I’ll be frank, i’m a credit card virgin. I have never needed one but after a talk last night with my brother im looking into it.

I’m a bit confused on all the talk. I see for example “interrest free on purchases for 6 months”

Does that mean i make a purchase and i have 6 months to pay it back interrest free or i get a honey moon period of 6 months interrest free and anything after that i pay ?

It often means that as long as you make the minimum payment each month (based on the amount on the card)then you incur no interest charges for the period stated.

If you don’t need one then why get one?

They are handy things as long as you pay them off in full each month 😆

I would perhaps start with who you bank with first.

If you don’t need one then why get one?

The old chestnut. because if someone’s offering you interest free money, allowing you to use your cash for better uses AND YOU KNOW YOU CAN PAY IT BACK, why wouldn’t you? I keep my money in my mortgage instead and save interest on it.

You have to read the small print, might be 6 months interest free but purchases have to be made in a certain period after account opening – but the last one I had like that was 0% on purchases for x months from account opening with no restriction on when you actually purchase. So if you get the card and then straight away buy something on it – rate = 0% for x months give or take. If you get the card, keep it for 3 months, and then buy something – you get x-3 months to pay it back interest free.

And you have to beware, because if you don’t clear the balance in full, you can then start to get interest on the whole of the purchase value – eg if you spent £1000 and have £100 remaining, I *think* (again, in the small print) that for the first month at least after interest applies, you get charged for interest on the whole £1000.

Im going to Vegas in September.

Need a credit card for checking in at the hotel and for when i pick up the rental car.

Im going to Vegas in September.

Take it nowhere near the casino

Read all of the small print, but pay off at the end of the month anyway 🙂

As someone has already pointed out – all Credit Cards are interest free if you pay them off each month. You’ll get Purchase Protection thrown in (which can help in the event of any issues with the retailer) and if you get a card with some sort of Reward Scheme you can even get something back on all your purchases.

also interest free doesnt mean there isn’t an initial charge, like lots of transfer offers. ‘interest free but there is a 3% initial fee’

be wary

So say i buy a frame at £1000

I have say 6 months interrest free on that purchase, so i can basically wait 6 months to pay it back and not have to pay interrest ?

Then after the offer period, i have a certain amount of days to pay money back again interrest free ?

If i was to keep paying things off within the time frame and thus not pay any interrest will that affect my credit rating good/bad ?

also interest free doesnt mean there isn’t an initial charge, like lots of transfer offers. ‘interest free but there is a 3% initial fee’

normally if you’re transferring a balance, nobody would charge you a fee on a new card with nothing on it.

Indeed

But Balance Transfer cards can be good

Lloyds have one at the moment which will do 21 months “interest free” for a 3% fee – but with half of that cashbacked.

This means 1% a year interest providing you don’t touch the card for making purchases until you are ready to pay the whole lot off.

That is a tiny bit of a bargain.

theotherjonv is quite right if used correctly then can be very useful.

Given you are looking to use it abroad I would further inquire as to their charges for this.

I was surprised by the charges of some.

I’m not really looking to use it abroad – its used at the hotel and hire place. They hold an amount something like $300 on the card if you mess the place up or something.

Discipline is key. If you know you’ll be good to clear the balance in 6 months time, then go for it

Not sure I’d get one just to borrow. Might be 6 months interest free, but I think if you forget to (or just can’t) pay it off, the interest you pay is backdated to the original purchase? (maybe I’m wrong there). As above – discipline.

I know quite a few people that have so far refused to get a CC, saying they don’t want one, don’t need one, because they’re never going to borrow on it. In this day and age, since half of what you buy is online… GET ONE! Pay it off in full monthly by DD. No costs, and you have that extra protection from scammers, who can’t directly raid your bank a/c! Oh and very helpful in hotels, and virtually essential when renting cars.

Get one with cashback.

Mine is with Capital One – I get 1% cashback and I use it for everything so the bill is around £1500+ a month.

I pay it off in full each month.

And then each January I get a sum credited to my account – last January it was £380.

http://www.moneysavingexpert.com/credit-cards/best-0-credit-cards

If you do get one, set up a Direct Debit to pay it off in full every month.
Credit card interest rates are outrageous.
As long as you’ve got the money in your bank account, you will end up paying no interest this way.
If you’re spending money you haven’t got, an overdraft on your current account is the cheapest option.

Devils work, avoid if at all possible.

Devils work, avoid if at all possible.

not necessarily. Doesn’t it improve your credit score? I’ve heard of people being refused credit/mortgages because they have no credit history despite being really good with money. The lenders have no history on you

I also use the Capital One cashback card. DD to pay off in full each month. Nice credit in January that pays for some Chrimbo shopping.

Not sure if they still have the same opening offer but I got 5% cashback for the first three months upto £100, which is easily done if you have a large purchase looming.

Not sure if this is still the case but you are better protected using a Credit card as opposed to your debit card. As long as you don’t view it as credit, then it makes perfect sense to do all your spending on a CC (do not draw cash on it though).

It might have changed now but the c/card companies used little tricks like this – you do a 0% thingy/purchase/transfer.

Then you use the card for something else, say, some forks for £400. You pay the £400 off at the end of the month thinking you’ve paid the forks off. You don’t, that £400 doesn’t go towards your forks ‘cost’ but pays off your 0% balance and you’re getting interest charged on the £400 outstanding from the forks.

If you do the 0%, don’t use the card again.

Not sure if they still have the same opening offer but I got 5% cashback for the first three months upto £100, which is easily done if you have a large purchase looming.

Yeah when I opened mine it was 3% for three months with no limit.

Not sure if they still have the same opening offer but I got 5% cashback for the first three months upto £100, which is easily done if you have a large purchase looming.

Yeah when I opened mine it was 3% for three months with no limit.

Not sure of the other advice on here. Basic guide is only buy things you can afford and don’t pay interest on them. 0% balance transfers used to be just that – they now have an admin fee so they do have a cost. One I’ve just used was 3% one off fee, 20 months interest free. That’s maybe a 2% APR which is cheaper than a mortgage but not actually ‘free’.

Anyway. You’re going to use it overseas so your main criteria should be to get a card that doesn’t sting you too badly for overseas/foreign currency transactions. Most give you a bad rate and charge you a commission. You want one that doesn’t and ideally

Halifax used to be the recommendation. No idea if they still offer it to new customers but it works well for me.

do not get one!

most evil bits of plastic on the planet!!

This

It might have changed now but the c/card companies used little tricks like this – you do a 0% thingy/purchase/transfer.

Then you use the card for something else, say, some forks for £400. You pay the £400 off at the end of the month thinking you’ve paid the forks off. You don’t, that £400 doesn’t go towards your forks ‘cost’ but pays off your 0% balance and you’re getting interest charged on the £400 outstanding from the forks.

If you do the 0%, don’t use the card again.

Have a good look at the terms etc with regard to how they allocate your payments, I suspect it is easy to come unstuck.

Devils work, avoid if at all possible

Why? If you’re prepared to shop around a little, maybe change cards occasionally, then cashback, or reward cards can be very good. (Me and the missus went to New York last year, we paid the taxes fees and charges for the flight – the “ticket” part was free and 3 nights in a hotel was free – all off the back of credit card loyalty schemes).

If you’ve never had a card before though, I’d apply sooner rather than later – a lad I know had to go down the route of one of these credit builder cards – extortionate interest and a limit of £200 because he had no credit history to speak of. After a few months he was able to increase the limit to something more useful, and after another few months to a normal card with one of the big lenders. Just worth thinking of if you’re needing to use it as security for car hire.

Some of the credit builder cards can be worth a look anyway. Aqua do one which gives very good exchange rates, no commision and 3% cash back. Very high interest (30 something percent) and very low credit limits though.

most evil bits of plastic on the planet!!

not as evil as scammers raiding your bank account and clearing it out if the debit card details are compromised. at least there’s a good 30 day buffer with a CC to sort the **** out.

get one. pay off in full by DD.

Only evil or the devil’s work if you borrow on them, or don’t pay off, or have a history of excessive spending and increasing debt, or gambling etc.

do not get one!

most evil bits of plastic on the planet!!

I disagree, if you can’t manage them they are bad, if you manage them, they are no harm at all. Just keep a close eye on what you spend vs what you can afford to pay off them. And ensure you get some sort of reward for using it i.e. cashback, tescos vouchers or whatever.

Also with my card (Capital One) I can set alerts to tell me when I have gone over a pre-set amount so I know when I am nearing my monthly ‘budget’.

I checked my experian credit score last night as I’m about to put a mortgage application in. I got refused a loan about 5 years ago and my score wasn’t great. Checked yesterday and it’s “992 – Excellent”. This i think is due to having credit cards and paying them on time etc

most evil bits of plastic on the planet!!

Only in the hands of idiots. I use one all the time and pay no interest. I will be buying a new bike and will earn a few quid on my savings and get an interest free loan for 12 months at the same time. In the meantime I have lots of protection and convenience.
Its called money management and anybody who is not making them work as part of your overall saving/money management is missing out.