Credit card or no credit card.

Smok3y · 2 Jul 2017 at 12:19

Been wondering since looking at my Experian report wether it's better to have a credit card or no credit card.

Basically I want to rebuild my score. I have a credit card with a £1000 limit but have made maybe 3 purchases since having it. Experian reports that having a card is good but becuase my limit is only £1000 this is bad.

So is it better for me to cancel the card entirely or try to use the card and pay in full each month? Tbh i'd rather have no credit card but as above I need to sort my score out.

Vonhelmet · 2 Jul 2017 at 12:33

If you can be disciplined with it, then just use it a bit. I stick about £300 a month through mine and pay it off in full every time.

However, if you don't trust yourself with it, just ditch it and learn to live without it.

Caged · 2 Jul 2017 at 12:35

I put everything on a card, and it's paid off in full each month.

It's worth it for the purchase protections and knowing that a retailer charging something twice by mistake isn't going to affect your ability to pay direct debits.

Kenai · 2 Jul 2017 at 12:37

Use it as a normal card, pay off everything every month, don't buy anything you wouldn't have bought with your debit card.

Virtually all my purchases go through mine unless my debit card has a particular cashback offer.

Werewolf · 2 Jul 2017 at 12:40

Caged said:
I put everything on a card, and it's paid off in full each month.

It's worth it for the purchase protections and knowing that a retailer charging something twice by mistake isn't going to affect your ability to pay direct debits.

This is pretty much how I use mine.

I got into some minor trouble when I was young and foolish (18-20) with putting more on than I could pay off easily, but since then I've always paid it off in full every month.

I use mine for anything I do online, or any time I can't carry the goods out of the store with me as under the consumer credit act the card company is jointly liable for anything over £100 (so if the company goes bust i'm covered), and it's not my money if a company gets hacked and the card number leaked (has happened to me at least 3 times that I know of, BC have replaced the card without notice at least twice more).

The only time I use my debit card online is to pay off the credit card

DJMK4 · 2 Jul 2017 at 12:52

If you are not stupid. But stick to a small limit.

Dont go crazy and fill 2.6k worth of debt like I did.

Both of mine have now been paid off and closed. No cards for me unless it's absolutely essential

TheLegendOfMart · 2 Jul 2017 at 12:56

I can't get credit cards. Is it possible to use it like a debit card, i.e. only spend what you physically have the cash for then pay it off straight away?

If so that's the only way I'd use a credit card to build my rating.

Kenai · 2 Jul 2017 at 13:02

TheLegendOfMart said:
I can't get credit cards. Is it possible to use it like a debit card, i.e. only spend what you physically have the cash for then pay it off straight away?

If so that's the only way I'd use a credit card to build my rating.

It's possible to use it however you want. You can't get it to check how much money you have first but surely you know if you have £500 or £5000 sat in your account?

Unless your money management is so bad you have absolutely no idea how much money you have, it just boils down to willpower really, only spend what you can afford. If you dont know what you can afford without relying on the bank preventing you spending money you dont have then a credit card probably isn't for you.

Mr.Cookie · 2 Jul 2017 at 13:09

TheLegendOfMart said:
I can't get credit cards. Is it possible to use it like a debit card, i.e. only spend what you physically have the cash for then pay it off straight away?

If so that's the only way I'd use a credit card to build my rating.

You can get ones you put funds in then spend, contemplated doing this for online purchasing as it doesn't link to you bank account. Ended up with one through my bank as I was wanting to put a holiday on it for the extra cover you get.
Paid it back straight away and use card for purchases throughout the month then pay back, credit score went up about 100 points.

Smok3y · 2 Jul 2017 at 13:12

Looks like i'll have to try and use it as a debit card then let my bank balance build up to pay it in full at end each month

TheLegendOfMart · 2 Jul 2017 at 13:16

Kenai said:
It's possible to use it however you want. You can't get it to check how much money you have first but surely you know if you have £500 or £5000 sat in your account?

Unless your money management is so bad you have absolutely no idea how much money you have, it just boils down to willpower really, only spend what you can afford. If you dont know what you can afford without relying on the bank preventing you spending money you dont have then a credit card probably isn't for you.

That's what I mean. I'd only spend money I knew I had. Not use money I might potentially have at payday or something. Instead of using a debit card use the credit card to buy everything then pay it off straight away.

Kenai · 2 Jul 2017 at 13:26

TheLegendOfMart said:
That's what I mean. I'd only spend money I knew I had. Not use money I might potentially have at payday or something. Instead of using a debit card use the credit card to buy everything then pay it off straight away.

You can do it through your own control, not really as an automatic function though.

Puzzled · 2 Jul 2017 at 13:33

Credit cards are fine as long as you don't go crazy. Personally I put everything on credit with a 0% interest on purchases deal and then when that expires I'll switch it to a 0% balance transfer deal and pay it off monthly. I can pay it all back now if I wanted but I prefer to keep the funds available.

I do know people who have £15k+ on credit cards and that would worry me a bit but as long as you stay on 0% interest deals with payments going out on time then they aren't paying any extra for it.

Holst1981 · 2 Jul 2017 at 13:52

I like to have enough in my account to pay it off and then its auto paid on direct debit (full ballance)
If I dont have enough to pay off the full balance then I stop using it completely until I do. As I have enough in my current account this is easy for me, but when I had less cash I would rarely use the CC.

If you start paying interest on a card that is meant to be improving your credit rating your doing it wrong imho.

If a higher limit is better for your rating and you can be disciplined ask for one.

Werewolf · 2 Jul 2017 at 13:53

MonkeyMan said:
I do know people who have £15k+ on credit cards and that would worry me a bit but as long as you stay on 0% interest deals with payments going out on time then they aren't paying any extra for it.

Unless I had the money to pay that off at very short notice it would worry me.

It's one of the mistakes a lot of people make, they put a lot on credit thinking they're doing ok keeping it rolling on and are getting a good deal with the 0% offer or whatever, and they might well be as long as their circumstances don't take a change for the worse.
I know a few people who lived like that for a long time and ended up really regretting it when one of them became ill/lost their well paid job and found they couldn't keep up the repayments as easily.

Credit cards are great for short term credit and protection, but once you reach a certain point relative to your income and savings you are imo playing with fire and hoping that your financial circumstances don't get worse for any reason, and that the economy doesn't take another downturn resulting in the card companies starting to cut back on the number of low interest deals they are offering.

Swifty55 · 2 Jul 2017 at 14:02

I use mine for any food shopping/goods as I get cashback and pay it off every month.

413x · 2 Jul 2017 at 16:58

Wow, it does scare me reading posts about what some people think about credit cards

I'd say get one if you can behave. Don't of you can't! My credit score is near perfect probably as I have 3 and don't miss payments etc.

An Amex for day to day spending paid off in full every month (1pc cashback) I put everything I can on that.. This can get me. 30-50 quid in a typical year

A tesco Mastercard for anything non Amex for tesco points

A 0pc balance transfer/purchases. I out a 1.5k lens on there and pay back 100 a month until its done. Apply for another and buy another treat (next time a 3d printer)

It is puzzling how people can't be disciplined. If you have about 1k of spending money a month simply don't spend more than 1k on it.
It's pretty easy to see the statement balance. No difference to your pay each month in a bank account imo.

Only use my debit card for cash and things that charge a credit card fee

Steeps · 2 Jul 2017 at 17:48

3 years ago my credit card had a limit of 2k, I put everything on it and pay it off in full every month by Direct Debit, which is usually 3 weeks after the bill has landed. Since then they've upped my credit limit to 6k. Credit rating is about how well you use your credit and repay what you owe, so using a credit card and paying it off in full will build your rating better than sitting on a card you're not using.

wingman · 2 Jul 2017 at 18:06

Caged said:
I put everything on a card, and it's paid off in full each month.

This, or rather, I put everything I can put through my credit card onto my credit card. Some places do not accept Amex!

I do not get how some adults don't trust themselves using one. But then again, there are a lot of obese people about, so perhaps I do understand it.

Efour · 2 Jul 2017 at 19:01

Just get one with a limit similar to your income and use it as your regular payment card and settle it every month.
Earn points rewards or whatever it is you want. Build credit score or some other stupid thing.
Don't be a moron. If you are a Moron don't get a credit card until you grow up.