If you are starting out on your career, then applying for a credit card may not be as easy as you think. This is where the Barclaycard Initial credit card may help.
Credit card companies want to see that you are a good risk when you apply to them for a credit card. After all they are lending money to you and therefore want to be as satisfied as possible that you will meet the monthly repayments and keep your account in good standing.
This means that these companies generally like to see a good credit history, verify that you have full time employment and, ideally, have tangible assets such as property. This paints a picture of you as a responsible person, someone who can be trusted with loaned money.
If you are just starting out, however, and have not built up a credit history, do not own a property and maybe don’t have high earnings at this point in your career, then how do you get a credit card?
The Barclaycard Initial credit card is designed for exactly this sort of person. You must have some credit history, which must be generally good, and must definitely not involve CCJ’s or show that you have been bankrupt or have taken out an IVA.
You must also be over 18 and earn more than £10,000 per year. To show a degree of stability, you must also be listed on the electoral roll at your current address.
These requirements don’t seem too onerous however there are two flies that may land in the ointment:
The first is the interest rate that is charged for the Barclaycard Initial credit card, if you don’t pay off your monthly statement in full. The interest rate is 29.9% APR Representative and is variable.
This is uncompetitive compared to more mainstream credit cards, which currently generally charge 16.9% representative APR, although the Nationwide credit card charges a competitive 15.9% representative APR.
The second is the fact that you will receive a low credit limit when you first receive the card. We feel that this makes good sense, as it can put the brakes on over exuberant spending and help the young user develop a well balanced approach to their personal finances and budget.
On the plus side of this credit card is the Barclaycard Freedom reward scheme for which users of this card are eligible.
This gives you a 1% reward for most of your spending with the credit card which can be used to buy goods and services at a wide range of retailers.
With that high interest rate, the Barclaycard Initial credit card is definitely not for everyone, however for those who are starting out on their careers and who would struggle with obtaining a more competitive rates, this credit card is definitely something to consider.
A big advantage is that the young person who uses this sort of card is building up a credit history that hopefully shows them to be responsible with their spending habits. Assuming that they pay the monthly payments on time then using a credit card like this will help them to progress to a more mainstream card in the future.