credit profiles, which means not everyone is offered the same APR when they borrow money.
A Vanquis Bank credit card has a representative APR of 39.9% (variable), but rates vary according to your circumstances.
The credit limit is the maximum amount you can borrow on your credit card. Your first credit card limit is likely to be relatively low. The minimum first credit card limit on a Vanquis card, for example, is £100, with a maximum of £1,500 (subject to status).
If you make your repayments on time each month, your lender may increase your credit limit. You should try to avoid getting close to your credit limit, as this can have a negative impact on your credit score.
This is the lowest amount you have to pay back every month to avoid late fees and charges. It will vary according to how much you currently owe on your card and your annual interest rate
Fees & Charges
All credit cards come with certain fees and charges, from monthly and annual interest charges to late repayment fees.
Fees and charges also vary depending upon how and when you use your card. Using your card abroad, for instance, triggers additional fees and interest, as does withdrawing money on your credit card.
Look here for a summary of Vanquis credit card fees and charges.
The Vanquis refer a friend program allows Vanquis customers to refer friends and family to the Vanquis Credit Card. Each recommendation that becomes a Vanquis Cardholder that activates and spends on their card will see both you and your friend credited with £25 to your Vanquis accounts.
How to apply
The simplest way to apply for a Vanquis credit card is to go and use our Eligibility Checker – you’ll get an instant decision on your eligibility, with no trace of a search left on your credit file