Credit cards : Tue Jun 24, 2014 3:29 pm  

Just don't go anywhere near them please !!!

Re: Credit cards : Tue Jun 24, 2014 6:41 pm  

I got one when I was in my early 20s and living in London. Went mental and quickly racked up a 3K debt, which took me around 3 years to pay off. My disposable income at the time was but a few hundred quid a month. Once I paid it off I cancelled the card and vowed never to go down that route again.

Got another one a couple of years ago to finance a purchase I really wanted to make. 15 months interest-free credit. Paid it off within the time limit.

Now it stays in my wallet and only comes out in emergencies, for example unexpected repairs to the flat or car. Oh...and I recently used it to finance a professional development course that set me back £1500.

Unfortunately sometimes a necessary evil. Pray tell what bad experience you have had that prompted you starting this thread?

Re: Credit cards : Tue Jun 24, 2014 10:28 pm  

Don't agree. They are valuable resources when used properly and kept within responsible limits.

It's important to ignore the interest free ones that then lead to massive rates.

I've got a Barclaycard that I've had for a few years. 6% for life on everything. You are talking £30 monthly interest on a £6000 balance.

Re: Credit cards : Wed Jun 25, 2014 7:03 am  

I use them for almost everything. The only transactions taking money out of my current account are: cash withdrawals (for small spending and drinking) and a credit card payment. I can delay all payment of "real" money, and increase my money by means of points/cashback earned and being able to keep my own money for longer.

Why are you against them DMW?

Re: Credit cards : Wed Jun 25, 2014 9:41 am  

Saddened! wrote:

Don't agree. They are valuable resources when used properly and kept within responsible limits.

It's important to ignore the interest free ones that then lead to massive rates....

No, the real question is whether you can do basic arithmetic, and can keep a diary or task list. I haven't really used credit cards for a long time but many years ago I did, I had quite a few, and often needed them. But I just went on various sites that gave comparisons and was frequently transferring balances to the latest "0% for balance transfers" card, and paid no interest at all for many years while making the minimum repayments so taking into account inflation, they were paying me to borrow the money.

You just needed to have some pretty basic organisation. If you were stupid enough to miss a cut-off date then you'd deserve to be stung.

Re: Credit cards : Wed Jun 25, 2014 11:05 am  

Used it way too much because it was there and ran up a large bill. I'll never do it again as it is just so easy to spend on it.

[DaveO]

Re: Credit cards : Wed Jun 25, 2014 11:53 am  

Richie wrote:

I use them for almost everything. The only transactions taking money out of my current account are: cash withdrawals (for small spending and drinking) and a credit card payment. I can delay all payment of "real" money, and increase my money by means of points/cashback earned and being able to keep my own money for longer.

Same here. I pay the balance off in full each month so they are really like debit cards for me with a delayed payment.

You also get a lot of protection from consumer legislation if you buy goods on a credit card you don't get if you use a debit card, cash or PayPal.

If there is a cost free option to pay via credit card you would be mad to use your debit card instead.

Re: Credit cards : Wed Jun 25, 2014 12:42 pm  

Our main one is a charge card - gets cleared by direct debit. Historically, overdraft interest has been cheaper if there are insufficient funds.

Re: Credit cards : Wed Jun 25, 2014 2:35 pm  

We got a credit card to take abroad on our honeymoon as a "just in case" thing. I use it for big purchases which is very rare, for the protection it gives and pay the balance off at the beginning of the month when Mr HWS gets paid. I use it once or twice a year. Mr HWS uses his at Christmas only so he gets his own statement and bill and pays it off straight away. The trick of a credit card is never to put on it more than you can afford to pay off without interest, but for a lot of people the temptation is just too great.

Re: Credit cards : Wed Jun 25, 2014 5:43 pm  

Saddened! wrote:

I've got a Barclaycard that I've had for a few years. 6% for life on everything. You are talking £30 monthly interest on a £6000 balance.

And if you continue at £30 a month when do you expect to pay it off? That's the trap. How are you ever going to clear that £6,000 balance? 6% for life pretty much means just that - for life. In the back of their minds people think "I'll pay a bit more off when I have a better income, or if I get a windfall". It just doesn't happen, and the cc companies know this.

I chopped up my credit cards several years ago. Now unless I have the cash in the bank I don't buy anything, or I save for it. I also keep a relatively large buffer in my account for emergencies such as boiler breakdowns, car repairs, etc, and absolutely refuse to go below that buffer unless it's a genuine emergency requirement.

Visa debit offers some protection - almost as much as the credit card, although admittedly not quite as much. I tend to check out anyone I buy from beforehand - certainly online - and don't buy unless I'm confident in the company, or have used them before.

Used wisely and cleared every month they can be an assett. But otherwise steer clear. And for God's sake whatever Martin Lewis says, 0% card-hopping is not a good financial plan unless you've already racked up the debt and are sticking to a strict plan to clear it asap.