Credit Card Noob!

koolpc · 15 Jan 2015 at 11:38

People, I am getting a Credit card to take on holiday with me. It will only be used when i need to hire a car. Now, as i am not going to be buying anything with it as i already paid for my car hire via Visa Debit, am i right in saying that i can just rip it up after my holiday? My credit amount has been given to me but i wont be buying anything with the car, just using it for car hire people to hold £250 on it for until i take the car back to them with hopefully no damage.

See, i am thick and thought that i would have to pay the credit card company the min each month but i only do that if i have used the card? I dont pay anything unless i actually make a purchase with the card?

Sorry for noob questions but i have never had a credit card!!

Basher · 15 Jan 2015 at 11:43

If you don't spend anything, no, you won't have to pay anything back ...

rossk26 · 15 Jan 2015 at 11:47

Or be sensible and get the Halifax Clarity Credit card for use abroad. Do all your spending on this card for ideal exchange rates and no fees.

POB · 15 Jan 2015 at 12:04

I'd be tempted to buy something small say in Tesco to be 100% sure the card was active correctly. (Pay it a day later, you won't accrue any interest.)

Also warn the bank in advance if you take the card abroad. Will reduce the chances of a decline.

Semple · 15 Jan 2015 at 12:20

Answering your own questions

And take note of POBs advice.

Basher · 15 Jan 2015 at 12:30

POB said:
I'd be tempted to buy something small say in Tesco to be 100% sure the card was active correctly. (Pay it a day later, you won't accrue any interest.)

Also warn the bank in advance if you take the card abroad. Will reduce the chances of a decline.

This is good advice. Although, you don't need to pay it back a day later to get no interest ...

[TW]Fox · 15 Jan 2015 at 12:32

Basher said:
This is good advice. Although, you don't need to pay it back a day later to get no interest ...

No, for conventional UK based purchases is interest is only charged after the statement due date. Pay the bill by the due date, you pay no interest.

This effectively means that irrespective of the cards APR you get up to 56 days interest free depending on the purchase date and billing date.

The only time a credit card accrues interest from day of transaction is for things like cash advances.

Basher · 15 Jan 2015 at 12:34

[TW]Fox;27484586 said:
No, for conventional UK based purchases is interest is only charged after the statement due date. Pay the bill by the due date, you pay no interest.

This effectively means that irrespective of the cards APR you get up to 56 days interest free depending on the purchase date and billing date.

The only time a credit card accrues interest from day of transaction is for things like cash advances.

Exactly. Which is what I was saying.

Freakbro · 15 Jan 2015 at 12:46

[TW]Fox;27484586 said:
No, for conventional UK based purchases is interest is only charged after the statement due date. Pay the bill by the due date, you pay no interest.

This effectively means that irrespective of the cards APR you get up to 56 days interest free depending on the purchase date and billing date.

The only time a credit card accrues interest from day of transaction is for things like cash advances.

Just to point out that if you don't pay the balance in full by the due date, then interest is charged on the full amount, not the balance left after payment is made.

That caught me out years ago before I knew it....too much in the T&Cs to read... (This is just for information only not really relevant to the OP I know!)

koolpc · 15 Jan 2015 at 14:48

Thanks.

I wont be buying anything on the card. Only using it for car hire to hold money

Amp34 · 15 Jan 2015 at 15:07

No need to cancel the card.

Get the Clarity for overseas transactions and the ring up the bank and tell them you want to pay it off in full by direct debit every month. Once done you can essentially forget about it, any payments on the card will automatically be paid off at the end of the month.

That way even if you keep on using it there will be no interest to pay. Forget about minimum payments, that's how credit cards start becoming expensive and how so many people get into debt.

Amp34 · 15 Jan 2015 at 15:12

koolpc said:
Thanks.

I wont be buying anything on the card. Only using it for car hire to hold money

Why not use it for paying when abroad to? It saves carrying loads of cash around, which is only really needed in developing countries (and even then not as much as you think, ATMs are usually everywhere, although probably won't accept MasterCard).

If you have the direct debit set up you don't need to worry about it costing you any more.

koolpc · 15 Jan 2015 at 16:43

I took out this card with my building society:

Our combined purchase and low balance transfer fee offer (First Card)

http://www.nationwide.co.uk/products/credit-cards/our-credit-cards/our-cards

I wont be buying anything with it. Just using for car hire company to hold money on while i have the car. So, in effect, once i get home i can cut up card?

I have never used a credit card and i am 50. Never liked them. Just that the car hire companies require one.

dry · 15 Jan 2015 at 16:47

Amp34 said:
Why not use it for paying when abroad to? It saves carrying loads of cash around, which is only really needed in developing countries (and even then not as much as you think, ATMs are usually everywhere, although probably won't accept MasterCard).

If you have the direct debit set up you don't need to worry about it costing you any more.

OP will pay interest from the day they withdraw cash if they use a credit card in an ATM, as well as potentially a non-sterling transaction fee.

I took a Metro Bank debit card with me to Spain, linked to an account with not much money in it and used that for cash withdrawals. No non-sterling fee and no cash withdrawal fee within Europe. Uses Mastercard's daily exchange rate too.

The Halifax Clarity credit card is highly regarded for spending abroad- see MSE.

enigma27 · 15 Jan 2015 at 17:07

OP Let me answer your question...

The car Hire company will do a 250.00 transaction on your card which will be put on hold ( like a transaction that is not approved as a security deposit ) As long as you don't smash the car up on return of the car the company will cancel the transaction.

In this scenario you wont physically have a balance on your card so yes you don't need the card as such and can cut it up on your return.. although the company will keep your account open.. if your not going to use it I would suggest closing down the account after you return..

koolpc · 15 Jan 2015 at 17:16

enigma27 said:
OP Let me answer your question...

The car Hire company will do a 250.00 transaction on your card which will be put on hold ( like a transaction that is not approved as a security deposit ) As long as you don't smash the car up on return of the car the company will cancel the transaction.

In this scenario you wont physically have a balance on your card so yes you don't need the card as such and can cut it up on your return.. although the company will keep your account open.. if your not going to use it I would suggest closing down the account after you return..

Brilliant. Many thanks for a clear answer for a noob like me!

Amp34 · 17 Jan 2015 at 19:01

dry said:
OP will pay interest from the day they withdraw cash if they use a credit card in an ATM, as well as potentially a non-sterling transaction fee.

I took a Metro Bank debit card with me to Spain, linked to an account with not much money in it and used that for cash withdrawals. No non-sterling fee and no cash withdrawal fee within Europe. Uses Mastercard's daily exchange rate too.

The Halifax Clarity credit card is highly regarded for spending abroad- see MSE.

Think you missed my previous post saying get the Clarity card...

With western countries there really isn't much need to withdraw huge amounts of cash. The problem with the Metrobank card is it is still a MasterCard, it's always worth having both visa and MasterCard available, which is one of the reasons I got a flexplus account from nationwide. MasterCard isn't accepted as widely outside of Europe and western countries, whereas Visa is the defacto international card worldwide so having both means you always have access to free cash withdrawals abroad or free purchase (or both).

bsoltan · 17 Jan 2015 at 23:41

Why don't you keep it in case you want to hire another car on holiday some time?

It isn't going to cost you anything to keep in a drawer, and it isn't an evil thing you need to cut up and dispose of.

Belly · 20 Jan 2015 at 18:26

FWIW: Before going on holiday I pop into LLoyds and tell them I'll be out of the country and ask them to register my debit/credit cards.

One time I went there and the assistant asked me if I had any other credit/debit cards and I stated that I had a Barclaycard and I'd be contacting them separately. She told me that she was able to record both on the system.

Numerous visits since then and on each occasions they've been able to record both of the cards.

koolpc · 20 Jan 2015 at 18:41

Belly said:
FWIW: Before going on holiday I pop into LLoyds and tell them I'll be out of the country and ask them to register my debit/credit cards.

One time I went there and the assistant asked me if I had any other credit/debit cards and I stated that I had a Barclaycard and I'd be contacting them separately. She told me that she was able to record both on the system.

Numerous visits since then and on each occasions they've been able to record both of the cards.

Many thanks. Will do that