Credit Card Do's and Don'ts

What are the dos and don’ts of managing your credit card?

Exercising good credit card habits is important, especially when it comes to protecting your credit score.

In our guide to credit card dos and don’ts, thimbl shares some key information about how to manage your credit card responsibly.

Do's

• Do thorough research before you make an application
  A credit card is a financial commitment, and you should take the time to research all your options before applying. If you’re confident that a credit card is right for you, you could start your search by comparing different types of credit cards and their features. For example, a credit builder credit card, such as the thimbl Credit Builder Credit Card, could be useful if you’re hoping to rebuild your credit score.

• Do carefully review your credit agreement before you sign and return it
  Before you accept a credit card offer, make sure you understand your interest rate and any charges associated with the account, for example, late payment fees.

• Do stay well within your credit limit
  Your credit limit is the total amount of money you can borrow on your credit card. If you try to spend more than your credit limit, your card will likely be declined. Some credit card providers could charge you a fee for going over your credit limit.

• Do keep your credit card utilisation as low as you can
  What is credit card utilisation? Credit card utilisation is the amount of money you’re using of your credit limit. It’s usually shown as a percentage. For example, if you have a credit limit of £500 and you’ve spent £150, your credit card utilisation would be 30%.

  According to Experian, keeping your credit card utilisation below 30% could improve your credit score.

• Do make at least the minimum repayment amount each month
  Each month, your credit card provider will send you a statement showing the minimum amount you’ll need to repay. Depending on the provider, this could be a set amount, such as £10, or a percentage of your balance.

  If your finances comfortably allow it, you could make more than the minimum repayment due.

• Do think about clearing your balance in full each month – if you can
  Repaying a credit card should never leave you in a position where you’re struggling to cover the cost of your essential monthly expenses, such as housing and food. However, if you can afford to, you might think about clearing your credit card balance in full each month.

• Do carefully check your credit card statement each month
  Taking an in-depth look at your credit card statement could help you better understand your finances and spending habits. It could also help you identify any fraudulent activity on your account.

• Do contact your provider if you’re struggling with your repayments
  If you’re worried about an upcoming payment, you should reach out to your provider as soon as possible. They will take the time to listen to your situation with empathy and offer support by talking you through any options that could be available to help reduce some of the pressure you’re facing.

Don'ts

• Don’t make multiple applications for credit in a short period of time
  When you make a credit card application directly with a provider, they will complete a creditworthiness assessment, which will involve a hard search or an Open Banking check. A hard search will be visible on your credit file for up to 12 months. Undergoing multiple hard searches in a short period of time could damage your credit score.

  Some providers offer an eligibility check, which shows you your chance of approval before you make a full application, with no impact on your credit score. Checking your eligibility first could reduce the risk of multiple applications and hard searches.

• Don’t spend more money than you need to, or can afford to repay
  Your credit card, and in particular your credit limit, should never be an incentive to spend money when you don’t need to, on things you can’t afford to repay. Before you make a purchase, stop and ask yourself the following questions:

  1. Can I afford it?
  2. Do I need it?
  3. Could I get this cheaper elsewhere?
  4. Could I borrow this item, rather than buy it?

• Don’t use your credit card to withdraw money from a cash machine
  This is called a cash advance, and some providers view this as poor money management. You could also be charged a cash advance fee.

• Don’t forget to keep track of any applicable promotional periods
  Some types of credit cards, such as a 0% purchase credit card or a balance transfer credit card, come with a promotional period of low or no interest spending. Any balance remaining, as well as purchases made after the promotional period ends, will be charged interest at your standard rate. It’s important to be aware of exactly when your promotional period ends.

• Don’t spend on a rewards credit card for the sake of it
  Some rewards credit cards offer perks such as air miles, cashback, or store points for a specific retailer. If you’re not in the habit of clearing your balance in full each month, you should calculate whether the interest you’ll pay will be more than any rewards you’ll earn.

• Don’t default on your repayments
  A late or missed repayment could harm your credit score. If you think that you might struggle to make a repayment, you should contact your lender.

• Finally, don’t let money or debt worries consume you
  Looking for free debt advice? Please consider reaching out to any of the following charities and organisations for confidential, impartial support: StepChange, MoneyHelper, Citizens Advice, and National Debtline.

The thimbl Credit Builder Credit Card

Interested in learning more about the thimbl Credit Builder Credit Card? Here are five things you should know.

1. When used responsibly alongside other credit-building techniques, the thimbl Credit Builder Credit Card could help you work towards a healthier credit position.
2. The thimbl credit card comes with a personalised starting credit limit between £200 and £2,000.
3. You can check your eligibility for a thimbl credit card in just 90 seconds.
4. Checking your eligibility for a thimbl credit card will not affect your credit score.*
5. If approved, you could access your virtual thimbl credit card the same day.**

Find out if you’ll be accepted before you apply for your thimbl. Credit Card

• For all credit levels, from poor to excellent
• Checking won’t affect your credit rating
• 48.9% APR Representative (variable)

Check my eligibility

How does the thimbl Credit Builder Credit Card work?

Use your thimbl credit card to cover the cost of an essential and affordable purchase and make at least the minimum repayment amount due each month. If you can, you should try to make more than the minimum repayment.

Your repayment history will be reported to the credit reference agencies (CRAs). If you’ve made your repayments on time each month, you could notice an improvement in your credit score over time. As well as making your repayments on time, you’ll also need to make sure that you follow the dos and don’ts listed above, such as keeping your credit card utilisation low, staying well within your credit limit, and avoiding using your credit card to withdraw money from a cash machine.

You should also look into other credit-building methods and use these alongside your credit builder credit card. Other credit-building methods include registering to vote at your current address and checking your credit report for any errors.

How can I check my eligibility for a thimbl Credit Builder Credit Card?

Fill out our online form and we’ll let you know in just 10 seconds whether you’ve been pre-approved for a thimbl credit card. Please note that pre-approval does not guarantee acceptance.

You can check your eligibility for a thimbl Credit Builder Credit Card if you:

• Are between the ages of 18 and 70;
• Are a UK resident with at least 1 year's UK address history;
• Have a monthly net income of at least £800;
• Have an active credit account that has been open for a minimum of 12 months; and
• Do not already hold a Zable credit card.

The thimbl credit card is powered by Zable. Zable is a trading style of Lendable Ltd. Lendable Ltd is unable to consider applications from anyone who has declared bankruptcy or is in an Individual Voluntary Arrangement (IVA).

*thimbl uses soft search technology to check your eligibility, which will not affect your credit score. If you’re pre-approved for a thimbl credit card and choose to make a full application directly with our provider, Zable (a trading style of Lendable Limited), you’ll undergo a hard credit search. A hard search will remain on your credit file for up to 12 months, and multiple hard searches within a short period of time could hurt your credit score. Please be aware that pre-approval does not guarantee acceptance. Any credit obtained upon successful application will be provided by Lendable Ltd.

**Access to your virtual thimbl credit card will depend on the outcome of further checks carried out directly by Zable, which will include a fraud check through Open Banking on a bank account registered in your name.