Why a Purchase Credit Card could help your credit score

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If you are trying to improve your credit score, then a purchase card could be the answer. However, it is important that you use your purchase card responsibly.

Improve credit score

In order to get the most benefit from a purchase credit card, it is important that you:

  • Pay off your balance in full each month. This way, you won’t pay any interest on the money you borrow and will avoid incurring late payment fees. If this is not possible because of financial difficulties, speak to an independent debt adviser such as Citizens Advice or National Debtline.
  • Make all your payments on time. The history of making repayments is an important factor when lenders consider whether or not to grant credit cards and loans in future (known as ‘credit scoring’). However, being late with just one payment could cause serious damage to your score. So if you do have difficulty making payments on time because of unexpected circumstances (for example losing a job or going into hospital) talk to an independent debt adviser before late payments start affecting your score negatively.
  • Keep the amount of debt you have on all your cards below their limits . This makes sure that if anything comes up unexpectedly again in future (you fall ill again), there will be enough room for some breathing space before reaching those limits again – this can help avoid getting into further financial difficulty which may lead into needing an IVA or bankruptcy petition being filed against them by creditors due to persistent overspending!

Pay everything off each month

In order to maintain a good credit score, it’s important that you pay your bills on time and in full. One of the best ways to do this is by using a purchase credit card. If you can manage your money so that you always pay off the balance at the end of each month, then it’s likely that this will help improve your credit score.

In addition to making sure that you make all payments on time, there are some other things to be aware of when using a purchase credit card:

  • Make sure that you can afford to pay off the balance in full each month before getting one! If not, then it may be better for you to look at another type of credit card instead (like an installment loan).
  • Try not use more than 30% of your available line-of-credit amount for any given purchase (or else risk being penalized).


If you have a purchase card that gives cashback, choosing this as one of your regular cards can also save you money.

Cashback credit cards are designed to offer up to 5% cashback on some purchases. This can be an attractive option if you are looking for a way to get the most out of your money and improve your credit score at the same time.

Use it to purchase anything

A purchase card is similar to a normal credit card in that it allows you to use the money on the card to make purchases. However, unlike a regular credit card, you don’t have to pay off your balance in full each month. This means that if you don’t want or need anything urgently, you can delay paying off the full amount until later on.

While this may sound like a great idea at first glance (and it is), there are some potential drawbacks as well:

  • The interest rate charged can be higher than what’s charged by other types of cards (which will mean that your debt could get bigger quicker than expected).
  • If you don’t pay off your balance promptly, this will affect how much credit rating agencies see as being available for new borrowings and how many lenders view your ability and willingness to repay money over time.

Handling credit responsibly

Having a few high-value purchases on your credit file could help improve your credit score by showing you can handle credit responsibly. Credit card companies use a variety of factors to calculate your credit score, but they particularly like to see that you can handle large amounts of debt responsibly. In other words, if you’re already carrying around $10,000 in debt across several cards with balances of $2,000 each, it might not be as much of an issue for them if one of those cards has an average payment of $200 instead. In some cases, card issuers will even increase the amount they allow you to borrow based on how much money they think they’ll get back from their investment in you!

Reduce interest

When you’re making a big purchase, it’s tempting to take out a loan or use your full credit limit. But doing so could cause damage to your credit score.

Instead, consider using a purchase card (also called a store card) as a way of shopping on the high street without incurring interest charges. Let’s say you want to buy an expensive piece of furniture that costs £1,000 from John Lewis: by using their store card, which has no annual fee and charges 0% APR for the first 28 days after opening an account, you can avoid paying interest for up to six months while still having access to some of their other perks such as free delivery or exclusive discounts.

A purchase card can be a useful tool for improving your credit score, but only if you use it responsibly. If you don’t pay off the balance in full and on time each month, then this will not help your score and instead could damage it further.

Please remember that this advice is provided for information purposes only and should not be construed as financial advice or legal advice. You should seek independent financial or legal advice before making any decision based on what has been written here.