Like the sensible people here I have one that I use for spending (fuel, general shopping, bike bits etc) and it gets paid off in full every month.
A year or so ago I had a terrible credit rating due to various reasons, once all the crap had cleared off my credit reports I got a £200 limit credit builder card and used that every month and paid it off in full. Still have that same card only it's got a £700 limit now and my credit rating is now very good.
Having a good credit rating is never a bad thing even if you never plan on using it, but even then broadband/phone, utility providers, car insurance etc all do credit checks.
Tip for those trying to improve their credit rating is not to use over 50% of the limit on a credit card as this seen as a negative.
It's not I couldn't live without one, more I wouldn't want to.
For me, they only offer benefits - it's gets paid back in full every month plus I get points when I spend.
I used to use the debit card for contactless. but the CC is now contactless so everything goes through that.
I think it’s right if i can’t afford it I can’t have it.
So in this idyllic world, your car throws a turbo, taking out a valve. The bill is £1400. What exactly do STWers do? Or do you all have a spare couple of grand for this?
How about a boiler that dies and is £3500?
In the fortunate position that I do have cash savings to cover that. Well aware that’s a very lucky position to be in though, and it’s the first time in my life this has been the case, so certainly no judgement from me. I agree the high and mighty crowd are a bit odd.
Are they actually the majority in the world though? Or am I just a complete failure?
Neither. A small minority of people have savings equivalent to more than about 2 months net salary. If I’m being a bit of a dick then I’d say someone living in social housing is probably not sitting on a huge cash pile, and if they are they should get out of the social housing so someone who needs it can move in!
People on here are going to be above average earners, so it’s going to be skewed, and definitely above average for judgemental sanctimony.
I got an interest free for two years card, in order to buy a 2nd hand bike and wheelset with it. It's my first in nearly 20 years. Also been using it this month on lots of small things to avoid overdraft after Christmas spending. That wasn't really how I planned to use it, but no problem yet!
judgemental sanctimony
??
Someone asked a question.
They got lots of answers.
Some folk don't like some of the answers.
Having long term debt on a credit card means you won't be able to pay for that "emergency" engine repair or new boiler, whereas paying it off gives you a buffer for such contingencies.
There’s a very definite undertone in some (not all) posts though.
I’m sure many people would sooner pay off debt (not all), but having debt isn’t inherently an indicator that you’ve failed.
What exactly do STWers do?
Preventative maintenance helps.
Or do you all have a spare couple of grand for this?
I do, yes. Ok I have a company car but there is nothing that expensive in my flat I couldn't just get fixed or replaced if needed to at any time.
Or do you all have a spare couple of grand for this?
I don’t earn much but I do, yes.
It’s a sad state of affairs that people who are sensible are branded sanctimonious or “virtue signallers”. But then that’s how the CC companies and other lenders like it, isn’t it? People being sensible doesn’t line their pockets.
We've got 7 or 8 between the 2 of us, though that's increased recently as I have a couple of Amex cards as the benefits are way better than Visa/Mcard, but then need to have a MasterCard equivalent to hand for places that don't take Amex. All our spending goes on them, and we regularly refer each other for cards then close our own, to take advantage of referral bonuses and new card bonuses. It is a bit of a hassle and takes discipline but when the benefits in vouchers/points/cashback are in the hundreds of pounds worth every year it's worth it. Paid off in full each month and not missed a payment for over 15 years.
Also bought our last car on one at interest free, which is currently half way to being paid off. I have enough in savings to clear it now but why bother when that money is gaining me interest somewhere else and the cc costing nothing.
Got one, pay it off monthly. Always use it for purchases like flights, hotels. Had a flight to Bulgeria but the airline (Wizz Air) kept changing the times so I canceled. They refused to give me a refund even though the email said I'd get one. Claimed a full refund through visa, money credited to me in about 10 days. All I had do with send them a copy of my receipts.
Credit cards like alcohol. Used sensibly and they are fine. Wouldn't book anything except by CC.
As many others here I have one that we use and pay off in full every month - and get lots of rewards into the bargain. However after Christmas (and a couple of clients not paying large bills as expected) I couldn’t pay it off for the first time ever - £60 in interest for a £2k bill :-O no wonder people get into spirals of debt. Still, I’m fortunate in that mine is paid off now.
I have credit cards and pay them off in full every month
I have one credit card in my sons name which I use and pay off every month, this helps his credit rating
I sometimes use it when I get a good deal, I bought a bike at a really good discount which meant I had that bike that bike immediately, I paid it off over a year, which was a struggle, but I had a nice bike/and an asset I may not have saved up for but had to because it was on credit.
I guess its all about discipline and being sensible
So in this idyllic world, your car throws a turbo, taking out a valve. The bill is £1400. What exactly do STWers do? Or do you all have a spare couple of grand for this?
How about a boiler that dies and is £3500?
Pay it with a credit card, pay it off with savings. Would be screwed if the boiler blew up 2 months in a row mind. TBH if it was the boiler I'd put it on a 0% card and pay off slowly and keep my savings intact.
We were in the ‘pay it off each month’ camp until last year when our rental flat tenant stopped paying rent.
8 months later with no rent, court/legal fees for the eviction and a complete redecoration we have found the credit card very useful to keep us from going begging to the parents.
It’s amazing how quickly 2 months of wages (which I had saved) can disappear and whatblooked like minimal outgoings can suddenly seem a bit more onerous when you lose 25% of your income.
In this instance credit has been helpful to allow us to afford to pay for legal stuff and decorating, but I’d be properly worried if we needed to use it for food etc... and although we aren’t paying off in full every month we are paying a lot more than the minimum.
Mixed message I suppose but yeah, I think credit cards have a very useful place but I agree with the alcohol analogy used above.
I don’t think most are being sanctimonious but it does come across that way sometimes. By the same token the other side can appear belligerent but I’m sure they aren’t...
In my 20's I had credit card debt, not as much as some, but at around 2momths wages equivalent enough to cause poor sleep.
Now fully paid off and I still have the account with my bank, but card cut up and disposed off. If a suprise £3k bill came in I could get a new card sent out with a delay of a few days for payment if need be.
However once the CC debt was paid off aggressively I continued to pay myself that same amount of money into my investment savings account. It is amazing how much quicker your savings grow when they receive 7% interest compared to paying off a 4 figure sum plus 17% interest.
I don’t think most are being sanctimonious but it does come across that way sometimes. By the same token the other side can appear belligerent but I’m sure they aren’t…
I wonder if you could split the 'sides' 52/48... 😆
Debit card only here, carry two cards in my wallet - debit card and driving licence
Have amex, barclaycard and halifax clarity card but don't use them. Use the latter when I'm abroad only
I have one that I pay off each month. Earns a few points and had the protection.
I went daft with CCs and loans in my youth so have learnt the hard way.
Had a zero credit card balance until my daughter was a few months old and we wanted to buy a video camera so we would have some film of her crawling, walking and starting to talk etc spent about £150 on the card.....20 years later I have managed to finally clear my credit card off!!
Money was tight with a new-born, so the monthly repayments inevitably left us slightly short before payday and as soon as something unexpected happened i.e. washing machine packed up, car needed new tyres it had to go on the credit card.
The balance fluctuated over the years from a several hundred to a few grand but never got out of control or more than could be afforded, but it was just impossible to get it paid off completely.
I can see how people do manage to get themselves into huge levels of debit with them. I've switched a few times over the years when 0% deals have come up so usually had more than one card at once (usually only 1 had the balance on it) but have often had £20-30k worth of credit available to me at any point if I wanted to spend it. The temptation has been there at times just to buy something on the card and worry about it later.
The irony now that it's paid and I'm not having to make monthly payments on it I have more money available and don't need to use it, but its been a huge irritation to me over the years and I've wished many times that I'd never used it in the first place.
We buy everything on a John Lewis CC for the vouchers, which we then struggle to think of things to spend them on. Did manage to spend £25 on a reading lamp the other month.....
I use a posh Amex card for free travel insurance, rental car insurance, lounge access and upgrades with hotels/hire cars - with the amount I travel it makes financial sense. A bunch of their cards are charge cards (the green/gold/platinum) so have to be paid off in full anyway.
I don't see a problem with carrying a balance on cards over a couple of months, to buffer a gap (although I personally don't) - some people have money coming in in bursts (eg bonus coming in 2 months after xmas) so something to a sort the gap makes sense. Carrying a balance year-on-year is probably a sign you need to review things
always spend credit card online, easier to put a hold on a bad transaction than have the money out of your bank account and try to get it back
Point of note here for the "don't spend what you don't have" camp,
As others have mentioned, purchasing on credit card gives you additional protection. You can claim against the CC company if something goes wrong. But this also applies to partial purchases - so if you were buying say a £500 TV you could pay £499 in cash and £1 on the card and the card company will cover you for the full amount. It's worth having for that reason alone.
I have several cards acquired over the years, I've lost count now. All are zero balance and unused except one which has a couple of grand on it. I could pay that off tomorrow if I wanted, but it's on 0% interest for mumble years so the money is better off in my bank account earning what could laughably described as "interest." Aside from that card, all the others are set up on Direct Debit to pay in full at the start of every month (if I used them, which I don't).
There's a notion that all debt is bad. This isn't really true, but there is definitely good and bad debt. I've had both.
Like many, I learned the hard way. I got into trouble when I was younger and (more) foolish, a combination of an "ooh, free money" attitude and then losing by job meant that I maxed out a card with a limit of over ten grand (and also red-lined my overdraft). By the time I'd found employment again, the few days before my first pay cheque I was raiding the coppers jar to buy food. Over several years I managed to pay off the card - and it was a joyous day indeed when I did - and vowed never to be in that position again. Then I got married, mostly paid for on savings but a chunk across various cards. So I got a 0% balance transfer card and consolidated all the others onto it so that everything is in one place and not costing me anything, which is where the aforementioned balance came from. I'm happy with this.
Credit cards can be a very good thing used sensibly, but it's easy to lose control if you're not disciplined. Card providers don't exactly help, I got a letter last week from one telling me they'd upped my limit (unsolicited). Even though I already have several cards, I have no doubts that if I applied for another new one today it'd be approved without question. If I maxed them all out I could probably put myself in well over £20K's worth of debt, which is pretty scary.
I’m very disciplined with my cards but have been sooooo close to extravagant purchases for myself with them (E.g. new TV) it’s scary. I can totally see why people get carried away with them.
One good way of practising being disciplined with them it to get one on 0% for a single purchase and Cut up the card as soon as you’ve made the purchase
I did this with car insurance - total was £400 but paying monthly to the insurance co added a fair chunk of interest. Putting it on a 0% card and paying it off over 3-4 months meant I wasn’t paying it over a year and I had saved a decent amount in interest.
Pretty much every penny I spend goes through mine. Paid off every month (so far). If my car does spew its guts on the road or the boiler goes cold, I can fix it then and there - yes I'll pay a bit over the odds (cost of convenience and poor planning), but it beats walking to work and sitting in the cold until I can save.
As always those who truly need accessible credit - those far too poor to be on STW - are without it, leaving them to turn to Wonga or dodgy loansharks
This thread has brought a lot of people to the surface for paid off monthly type comments. But then the profile of the average MTBer is a middle-age guy in IT, so yeah likely they make a reasonable salary and therefore they can pay bills off.
Credit cards are generally a terrible way of borrowing unless managed well. For anyone who doesn't use it, moneysavingexpert will direct you to some decent cheap deals if you need to move, and also goes with the questions, Can I afford it? Do I need it? etc etc for guidance on actually using the things.
Personally, I've had one since I was about 18, did build up a bit of balance, but nothing a few months of paying it off didn't solve, lesson learnt, not really paid interest on one since.
have often had £20-30k worth of credit available to me at any point if I wanted to spend it. The temptation has been there at times just to buy something on the card and worry about it later.
I'm am certain I could get enough credit (cash transfers) and loans paid into my bank account almost instantly that I could just quit, pack up everything and set off bumming around like a hobo king the rest of my days and not pay any of it back. That's a big temptation.
But then the profile of the average MTBer is a middle-age guy in IT, so yeah likely they make a reasonable salary and therefore they can pay bills off.
Do you think this is the case or do you think middle-age IT guys just drive more expensive cars, have families, ride fancy bikes and live in slightly bigger houses so still spend most of what they earn?
Genuine question BTW, not having a dig. I earn double what I did in my first job (that's not a brag, more an indication of how poorly paid my first job was) and I still have very little left once I have paid for "essentials".
Are they actually the majority in the world though? Or am I just a complete failure?
its just people have different priorities.
i have been self employed all my life and seen recessions come and go and my income vary massively.
if there is another recession tomorrow or a no deal brexit i’ll be o.k. for a year if i pull the drawbridge up and cut any unnecessary spending.
you have fast motorbike toys and hire Ferraris to drive round the alps?
not something i would contemplate if i felt the future outlook was uncertain but everyone has different circumstances and outlooks.
i have a credit card, dont think i have ever not paid it off, have sometimes used a ‘flexiloan’ on my current account but thats because of cash flow or waiting for a tax year to end before paying myself or moving home and paying out for lots of things at once. the money is there to pay for things, it’s just not in my current account at the exact moment i need it.
never stuck anything unnecessary on a credit card though.
We were in the ‘pay it off each month’ camp until last year when our rental flat tenant stopped paying rent.
8 months later with no rent, court/legal fees for the eviction and a complete redecoration
Yep, we had that on the Wife's old flat, utter nightmare, probably cost £5k in all, if not more. Plus days off work for court, serving eviction notices, changing locks etc...
As others have mentioned, purchasing on credit card gives you additional protection. You can claim against the CC company if something goes wrong. But this also applies to partial purchases – so if you were buying say a £500 TV you could pay £499 in cash and £1 on the card and the card company will cover you for the full amount. It’s worth having for that reason alone.
Yep, if you're buying a used car, put the deposit on a CC then the rest pay however, that means the whole purchase is protected by the cc company so long as the deposit is over £100.
Oh? I didn't realise there was a minimum limit. How's that calculated?
I got one as a credit rebuilding card after a free spending wife and divorce left me literally drowning in debt. It very nearly did for me to be honest. Very dark days.
Took years to pay it all off, and even now, with no debt at all, I still have nightmares about it.
Great if you have financial discipline, however for the poorer amongst us they often prove too much of a temptation, and these are the people that the banks are trying to enslave.
I have one, 0% for a few years. I don't use it as often as I should, ideally I would buy everything on it, and pay it off each month, but I just tend to use my debit card.
The only time it really gets used is for holidays & on holidays. I paid for 6 flights recently & it's probably £2k all in. I'll pay it off over a few months, rather than using my savings, which whilst not exactly earning record breaking levels of interest, is earning me more than not having it in the account because I spent it on flights 🙂
I also have a car on a lease. Probably makes me a wreckless financial ticking time bomb according to some.
Oh? I didn’t realise there was a minimum limit. How’s that calculated?
The protection is only for purchases (or part purchases) of between £100 and £30k:
[url] https://www.moneysupermarket.com/credit-cards/guide-to-credit-card-protection/ [/url]
Do you think this is the case or do you think middle-age IT guys just drive more expensive cars, have families, ride fancy bikes and live in slightly bigger houses so still spend most of what they earn?
In fairness it was a bit tongue in cheek. I am after-all an overweight, middling age IT guy who owns a few bikes, although my MTB has seen little use over the last few years! This years that should change though as I no longer work 2 hours away from home.
I know some people who spend all and more than they earn, and others who live well within their means. I even put my foot in in the other day asking "Who has £20k sitting in their bank account?" after having seen a receipt at my local co-op showing that balance, my mate said, erm, me.
Personally I like to save what I can and pay my card off regularly, but my car cost £3k 7 years ago, I live out of the city so have an 8 mile cycle to work. My house will need a new bathroom and kitchen in the next few years and I REALLY need to get someone to come and sort out the vast apple tree in my back garden (needs a chainsaw taking to it as it's so bloody tall!). But I like to go away when I can so my money largely goes on travel!
Are they actually the majority in the world though? Or am I just a complete failure?
I’m a complete failure too! Just under £3k on an interest free credit card. Had to take extended time off work when my son was born. Savings gone, credit card used, only one okay wage. No savings and very little spare cash. Does worry me a lot.
I now try and live debt free apart from the mortgage so no credit cards for me.
When I was younger, early 20s, I got into significant amount of credit card debt. Took me years to sort it out. A lot of stress and worry involved.
I see the benefit of having them, especially if paid monthly. I just know I don’t have the discipline. Would end up with lots of shiny new stuff followed by a divorce!
Now being sanctimonious, answering an earlier question about middle aged IT guys....I’m 47, work as an IT contractor, never had any work gaps in over 20 years. Anyway, I drive a Berlingo on a 14 plate, wife has a 7 year old Kia. We live comfortably within our means, she’s a teacher earning an ok salary. I do have good bikes, three bikes with a total value of £11k.
We do sometimes discuss moving and getting a bigger house/mortgage, but haven’t done so yet. I don’t like where we live but I like the small mortgage.
I’m someone who suffers with the wants, I always want something new and different. Luckily my wife stops me being a spender. I’m that bad that I am just given “pocket money “ each week. If I want a big purchase I need to ask. I see it as an addiction, I look at the watch thread and think I’d like a new watch, or XC racing thread and want to buy a carbon hardtail. If I had access to the money I know I’d spend it.
Got 2 cards, one for purchases in foreign currency, one for day to day spending that gives me cash back once a year (usually get £450 cashback from it).
Pay them both off in full every month, so no interest paid.
Credit cards are exceptionally useful, and you're limiting yourself a bit if you don't use one, but you must be disciplined and pay it off before the 0% interest period has ended.
People who don't trust themselves or have got burnt in the past, why is it? "ooh free money", overly optimistic about your repayment abilities, or not knowing what you've spent?
I'm an engineering dork who is probably on the spectrum. I could probably list every expenditure I made in January. I can estimate a supermarket trolley (of items I buy) to within a few quid, even though I'm buying the food and drink I want to eat regardless, and know I won't have an issue at the checkout. I know my car's remaining range, intended travel plans, and when I'll be passing the cheap petrol station.
Basically, I like doing rough mental calculations for fun, but I want to know how other people's minds work.
overly optimistic about your repayment abilities, or not knowing what you’ve spent?
For me it's been over-optimism, partly along with a bit of greed maybe.... One minute it's all good, next thing you've kinda let it snowball and your card is at £5000 and you think "Crap what happened there" Mostly though it's i guess blinding yourself with stupidity. It's no different to eating a pack of jaffa cakes and not thinking about the calories. At the time the potential consequences don't seem to register.
I sometimes astound myself with how little disposable i have overall considering earnings, but i 100% know it's down to me and whilst i'm addressing the situation it won't be as quick nor as painless as the spending it was in the first place.
