I’m not a credit card user by habit, and have no balance on it at the moment. Went to use it yesterday to pay for a work thing before I claim back on expenses, and couldn’t find the card itself. I’ve cancelled that card now, but I’m struggling to think of any reason to not just close the account altogether.

Are there any emergency circumstances where I may regret not having that credit facility? Anyone else on here solely use debit cards for their spending?

Buying on CC gives you additional rights if you have a dispute with an arsy vendor, pay it off in full every month and it costs you nowt and boosts your credit score.

That plus any offers you get from the card. Cash back/airmiles/other rewards etc.

Also good for work stuff as it keeps it separate from your own private finances

I also found that in some places (abroad, Canada mainly) that they wilj only accept CC, not debit cards

You close a long standing good history credit card your credit file will lose that existing current OPEN credit history. It will still show on your credit but not as active credit history.

Anyone else on here solely use debit cards for their spending?

Pretty much the opposite, rarely use debit card, we use our credit card for everything, bar bits of petty cash, to maximise John Lewis vouchers we get in return.

I use a credit card for internet shopping as it isn’t linked directly to my bank account in the way that my debit card is. I have a standing order to pay the amount off each month.

I’ve used the credit card to buy airline tickets in an emergency when abroad, also hiring a car is easier with a credit card though I used my debit card when in Iceland last year.

We use the Tesco CC for everything. Then I trade the points for Evans Cycles vouchers at 2:1.

Offers such as cash-back, whilst not as generous as they once were, is surely a huge reason to keep the credit card. Put all the spend you can on it, pay it off in full every month and get money/offers for nothing. Why would you not want to do that?

When is a credit card better than a debit card?

Keep it. Car hire with a debit card is (very) difficult.

Lunch time ends, so cheers chaps, some reasons I’m not bothered about, but there’s a couple of good ones there too. Planning on going to Estonia this summer, a credit card might be a bit more acceptable there in an emergency.

I think on balance I’ll keep it, as there’s no annual fees or anything. Ta.

For all the reasons stated above, I only use a debit card for getting cash out of atms. Credit card for everything else.

Use Amex for most things, airmiles and best insurance. Automatically cleared down each month by direct debt. Spend today and pay in 6 weeks. What’s not to like ?

As above CC used for car hire etc. I have Amex plus one each of VISA and Master C. Try and avoid debit card as why pay ontime ?

Pretty much the opposite, rarely use debit card, we use our credit card for everything, bar bits of petty cash, to maximise John Lewis vouchers we get in return.

This is what we do, barely use debit card, especially now that the CC has gone contact less.

+ improves credit score + gives you some buyer protection.

Anyone else on here solely use debit cards for their spending?

Credit card for everything. The only time the debit card makes an appearance is to pay off the credit card

I get the pay-it-off at the end of the month to get vouchers, payment protection and such, but I really don’t think I’m that disciplined. Now, it I don’t really need it/can’t really afford it, I just don’t buy it, not sure that would work if the spending was deferred.

I NEVER use my debit card when buying online (or anything else, come to that) – don’t want my bank account been scammed.

@tthew I *think* you can request a lower credit limit, so you could simply align your credit limit with your usual monthly budget. That way you can’t accidentally spend more than you can afford to pay off, but still get the benefits of the credit card.

@tthew You set up a direct debit/standing order and it’s just done. As above just set a credit limit that you know you are going to be able to afford to pay in one go so that you don’t go overdrawn on your bank account and incur charges which would negate the benefits.

I’m like the OP. I only got a CC to attach to my PP account. Pay it off when the bill comes. Suspect it may be handy one day.

I previously only used actual cash money for the pub, but now Apple Pay and contactless has come in and is pretty much wide spread these days, I don’t even use it for that, so am pretty much almost completely cashless in my spending habits. I’m now considering using a credit card rather than debit card for disposable spending by setting up an instruction to pay it off every month. So this way I retain one-months worth of disposable income in my account before paying off my previous months spending just before my next payday comes in. That way I accrue a small (miniscule) interest benefit and it offsets my mortgage balance and so paying less interest on my mortgage.

That way I accrue a small (miniscule) interest benefit and it offsets my mortgage balance and so paying less interest on my mortgage. [/I]

Do an actual calculation, and you’ll probably see it makes next-to-no difference.

So I have an old card with zero balance and one which is about to be zero’d; do I cancel the accounts or leave them open? I’m never going to spend on them again and one card is destroyed – they were old balance transfers – but I dont want to knacker my credit file.

I *think* you can request a lower credit limit, so you could simply align your credit limit with your usual monthly budget. That way you can’t accidentally spend more than you can afford to pay off, but still get the benefits of the credit card.

you can try, but IME they’ll whack the limit back up the following month. When I was skint I felt that HSBC were trying to tempt me further into debt with a massive credit limit. I asked them to reduce it, which they did – for one month – before putting it up to more than my entire annual income 😡

(which they well knew, since they also held my current account)

So I have an old card with zero balance and one which is about to be zero’d; do I cancel the accounts or leave them open? I’m never going to spend on them again and one card is destroyed – they were old balance transfers – but I dont want to knacker my credit file.

Close one, and keep the one with the smallest credit limit.

Buy £20’s worth of petrol on it once a month and pay off at the end of the month.

I have one credit card, a Halifax Clarity, which I got solely for use abroad. Zero fees or commission for foreign currency transactions or cash withdrawals (interest charged on cash, but only for the week or two til you pay it off) and the exchange is done at the bulk rate, so way better than bureaux de change. Makes holidays so much easier. I haven’t had to change money first or worry about how much cash to carry since.

jb72 – Member

Keep it. Car hire with a debit card is (very) difficult.

It really isn’t.
I’ve never had a credit card and it has never been a problem. 🙂

[So I have an old card with zero balance and one which is about to be zero’d; do I cancel the accounts or leave them open? I’m never going to spend on them again and one card is destroyed – they were old balance transfers – but I dont want to knacker my credit file.
Close one, and keep the one with the smallest credit limit.

Buy £20’s worth of petrol on it once a month and pay off at the end of the month.]

I have a credit card as my regular card so this isnt necessarily of use to me. I guess the simple question is, does closing a CC account negatively impact credit file?

I have a credit card as my regular card so this isn’t necessarily of use to me. I guess the simple question is, does closing a CC account negatively impact credit file?

Yes, No, Maybe in this case mostly no.

I’m sure I’m starting to annoy everyone with my little financial tirades, but there’s a lot of smoke and mirrors, outdated info and straight BS with ‘credit scores’ – and it’s started by the credit card companies.

There are 3 major criteria for underwriting.

1. Asset Security – this only applies to property (good risk) vehicles and large assets (fair risk) and consumer debt (no asset security at all).

2. Credit History. Does the customer have good history? Does the customer have poor history, does the customer have no history.

If you have only good history (don’t worry about a single forgotten payment if there’s not a pattern of missed payments) than settling some off won’t matter. If you have poor history (lots of missed payments without arrangement, Defaults and CCJs) these days unless you’re perfect or close to perfect you’re effectively removed from the prime lending market – forget about it.

Time was you could, if you stop missing payments, mix your bad with some good to even out the ‘score’ – go 6 months late on HP, miss a mortgage payment, ‘forget’ to pay Barclaycard a couple of time a year? Okay stop doing that, bring your house in order and get a high rate card, be a good girl or boy for 6-18 months and your ‘score’ will rise from the ashes – these days though it doesn’t help enough to lift you back to ‘prime’ and there are only two markets – prime, and sub-prime and prime means perfect (or close).

Where is really helps is the ‘no history’ market – if you’re young, live at home or never borrowed then you don’t have any history – that can be a problem if you want to say HP a car because you’ve just started your first job or you want a mortgage for your first place – 6 months of paying on time will give you some history.

3. Affordability – can the customer realistically pay back what they owe now, AND the new proposed debt and leave enough for a lifestyle?

This is THE biggest aspect these days, this is the thing we forgot about prior to 2009 – the US sub-prime crash started it, but it was the staggering amount of consumer debt and more importantly the amount of debt compared to income that made the recession so long and hard.
Back then if you’re history was good, they just give you more – the fact they gave £20k limits on ‘Gold’ Cards to people earning £14k a year working in a shop or £500k mortgages to a couple earning £60k a year combined is what **** it all up and they’ve been made to suffer – there was, and is an explosion of people willingly becoming bankrupt and why the hell not? If you stand before a Judge and say – I have assets of £500, income of £20k a year and owe £20k in unsecured consumer debt, the Judge might rightly ask if your creditors, who should know your income, will know your other debts and can make an educated estimation of your expenses – lend you more than you could ever pay back? So they give them £50 a month for 3 years and call it quits.

Anyway, so affordability is very importantly – if you want to borrow money the bank/finance company must consider – can they pay it back, and credit cards and over-drafts make this difficult.

For example – I’m presented with a customer – they currently owe £2000 and are repaying £200 a month to service that, their income is £2000 a month, their rent is £800 so they’ve got £1000 a month for living expenses and bills. This new debt is going to cost them £200 a month – my underwriting criteria says that for their demographic (single, no kids, private rent) they need £700 for living expenses – okay that’s fine then. BUT, the £2000 they owe is held on 2 credit cards, £1000 on each – not too crazy, but they have a limit of £5000 on each.
This is a problem – I could lend them the money they’re after and the very next day they could go mad, buy a motorbike with one and a jet ski with the other and suddenly they’re insolvent – they go bankrupt, we lose it all, there is no ‘we got in first’ clause’. So I have to consider this – I have to gamble that they might borrow some more on the cards, but not so much as to make themselves insolvent. I can’t make the calculation based on them buying the jet ski and motorbike or I’d never underwrite anyone – but I have to give it a weighting – so I allow 50% limit on each – suddenly their debt is now effectively £5000 which would cost them £500 a month and then they couldn’t afford the debt – it’s declined.

It’s worth considering that the underwriter in this case would be a bit of software, not a person and they will NEVER tell you why they turned you down as this would give away very valuable underwriting data to their competitors and invite people who are trying to beat the system which breaks the system.

Simply put, having unsued credit limits of any kind will limited your affordability rating and may mean you are refused credit you can afford, in case you go mad and you can’t anymore – it’s a risk adverse market at the moment.

whitestone – Member
I use a credit card for internet shopping as it isn’t linked directly to my bank account in the way that my debit card is. I have a standing order to pay the amount off each month.

Don’t you mean a Direct Debit?

A STO is a fixed amount that you pay or ‘push’ to someone else. A DDR is an unfixed amount that someone else ‘pulls’ from your account.

@MTB-idle probably 🙄

Simply put, having unsued credit limits of any kind will limited your affordability rating and may mean you are refused credit you can afford, in case you go mad and you can’t anymore – it’s a risk adverse market at the moment.

This is very useful information, thanks.

Simply put, having unsued credit limits of any kind will limited your affordability rating and may mean you are refused credit you can afford, in case you go mad and you can’t anymore – it’s a risk adverse market at the moment.

With my online bank account, they have a loan (car or personal) thing which shows you how much you can borrow instantly based on what they know about you (i have main current account, 2nd current account and credit card with them). A while ago I checked what I could borrow out of interest, later I closed 3 or 4 credit card accounts with other providers i no longer used (high credit limits but zero balance) and I just checked again yesterday and the money the bank would now instantly lend me is frighting, about 2.5 times the earlier amount. Nothing else has changed over this time, maybe about 6-7 months.

i love my cc as long as you know how to use it, i.e. nipping it in the bud before the interest. use it for all things except petty day to day stuff.

that said im going to look into one that gives some rewards like air miles or vouchers etc. my current one does not.

Never had a credit card here… and hiring a car really isn’t difficult without one. Never seen the reason to have one, don’t spend what you haven’t got is the principal I guess. Managed to get to 42 on that principal anyway!!

It is indeed, thanks P-Jay.

Previous comments made. Do not close your credit card simply lower the unused credit limit to keep the card open and reduce your level of unsecured credit availability to potential lenders of any type of credit.

Anyone else on here solely use debit cards for their spending?

Me.

Cancelled my HSBC card when I switched to FD a few years ago and never bothered to get a new one.

Been thinking about it recently, but there’s not really been a downside for me.

You should never use a debit card online, there is no fraud protection. I would not trust any online shop’s database with anything other than a credit card.

Not so bad these days with PayPal and Google pay but would not want to be restricted to just shops with those.