This is how the different generations are using credit

AS we go through the different stages of life we use credit in different ways.

From boosting our credit ratings, to help with budgeting, to making the most of rewards and perks – but what can we learn from the different generations?

Our Card Smart series, in association with Barclaycard, helps you work out how to make the most of your credit card – and in this edition we’re talking credit building, rewards, and budgeting.

First steps to credit building

Whether you’re looking to get on the property ladder, or a younger person making their start in the world of credit, then you could be looking for help to boost your credit rating.

Your credit rating shows how well you’ve managed your borrowings– and if you’re new to credit, or you’ve made some mistakes in the past, then you could have a low rating.
Your credit rating is really important – it can help you get accepted for a mortgages, loans and credit cards.

But it can be confusing – and if you've got a low score then you'll struggle to get the best rates.

If you’re looking to build your score, then a credit card could help – but only if you use it responsibly.

You will need to make sure you…

  • Always make your payments on time. Late and missed payments can have an adverse effect on your rating
  • Try to clear your balance in full each month, or pay more than the minimum amount. Not only will this show lenders that you’re a responsible borrower, you could pay less interest and clear your credit card balance sooner too.  
  • Always stay within your credit limit and keep your balance to a minimum. This will show that you aren’t dependent on credit and will help you avoid accumulating unmanageable debt.

Many credit card providers will offer free alerts to help you keep an eye on your spending. For example Barclaycard offer free text or email alerts to remind you when your bill is due or balance limit alerts – to help set personal spending limits.

For more ways to help build your credit score, visit the Barclaycard hub.

Budgeting for a family

Times have been tough for many of us over the past few months, and budgeting has become more important than ever, including for those with families to look after.

As we’re now well aware, we can’t predict the future, but a credit card could give you the flexibility to prepare for the unexpected.

For example, choosing a credit card with an interest-free period could give you more time to pay for those unexpected purchases. You just need to make sure, before you make the purchase, that you can confidently afford to pay off the balance in full before the interest-free purchase period is over, or else you’ll end up paying more with interest.

If you already have a credit card and you’re trying to manage your budget and repayments affordably, there are free online tools to help, such as the Barclaycard Repayment Calculator.. By paying more than the minimum payment, you could pay less interest and clear your balance much sooner.

Learn more about budgeting and managing your card here.

Make the most of your credit card

For many people, a credit card can be used as a great tool for protecting purchases, and depending on the type of card, some may also offer rewards.

Using a credit card for larger purchases or shopping online, can give you extra peace of mind if something goes wrong.

When you use a credit card to make purchases, you’ll get the added protection of Section 75 of the Consumer Credit Act 1974.*

So if you make a purchase between £100-£30,000 and your goods are proven to be faulty, not delivered, you were given misleading information or the supplier breaches their contract with you, you could be entitled to compensation or a refund

When it comes to rewards, if you’ve managed to build up a good credit score, you are more likely to find a credit card that meets your needs. Rewards can include many things, like cashback on your everyday purchases..

To find out more, visit the Barclaycard Get Credit Confident Hub.

 

 

 

 

 

 

 

 

 

 

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