debt, wtf is happening ?

[eidolon]

I take the same view as Jez/Tesla etc.

I have the mandatory mortgage but apart from that I own everything else outright. There's nothing really that I want so badly that I couldn't wait while I save for it.

 

[ste_bla]

Personally I think anyone with several CCs and loans needs to get a consolidation loan ASAP and sort them out, I did it 5 years ago, best decision I ever made.

Ah yes, I had a friend who did that, however due to the lack of self control went out and maxed the cards again!

 

[meghatronic]

Ah yes, I had a friend who did that, however due to the lack of self control went out and maxed the cards again!

Sounds like my sister....

 

[FakeSnake]

Your friend should have cut the cards up as soon as they were clear.

I only have 1 CC, which my Wife and I use for all our day to day stuff... petrol, food, other purchases. We average about £1500 a month spend. This is comfortably covered by our salaries, its just a convenient way to get free money! Its a Tesco Platinum card, with 15k limit. We have purchased things like our whole kitchen and AGA, paid for gardenning services to car servicing.

Clubcard points are a bonus, as the balance of the CC is paid off every month, all our points are FREE!!!! we average £40-80/quarter, depending on any major purchases.

 

[iamgud]

Yup , the only thing I would buy on Credit is a House, maybe a car if I really wanted an even better one. (but I already have one and don't plan on changing it for ages )

Or if I was in a really tight spot. But even then it would be only till the end of the month till I got paid and I would pay it back before I have to pay anything.

If you constantly owe money then you are constantly paying more for everything so you get less overall in the end.

Be Smart.

 

[Scuzi]

Your friend should have cut the cards up as soon as they were clear.

I only have 1 CC, which my Wife and I use for all our day to day stuff... petrol, food, other purchases. We average about £1500 a month spend. This is comfortably covered by our salaries, its just a convenient way to get free money! Its a Tesco Platinum card, with 15k limit. We have purchased things like our whole kitchen and AGA, paid for gardenning services to car servicing.

Clubcard points are a bonus, as the balance of the CC is paid off every month, all our points are FREE!!!! we average £40-80/quarter, depending on any major purchases.

That's what I'm using my new card for. I get airmiles with every purchase and on my calculations should average a free flight home every two months. I also get two free flights worth of airmiles for applying

Credit cards can make very good sense. If used properly they can save you a fortune and all it takes is a bit of self control. The people who immediately declare all credit cards as evil are the ones who lack the self control

 

[triggerthat]

I have a student loan unfortunately as well as a large overdraft which I don't use.

I was considering getting a credit card so I can work on getting a good credit rating. Am not sure if my overdraft effects CR. Anyone know?

 

[Haircut]

I hate the thought of getting into debt. Everything I buy is bought with money that I have at the time.
The only money I owe to anyone is my student loan which is now down to under £4K and should be paid off within 18 months. The only reason I still have it is that I get a better rate of interest on my savings than I pay on the loan!

When I come to buy a house I know I'm going to have to get a mortgage, but I plan never to get into any other sort of debt, even for a car.

 

[cheets64]

I like the way people say its the banks fault, the bank is a business and its going to give out its products to make money, every business does.

Its like saying fat people blame it on the staff at fast food places or supermarkets for selling them fatty foods.

 

[Mr Gimp]

I've got one credit card and the only reason I use it is for internet payments (which get paid back straight away from the current account) and occasionally smacking unexpected outgoings (car etc) on until I next get paid. I have a friend who is in so much debt that when his wages go in each month he's merely paying off a small part of his debt but then racking it back up in the commencing month. Stupid really.

 

[n3vrmind]

Credit cards are pure evil

I was pretty much the same as the OP for a long time, never paid for anything on credit, had a single card that was there for the just in case scenario like work messing up and me not getting my salary on time or being hit with something unexpected, then it would be paid off immediately

its far too easy to get used to having it though and a couple of years a go i started using it a little more and clocked up £1k, cleared that and its a lot less fun paying it back

right after paying it off i went and bought a flat and pretty much all the spending involved at the time (fees, furniture, cooker etc..) went on the card, then a complete set of tires and brakes and a damaged alloy, then out of bad luck i had to put some other stuff on there and hey presto its now at £4k and will probably take 2yrs minimum to clear it, easily done... thankfully i might have a solution to this but if not ill be forced to sell my car to clear it

my advice, avoid them like the plague. setup a savings account and put a few thousand aside as your fallback. id most certainly cancel all those cards you have except for one until you have some savings and yes you might have credit available to you at the drop of a hat but when it comes to buying a property any credit you have will come off what you can have on a mortgage and when you get to that point having some savings will be a big plus

 

[wolvotim]

I must say thats very commendable, i know how hard it is to stop buying what you want and have to put it away for bills or payments, to do it for that much money is a pretty good achivement. Must have been a nightmare not buying anything for so long that you wanted.

Thanks mate Ive learnt my lesson well and truly all the credit cards have now been cut up and cancelled

 

[Homer-Simpson]

I like the way people say its the banks fault, the bank is a business and its going to give out its products to make money, every business does.

Its like saying fat people blame it on the staff at fast food places or supermarkets for selling them fatty foods.

It depends on the situation, my uncle kept on getting in debt. The banks were giving him credit cards/loans and he wasnt even asking for them. The problem was my uncle was mentally ill and an alcoholic. The alcohol stopped his medication from working and one thing led to another and he would just spend stupid amounts of money.

My dad kept on bailing him out - my dad/uncle went to the banks and explained the situation and asked them to stop giving him credit cards/loans but they kept on doing it.

In the end my dad said enough was enough and my uncle declared bankruptcy. Even though he had declared bankruptcy they still sent him credit cards.......

My dad tried to help out his brother so many times but no matter what he did it didn't help

 

[bottletop]

It depends on the situation, my uncle kept on getting in debt. The banks were giving him credit cards/loans and he wasnt even asking for them. The problem was my uncle was mentally ill and an alcoholic. The alcohol stopped his medication from working and one thing led to another and he would just spend stupid amounts of money.

My dad kept on bailing him out - my dad/uncle went to the banks and explained the situation and asked them to stop giving him credit cards/loans but they kept on doing it.

In the end my dad said enough was enough and my uncle declared bankruptcy. Even though he had declared bankruptcy they still sent him credit cards.......

My dad tried to help out his brother so many times but no matter what he did it didn't help

I hope your dad persuaded his brother to withdraw as much cash from the cc's to pay him back what was owed just before becoming bankrupt.

 

[Jez]

To get the better vehicle straight away and not throw £2000 away The best way to buy a good car (assuming you not got £10k sitting around) is to see what your can afford monthly, decide what period you want to pay over then decide you budget.

Blowing £2k on a bucket worth nothing inside 3 years while paying tax, mot, service's and petrol is a MASSIVE waste of money - if your aim is simply to save up to get the "better" car.

Sometimes credit makes sense when its around 4%.

I agree low rate credit does make sense, but re the vehicle, the reason i picked that lower figure was due to the fact that you can get a very nice car for not much money, people seem to get themselves into debt with vehicles for nothing - i cant understand it. Its fair enough if you will definately be able to always afford the payments, but a lot of people get themselves into a situation where they cant afford the repayments, and the car is worth a lot less than they owe on it :/

 

[Dolph]

I don't trust myself.

Fair enough, but don't take everyone who uses credit to be dumb

Or people with self control...

You can use credit perfectly sensibly and with self control. Credit, ultimately is a service like any other, how you chose to use it is up to you. There are many times when it's sensible to use credit rather than spend cash, even if you have it available. (Such as when buying a car, you can often get a finance deal that works out better to leave the money in the bank and take the finance than to withdraw your money and spend it. It's what I'm doing for a chunk of my next car).

If you have self control then why do you buy things on credit rather than wait until you have the cash...

That's a very negative view of credit. You can manage your credit spending just as you can your normal spending, with self control and with sensible behaviour. Credit is not a bad thing, owing people money on agreed terms is not a bad thing. There are certainly times when it's bad, or when it makes no sense at all (store cards with an apr of 30% spring to mind), but credit itself is not bad.

 

[Von Luck]

I'm of the same opinion as Dolph - credit isn't necessarily evil when used in moderation.

I did get myself in slightly too deep when I was younger, loans for motorbikes, credit cards etc. Nothing massive (like some on here) but more than I felt comfortable with. Took me 4 years or so to clear it and taught me a valuable lesson. That was 6-7 years ago and I've always been sensible since.

I use a credit card, but not in the way the cc companies would like you to. I buy most things on cc as it offers me 1% cashback and repay the balance in full each month, at the end of each 12 month period I get given free money as a result.

I'll happily take out a small loan for a new car - you just need to make sure the repayments are within your comfort zone and that should your circumstances change (losing job etc), you can clear the debt - so for car loans I would only ever finance about half the value of the vehicle to ensure the resale will always exceed the outstanding balance.

I'd also only have one loan at a time and only take them out over 3 years maximum. Multiple loans are the start of a slippery slope and long repayment periods mean that by year 4 you could well be looking to replace the item you originally purchased.

 

[The Mad Rapper]

Also I had an idea, a I'm moving in a year and half abroad what would stop me from rinsing the accounts and not paying back? How long would it take for them the write it off? Could they come abroad and find me?

One other question is not using them some how damaging my credit rating should I close some?

You used to be able to get away with this, but now you can't.

Many companies that provide credit history checks (Experian et al) have branches overseas. Where they don't, they have reciprocal agreements with similar companies in those countries.

If you applied for credit elsewhere, they'd obviously need your past address history, which they'd then check against the established records. That would set the alarm bells ringing, but worse for you would be the fact that the companies to whom you owed money in the UK would now have details of your new address overseas. it takes 10 minutes then to sell your debt to a collection agency in your new country and you are royally screwed.

So don't do it

 

[Stiff_Cookie]

I have no problems with credit cards at all.

I have several of them but only use two. I use one mainly for day to day purchases and the occasional purchase of a game or DVD that I dont have the money in the bank for. The other one I use primarily the same way but it is a store card.

I dont like owing money so I tend to pay off my cards pretty quickly. I am also working on having all of my bills (Internet, phone etc) billed straight to my credit card. That way each month I only have to pay one bill.

It really irritates me for some reason when people say that CC are the devil or are bad. There is nothing bad about having and using a credit card. As long as you make at least your monthly payments than you wont get into trouble with them.

 

[James_N]

you can get a very nice car for not much money, people seem to get themselves into debt with vehicles for nothing - i cant understand it.

Thats what i did about 12 months back. I bought a CTR and financed it, ran it for 6 months and thought "why am i doing this". The car wasn't that good, and although i could afford the repayments, it was a larger chunk of money going out every month than i would have liked. So i got a bank loan, paid the finance off, sold the car, and paid the bank loan back, and got my old volvo to run around in. Best decision ive ever made as im now saving everything i earn

But thats the only debt ive got into, and it was "manageable". Ive always been fairly carefull with money.