Credit Cards - worth it in the long run?

  • Thread starter Thread starter Guest
  • Start date Start date
Cybergangster said:
No, no, no! I'm terrible with credit and should never be allowed near it. Wasted a good 3 years of my life dealing with credit debt... never again. Only have a small amount available on my CC nowadays for online purchases. Every thing else is cash-in-hand.
Click to expand...

That is an issue with you though, not the credit, other people who have more self control should use credit :)
 
DIABLO said:
As the above poster said, a visa debit others the same protection as a visa credit card.
Click to expand...

Not quite, because the credit card benefits are a legal obligation under the consumer credit act, the debit card benefits aren't, there's a lot more 'wriggle room' for the banks when it comes to debit cards.
 
How easy are credit cards to manage? I am very good with my money, so i know i wouldn't go stupid, and all i've heard from you lot are good things about them. So how easy is it to pay off the credit at the end of the month? Is it done online? I do all my banking online, or if they don't let me, over the phone, so is it set up the same, you see your credit card account and how much you need to pay back by the end of the month then do an online transfer from a debit card account to the credit card account? Can you have money on credit cards? i.e. do cc work either in debt or at 0, or can you have money in them?
 
They vary as with all products but the shell citicard for example has an online screen which is presented exactly the same as a bank statement, it shows recent transactions, and a balance.

The only difference is that the balance is a bad thing, as its a balance due to them. The payment dates are very clearly listed, along with calculated interest if you do not pay by the date, etc etc. With the card you have 2 dates, the bill date at which it cuts off the transactions and generates a balance due by your payment due date which is around 2 weeks later.

To pay it, you either setup an automatic direct debit, or do what i do which is have my credit card set up as a payee on my banks online banking. A few clicks in there and its paid. Then a couple of days later the payment shows on the credit card online banking screen and the balance drops by the payment amount.

Easy as having 2 bank accounts really :)
 
Jez said:
They vary as with all products but the shell citicard for example has an online screen which is presented exactly the same as a bank statement, it shows recent transactions, and a balance.

The only difference is that the balance is a bad thing, as its a balance due to them. The payment dates are very clearly listed, along with calculated interest if you do not pay by the date, etc etc. With the card you have 2 dates, the bill date at which it cuts off the transactions and generates a balance due by your payment due date which is around 2 weeks later.

To pay it, you either setup an automatic direct debit, or do what i do which is have my credit card set up as a payee on my banks online banking. A few clicks in there and its paid. Then a couple of days later the payment shows on the credit card online banking screen and the balance drops by the payment amount.

Easy as having 2 bank accounts really :)
Click to expand...

yer, sounds good. So you have it set up so you pay the same amount each time? Can you have positive money on the credit card, or is it always negative or 0? Is a credit card almost identical to another account for arguments sake?
 
I guess its the same as a bank account in that you can overpay and have a negative balance (a good thing, as the card works in the opposite way to a bank account) but there is absolutely no point putting it over.

WTT the amount, i pay whatever the amount due is for that month, as i say you get a cut off point at which the balance is calculated, and you get 2 weeks to pay it. I pay it as soon as it gets calculated generally.
 
I've had a credit card since the age of 18 and find it very useful in terms of a more secured means of payment for purchasing things online as well as general everyday use. I never spend beyond my means and pay the bill off in full each month.

If you're able to use the card responsibly then there is no reason not to have a credit card.
 
rollins said:
I'll just be setting up the DD to pay the balance in full, which is a standard option as well I believe.
Click to expand...
?
So it is possible to assign a direct debit (from a different bank?) and it will automatically pay the monthly repayments and never cause you hassle?

So pro's of the cc are:
Security
Clubcard points if you go with tesco(which i would)
cashback(you get a % return on how much you use the card?)

Con's:
You can be a silly bugger and force yourself into bankruptcy lol

Would it also help to give you a credit rating? Being young i am trying to get as much of a good credit rating as possible using isa's got 2 accounts etc.
 
rollins said:
Believe me when I say that when I was younger I was a prat with credit cards. Once you have been burned .......
Click to expand...
You and me both. If what follows scares even one person 'straight' it'll have been worth the post...

I started with £5k on the cards, got a loan to cover it, another £10k on the cards, make the loan bigger, another £10k, get a mortgage further advance to cover it all, rinse, repeat, and then get another £25k debt for good measure.

Luckily a reality check happened. I'd turned a £38k repayment mortgage into a £90k mortgage and then got close to £25k in loans and cards on top. I might have had enough equity to remortgage again but as I was with one of the sensible (building society) types I'd expect they'd have taken a dim view, and rightly so. Given what's happened since, it's just as well I didn't try.

Luckily I escaped the trap a few months later courtesy a £14k share 'windfall' and I'm now down to £82k mortgage and £3k loans/cards. I hope to be under £80k total with no loans and zero on the cards by 2010.

Having said all that, if you have the self-control, they're well worth it - purchase protection, 56 days' interest free (avoid cards that don't offer an interest free period), cashback if you're lucky, and if you're sensible they'll do your credit score no harm at all.
 
There are no cons, just don't be an idiot and spend money that you don't have. Its not hard, you can see the balance on-line and when it is going to be due.
 
Tesco said:
What type of credit card spender are you?

Everyday Spender You use your card on a daily basis to purchase groceries and petrol, and you pay off the balance every month. As interest rates will not affect your finances, your biggest worry will be finding a card that offers great benefits at the lowest cost.
Click to expand...

I think I am this, what sites have good comparisons of credit cards? Also what does it mean when it says "your biggest worry will be finding a card that offers great benefits at the lowest cost."
 
Some cars may have a fee, if you find any that do, ignore them. The card shouldn't cost you anything.
 
Interest-free period too. Some offer none, some offer up to about 56 days. Obviously, the longer the interest free period, the longer the cash to pay off the card can stay in an account earning interest (if you're lucky enough to have an account where such a thing still exists).
 
I think if I get credit card it will probably be the tesco one, so for me, just a glorified clubcard built into my debit card more or less. I can't afford to use it for things I can't afford just yet as I don't have a job :p just student loans. But the security would be better and more points on normal shopping, and more points on anything i buy anywhere (and seen as food shopping is my main outgoings the points do actually make quite a difference when i get coupons). What is mastercard like? This is what tesco use, not visa.
 
Last edited:
I'm glad I have my CC. I initially was gonna set it up to pay the balance in full but I'm kind of glad I didn't. Being a student I have to wait until my loan comes in, so I can buy stuff now (essentials like food, not beer :p) and depending on the timing have a 2 month interest free period until I have to pay. At the moment I can't afford to pay, however. Luckily my APR is only 1.9%, so I don't mind paying £2 a month interest :p. (I think this is how it works, correct me if I'm wrong lol).

EDIT: Oh, according to the Natwest website my APR is 18.9% lol? I've no idea, because I've being paying about £1.50 a month interest with £60-70 on my CC?
 
Last edited:
yeah, was going to say, what kind of place is giving credit cards out with 1.9% apr.LOL

Also if you round it to 20% to make life easier, 20% of 60 is 12, so 12 by 12(months) = 1£

Thats sort of apr doesn't seem as bad with small figures. Just don't go into the thousands :p

not quite sure how apr works fully, but i have a genral jist, it might be compoundidk, although i know is that if you are in debt, its worse than having the money. All i also know is that when i see double figures it makes my eyes water that they can do that to people. Pretty sure you could get better deals from the mafia.
 
Last edited:
FrostedNipple said:
All i also know is that when i see double figures it makes my eyes water that they can do that to people.
Click to expand...
There aren't all that many cards around that don't charge in the double figures now. I'm sure there are some of course.

If you think double figures is bad, try the three- and four- figure APRs charged by some loan sharks. Pay day loan companies fall into this group too - they'll typically charge about £25 for a one-month loan of £100. You'd best call NASA to comprehend that APR.
 
Last edited:
You must log in or register to reply here.
Back
Top Bottom