General: Credit Cards

After years of saying "no no no" to credit cards, I'm now wondering whether I actually might want one. I'm not too worried about spending money I don't have - I'm quite good at keeping within my means, and I'd set up a direct debit to pay off the balance every month. But even then, is a card in itself just a temptation too far? After all, I do occasionally use my debit card to buy things I really shouldn't on my limited income.

The point is, there's some handy cards out there (if you stay within the rules) - some offering 1% cashback on all your purchases. May not sound like much, but it's money saved nonetheless. There's even one offering 5% for a limited period to lure people in. And I'm sure other people out there benefit from different rewards schemes. And there's always the benefit of the extra cover that a credit card offers over a debit card when buying online.

Anyway, I was just wondering what people's opinions were. Do you have a credit card? Do you have several? Could you live without it/them? Is it better to avoid the hassle altogether?

We use ours quite a bit, we get 5% on grocery and gas purchases. I believe it's 2% on everything else. We save the rebate for Christmas, last year we had an extra $180.00. Your correct in the feeling that it could be a danger. We found ourselves $10,000 in credit card debt a few years ago and it took 2 years of dedicated money budgeting to eliminate it. Now we only allow ourselves to charge up to 1 weeks pay on the cards before putting them away.

I have two. As long as I pay off the balance in full each month I never pay any interest. I only use them when I absolutely cannot use my debit card (e.g. for purchases from SCAN.co.uk where they won't ship to an alternate address unless you use a credit card). I don't really need two and one of them is never used, although I gather that simply having it improves my credit rating even though I don't use it (since I do, techically, pay off the £0 balance every month).

In fact, when I do use my credit card, I transfer the money from my current account immediately using Internet banking. Sometimes this gives me a negative amount owing, i.e. the card is in credit, for a short while - but there's nothing wrong with that!

I have three of the plastic credit goblins! one of which is Mrs.C's,but in my name. (I never use that one unless it's for household stuff.) The other two I do use just for internet purchases. I always pay them off when the bill comes via online banking. Both of them have a crazy amount of credit on them and I did at one time halve the amount due to the worry of fraud. (A bit pointless now as the security is much better) I guess the credit limit is so high, because of when I was in business? I still get invited to borrow money, or up the credit amount. I always refuse as there is no point what so ever. I never spend more than I can pay back in one go and if you stick to that principal you will never get in to bad debt.

If you do what Ivan suggested, known as card pimping, you must not do it too many times. The card companies and banks are getting wise to this (at least in the UK) and all the credit checks can ruin your credit rating. Never default, pay late or do anything that will damage your credit rating as you may find in the future you may be stuffed for getting a mortgage or buying a car etc.

Credit cards are very useful if as you say, "follow the rules" The fraud problem and just pure mistakes on the sellers side are well covered by them. Oh and I only use my debit card with companies I trust and know it will sorted out if there is a problem. Go get one Huddy and extract the best out of it.

I don't think so. But I think the point is that some offers let you have cash for free for a certain time.

Posted By: KrazyIvan

Get an extra card that offers 0% interest for 6 or 12 months. Then take the cash out and deposit it in an interest bearing savings account or some other security that will make you money. When the time comes when the interest offer is up, pay back the loan and pocket the interest you earned. Close the account the start on a new card, wash, rinse and repeat.

This is exactly what I do Credit cards are, for the more financially astute amongst us, a tool to earn a bit of cash on the side and beat the banks at their own game.

Beware those of you out there who use debit cards for online transactions - you are *not* covered in the same way as you are with a credit card. I would never *ever* use my debit card to purchase anything online or over the phone. Once the money is gone, the money is pretty much gone.

edit:

Posted By: Huddy

Posted By: KrazyIvan

Then take the cash out and deposit it in an interest bearing savings account or some other security that will make you money.

How do you take money out of a credit card without paying cash advance charges? Is there a way to transfer money from a credit card free without actually buying something?

Credit card cheques are awesome little inventions I personally don't bother anymore as the banks are becoming more and more wise to "stoozing" - instead i just spend and pay the monthly minimum, then pay up, as KrazyIvan said just before it's all due, then move on and repeat.