Same here and from my experience is a good thing lots of credit that you use and manage well has had a positive effect for me.
Too many credit cards? aka "The Credit Card thread"
- Thread starter robfosters
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Caporegime
The credit card company needs those people who are not financially responsible...it's how they make their money. The key is not to be those people, but be the opposite end where you take advantage of all the perks. The key is self-discipline and playing by the rules and maximising them.
Then you start to take money from them, rather than the other way round.
How do you take money from them when you're spending. "I would have spent it anyway" sure you would.
Caporegime
This is where the discipline comes in. I am not buying things for the sake of air miles or cash back. But if I am buying petrol anyway....put it on the card. Then i am getting the cash back or air miles in return as i pay the balance in full.
It cost the same whether i pay in cash or card, they take their % fee from the retailer, not from me. That's not my problem. So i get that tiny percentage back in cash back from them, that i wouldn't have from debit card or cash.
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Soldato
Yep, very true. If you can be that person and make it work for you then great.
I just tend to find that I'm happy just keeping to what I have in my account and saving up for anything really expensive that I really want.
We are all different and manage our finances differently though.
Soldato
Only debt we have is the mortgage, which is kind of unavoidable if you want a house.
Like you, probably will get it paid off in the next five years or so.
Soldato
Yeah that and I even bought my car on a credit card (14k and bought over 3 cards.... Some dealerships do take them!)
As you say it requires finance /discipline /Consideration but I have moved around about 10k at least in credit card debt for 0% balance transfers for over 5 years at least, whilst getting high level mortgages (4.75x combined income).
No idea why people would pay interest (eg home improvement loans, car finance %) when there's ability to do it this way.
Caporegime
If I have a large purchase, even if I have the money, I would still rather stick it on a 0% card and keep my money earning interest.
That way I get the protection. I get the reward points, I get money earning interest.
Cash is not king, cash means you lose on 3 aspects of it.
Not strictly true. Credit ratings at agencies are adjusted for the longest time you have held a credit card and total credit limit. The advice they give is to try and build up to a £15k limit for the best credit rating.
But yes, 8 is too many. I would bin most of them but keep the longest held one and obviously keep the one with the cheapest interest rates but consider keeping the one with the biggest credit limit as well.
Twice. Once was for new oak flooring we bought for the hose we were doing up. We had the money sat in our current account and gf was about to use our debit card and I said no, use the credit card as that way we are protected and just pay it in full when the credit card bill lands. Roll on 6 weeks when we were due delivery and the shop chain went bust. Was easy to get our £5k back in full in less than a week.
Associate
Have 4 here, for various uses.
Amex for cashback, mbna which had a 0% purchase on which im 3 months off paying off (effectively made purchase on it then made a standing order to pay it off before zero percent ran out). Then my bank one which i use for foreign payments as commission free and does it pretty much at visa rste. Then 1 which i need to close as no use for but keep not getting around to it!
Only have a small amount on credit, enough that i can put payments on then pay off with current account next month so dont actually get charged any interest and working on gradually getting this down to zero.
Currently going through a section 75 for a bathroom refit as plumber went into liquidation during the job so hopefully that will have had its use there pending the outcome.
Amex for cashback, mbna which had a 0% purchase on which im 3 months off paying off (effectively made purchase on it then made a standing order to pay it off before zero percent ran out). Then my bank one which i use for foreign payments as commission free and does it pretty much at visa rste. Then 1 which i need to close as no use for but keep not getting around to it!
Only have a small amount on credit, enough that i can put payments on then pay off with current account next month so dont actually get charged any interest and working on gradually getting this down to zero.
Currently going through a section 75 for a bathroom refit as plumber went into liquidation during the job so hopefully that will have had its use there pending the outcome.
Soldato
I don't have a credit card at all.
Caporegime
I pre-ordered a Nendoriod from a UK company during the pandemic back in July 2021, it was due for release in August 2022. But they went bust. I bought it through PayPal but my PayPal is linked with Amex.
PayPal wouldn’t entertain my claim as I put in the claim in October 2022, when I noticed “where was my order” moment, as I almost forgot. PayPal only would refund within 6 months of purchase…so a pre-order really have no paypal protection.
I called Amex, told them the company was liquidated (their website showing the message) and they refunded me on the spot. It was only about £50 but still, great service.
PayPal wouldn’t entertain my claim as I put in the claim in October 2022, when I noticed “where was my order” moment, as I almost forgot. PayPal only would refund within 6 months of purchase…so a pre-order really have no paypal protection.
I called Amex, told them the company was liquidated (their website showing the message) and they refunded me on the spot. It was only about £50 but still, great service.
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That's why I do due diligence myself on companies before I make any large purchases. E.g. look at annual accounts, check financials etc.
Makes sense. £40k on credit at 0%, pocket the interest on savings and clear the debt before the rate changes. Now savings rates are good you could literally make a few grand with £40k saved.
Caporegime
It still doesn’t negate the protection the law offers with credit card purchases. It’s like “I drive carefully so I don’t need to wear seatbelt” isn’t a reason not to wear one, besides you are legally obliged to.
Soldato
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That sounds bonkers, just use a credit card
It's really not bonkers.. it saves me a lot of potential stress down the line.
Plus some companies don't take credit cards, and only take bank transfer. E.g. I bought a cabin and paid by BT around 15k. I did about 10-15hrs of due diligence before buying, checking everything on the Internet about the company plus the people running it.