[Finance] Just got my 1st credit card in over 15 years

[HangletonGull]

Like others have said, I use my credit card for almost all purchases and pay it off in FULL every month. I've had credit cards since I was 18 and I have never paid interest.

I shop around for a new credit card deal every couple of years, to take advantage of the bonus points you get as a new cardholder. I mainly go for travel credit cards and I've paid for a fair few flights, hotels or upgrades with points. Also, the car rental insurance is very handy when I'm in Europe, much better than the rip-off coverage the rental companies try and sell me.

I also claimed money back for a pair of running shoes which got stolen from my doorstep recently. FedEx refused to accept responsibility, despite making no effort to check if I was home (I was) by ringing the doorbell. It's useful to have the credit claim to fall back on.

Also I’ve heard that the credit card is more secure than debit card

 

[jcdenton08]

Don’t see the point tbh. If the ambition is to pay it off In full each month then why are you using it in the first place?

To build credit rating, for added buyer protection against fraud for example and for additional consumer rights, for benefits such as discounts and air miles, and for genuine emergencies where one may need to make a large one off payment.

 

[WATFORD zero]

The actual quote was “PAY OFF THE CARD IN FULL EVERY MONTH AND IF YOU CAN'T (NO EXCUSES WHATSOEVER) DESTROY THE CARD.”

A credit card is a useful ally, if treated as cash money. There are a multitude of benefits from using credit. Increased buyer protection (after all, it’s their money), security in legitimate emergencies, value added benefits and so on.

If one’s bank account was, let’s say, emptied by scammers. Or you were robbed by hostile people. Or you were on holiday and your bank card stopped working. Or the company you wish to do business with like a hotel or car rental company only accept credit cards. Or a family member died and you couldn’t afford to help cover the funeral in one go.

A blanket statement such as “cut it up” is wrong. I never use my credit cards but I know they are there if, say, my girlfriend’s mother dies and I need to book an emergency flight to Canada to support my partner and I don’t have £3k last second fare sitting in my current account.

I agree it shouldn’t be spent as if it’s yours, but understanding credit is important and blanket statements like that don’t help.

And in every SINGLE situation that you have managed to define above I would still say 'AND IF YOU CAN'T PAY IT OFF IN FULL, THEN DESTROY THE CARD UNTIL IT'S PAID OFF IN FULL'

I suspect we're not going to agree on this

 

[jcdenton08]

I disagree to your disagreement!

You’d be wrong.

 

[newhaven seagull 85]

The actual quote was “PAY OFF THE CARD IN FULL EVERY MONTH AND IF YOU CAN'T (NO EXCUSES WHATSOEVER) DESTROY THE CARD.”

A credit card is a useful ally, if treated as cash money. There are a multitude of benefits from using credit. Increased buyer protection (after all, it’s their money), security in legitimate emergencies, value added benefits and so on.

If one’s bank account was, let’s say, emptied by scammers. Or you were robbed by hostile people. Or you were on holiday and your bank card stopped working. Or the company you wish to do business with like a hotel or car rental company only accept credit cards. Or a family member died and you couldn’t afford to help cover the funeral in one go.

A blanket statement such as “cut it up” is wrong. I never use my credit cards but I know they are there if, say, my girlfriend’s mother dies and I need to book an emergency flight to Canada to support my partner and I don’t have £3k last second fare sitting in my current account.

I agree it shouldn’t be spent as if it’s yours, but understanding credit is important and blanket statements like that don’t help.

Thanks for your reply, so your reply would have been better to be if you can not afford to pay off in full, then stop using the card, pay off as soon as possible, keep the card for emergencies only.

Unfortunately, it's very easy to get in the only going to pay off the minimum, and you end up spiralling out of control.

From a personal point of view they are only designed to help the banks/credit card companies unless you pay off in full each month.

 

[jcdenton08]

And in every situation that you have managed to define above I would still say and then 'DESTROY THE CARD UNTIL IT'S PAID OFF IN FULL'

I suspect we're not going to agree on this

No, because you aren’t taking my points in good faith. There are a lot of hypothetical scenarios I could give you where this would be a bad idea, and a credit card could be quite literally life saving.

 

[Badger]

Also I’ve heard that the credit card is more secure than debit card

It is, in the sense you're not actually paying for things yourself. The credit card company makes the payment to the merchant and if the card gets compromised you can flag all the transactions you didn't make and won't have to pay for them out of your money.

If a debit card gets compromised, it's your own money which is getting taken. Much harder to deal with and can leave you out of pocket.

 

[dazzer6666]

Don’t see the point tbh. If the ambition is to pay it off In full each month then why are you using it in the first place?
Yes they will keep upping your limit knowing one day the majority of people will use it and end up paying interest.

The post below yours explains why they can be a good thing if used properly.

As an example, I’ve had 3 free hotel nights (including free breakfast on all of them and a room upgrade on two of them) in the last few months simply from using my Hilton-linked barclaycard (total value around £1000), and also have a flight coming up soon to South America - in business class - that I only paid the taxes on plus avios, and a BOGOF companion voucher for the same flight (also in business) that is simply from using my Amex card. The flight value from the points is around £7000. The Hilton barclaycard is free, the Amex card costs £300pa. It’s incredible value.

The limits are pretty irrelevant - I very rarely get close on either of them (yes, they do keep getting put up).

 

[Justice]

Thanks for your reply, so your reply would have been better to be if you can not afford to pay off in full, then stop using the card, pay off as soon as possible, keep the card for emergencies only.

Unfortunately, it's very easy to get in the only going to pay off the minimum, and you end up spiralling out of control.

From a personal point of view they are only designed to help the banks/credit card companies unless you pay off in full each month.

The banks algorithms will know most people eventually use it in that ‘emergency’ situation and be unable to pay the amount back in full. My sister in law and hubby live on a credit cards spending beyond their means which seems ridiculously stupid.

 

[dazzer6666]

The banks algorithms will know most people eventually use it in that ‘emergency’ situation and be unable to pay the amount back in full. My sister in law and hubby live on a credit cards spending beyond their means which seems ridiculously stupid.

‘Most’ ? Around 2/3rds of cardholders clear their balance monthly.

 

[jcdenton08]

The banks algorithms will know most people eventually use it in that ‘emergency’ situation and be unable to pay the amount back in full. My sister in law and hubby live on a credit cards spending beyond their means which seems ridiculously stupid.

Those two points have nothing to do with each other. If you have an emergency situation, the access to credit can be life changing. If your sister in law and husband “live on credit cards” that’s unrelated and indeed stupid.

 

[Justice]

The post below yours explains why they can be a good thing if used properly.

As an example, I’ve had 3 free hotel nights (including free breakfast on all of them and a room upgrade on two of them) in the last few months simply from using my Hilton-linked barclaycard (total value around £1000), and also have a flight coming up soon to South America - in business class - that I only paid the taxes on plus avios, and a BOGOF companion voucher for the same flight (also in business) that is simply from using my Amex card. The flight value from the points is around £7000. The Hilton barclaycard is free, the Amex card costs £300pa. It’s incredible value.

The limits are pretty irrelevant - I very rarely get close on either of them (yes, they do keep getting put up).

I’m a bit old fashioned earn and buy. I used to have £1k in cash at all times in my pocket in the days people would pay cash for work done.
Sadly those days have evaporated.

 

[Justice]

Those two points have nothing to do with each other. If you have an emergency situation, the access to credit can be life changing. If your sister in law and husband “live on credit cards” that’s unrelated and indeed stupid.

Yeah I get your point but how many leave it in a draw for that absolute emergency?

 

[South Stand Bonfire]

You’d be wrong.

As the Fonz would say…

I was wr…
I was wro….
I was wron…

I wasn’t right!

It is actually an interesting thread to read people’s different opinions and there is no single right answer (other than my wife’s) imo.

 

[South Stand Bonfire]

It is, in the sense you're not actually paying for things yourself. The credit card company makes the payment to the merchant and if the card gets compromised you can flag all the transactions you didn't make and won't have to pay for them out of your money.

If a debit card gets compromised, it's your own money which is getting taken. Much harder to deal with and can leave you out of pocket.

A good point. My cc was compromised in November 24 when it showed someone in the Netherlands buying £170 worth of croc shoes . My cc company credited it within 5 minutes of me flagging it up to them.

 

[jcdenton08]

Yeah I get your point but how many leave it in a draw for that absolute emergency?

My partner is in Canada right now. Caring for her mother who has had her stomach removed with cancer. If she called and she “I need you here, Mum is dying” I’d be on the first flight out. That flight may cost £3-£4k. I don’t have that in a draw, or in a current account available to book on a flight.

I do however have credit cards available with £30k of emergency money, so I can book that, take care of what’s important, and deal with money later.

Do you see?

 

[Bry Nylon]

Just arrived not had one for years and was too young too have it back then , anyway advice best way to use it too build up my credit score thanks

Use it for hookers and drugs and then whatever is left before you hit your credit limit can be spent on luxuries.

 

[Jack Straw]

Can I suggest that you buy excess insurance cover for your car hire here in the uk before you go on holiday. You can get it for about £40 per year for European cover compared to the £100 or so the hire company will try and flog you. In my opinion the cover is essential as some car hire companies only make their money by flogging insurance or making up ”damage” to their cars at the end of the hire period. I’ve been there!

My mate I'm going with sorts all that out. I wouldn't say he's money savvy, but Martin Lewis goes to him for advice!

 

[WATFORD zero]

Like others have said, I use my credit card for almost all purchases and pay it off in FULL every month. I've had credit cards since I was 18 and I have never paid interest.

I shop around for a new credit card deal every couple of years, to take advantage of the bonus points you get as a new cardholder. I mainly go for travel credit cards and I've paid for a fair few flights, hotels or upgrades with points. Also, the car rental insurance is very handy when I'm in Europe, much better than the rip-off coverage the rental companies try and sell me.

I also claimed money back for a pair of running shoes which got stolen from my doorstep recently. FedEx refused to accept responsibility, despite making no effort to check if I was home (I was) by ringing the doorbell. It's useful to have the credit claim to fall back on.

Here is the perfect example of how to use a credit card, but the first sentence is absolutely key

 

[Flounce]

2

I’ve done that I’ve set it up to pay the min each month , should I up it to clear the balance?

100%

Assuming you KNOW that you can do it which means never buying something on it that you will struggle to pay in full. Being on top of your finances is essential to be able to do this with certainty.

Credit card charges are not something you want to ever get involved in imo. Crippling and ever mounting once they start