Do you cash flow or use credit?

[holdthephonio]

Conversation with a friend who suggested that EVERYONE uses Credit of some sort like, credit payments (sofas etc) , credit cards, overdrafts, loans etc I have personally never used any of them (to which she was astounded!) For me it's simple if I don't have the money then it doesn't happen. I save for everything.

Do you cash flow everything or use credit regularly?

Currently, I'm cash flow as I haven't had any large expenses that needed that kind of protection or were unexpected and urgent recently. For me, the idea that people use credit just to pay for things they can't afford kinda ignores how money and legal protection of purchases works. Some do, but a lot of people are claiming costs back on their cards right now that those who paid in cash can't.

I'm debating whether to use credit for the new phone I'm hoping to buy my son even though I have the money because even though it isn't that large a purchase. The 0% interest and protection is nice.

Also, it's nice to say save for it, but shit happens unexpectedly. I've had around £700 in immigration-related costs in the last year that could not have been planned as I'm not psychic about policy changes and one of them was 'you have three months to pay £300+ or you'll be fined a grand'. I thankfully had that, wasn't an issue, but I imagine others might struggle. It would be nice to never have to worry about a sudden expense bleeding the budget dry, but that's not everyone's reality.

Only credit if it's interest free so for carpets, sofa and so on. Credit card for everything to get the rewards but paid every month in full.

I use credit to my advantage and profit. Many reasons that are nothing to do with getting into debt, or spending money I don't have.

Pay for all spending on a cashback credit card. Pay off in full each month. Makes budgeting much simpler as you just treat it like another bill and don't have to keep such a close eye on your current account.

Not as profitable as it used to be, but borrow from credit cards at 0%/no fees and put the money in an interest paying account.

Put any big payments on credit cards for purchase protection - when Monarch went bust 2 days before we were due to fly with them, I bought new flights for ££££s on my credit card, and my credit card repaid the cost of the lost flights and the extra cost of the more expensive flights.

Pay for work expenses on credit card, so the money doesn't have to come out of my current account before it is reimbursed.

Put car hire and hotel deposits on credit card, so I don't have to take the car hire rip off insurance or let them have access to my current account. Some car hire places require you to have a credit card, so not having one is likely to restrict your choice of provider and probably make it more expensive.

It maintains a good credit record. If you never use it when you don't need it, you might find that you can't get it when you do need it.

Yes I've always come across this assumption too which I find slightly odd. I've never had a credit card or any kind of loan and the only thing we've financed is our sofa (there was some sort of reason for that at the time but can't remember what it was) but equally I completely appreciate that not everyone is in the position to make large and necessary purchases in one lump off the bat

@BiBabbles I agree, I use my credit card for almost everything I buy online (otherwise I use PayPal), it gives much more protection.

Many years ago my parents booked flights for me on an airline that went bust, and they were able to claim the cost back from the credit card provider.

Mixed bag of credit and cash and a one in one out method of credit. Just finished paying off one thing at no interest and paid half cash and half no interest credit on another thing. Spent about 18 months paying out for dental treatment then when that stopped I got a car on hire purchase.

I don't spend in overdraft and car is the only thing that is truly debt/credit, which I have finally come up with a plan to overpay to bring the term time and interest down as I am also not keen on credit.

Somethings are too costly to realistically save for so credit might be the only option. Sure there are alternatives, buying a 2nd hand older car cost me much more in repairs etc than my hire purchase and its maintenance put together. Repayments are much more manageable than the unexpected handbreaks snaps or break lines corroding to nothing, so the debt is worth it.

I have a mortgage and a loan for my car but otherwise try to cash flow. I have a small overdraft facility on my bank because every once in a while the mortgage goes out the same day my wages come in and I don’t want it to get refused so my overdraft covers the amount but by the time I get up and check the account is back in the black. I could get round this by messing with direct debit dates etc but the overdraft was the most hassle free option and doesn’t cost as it’s always out and in the same day. I also have a credit card I would use in emergencies and it has a large credit limit so I take it abroad in case I need to pay any bills that can be claimed on insurance in case the insurance company couldn’t be contacted immediately. It would cover a helicopter pickup if injured skiing for example, but thankfully it’s not been needed yet. Essentially I like to think of it as a sensible mix of both, but day to day tailored towards using held cash with credit on major and considered purchases.

I use PayPal credit often - payments over £100 is interest free for 4 months. It allows me to ‘over buy’, make a decision and return what I don’t want. Then I pay it off.

I’ve also used it for purchases when I’ve not had the cash but need it immediately (new tyres, for example).

I do have a travel credit card though which has been invaluable. 0% charges on overseas transactions and cash withdrawals. Just need to pay it off before the end of the month.

I only use credit to buy an expensive item I couldn't plan to buy far enough in advance. I.e. when my phone or laptop or white goods break.

And I have only used a loan from a credit union, or microfinance for those purposes, not traditional credit cards or moneylenders.

Yanbu, I have a mortgage but other than that I pay for everything at the time of buying. I like to live within my means, if I cant afford to pay in full then I wait until I've earned/saved enough and then buy.

I know people with debts, big credit cards, loans etc who still want and buy new cars, furniture etc on credit. They are crazy imo.

I use a credit card but I don't go into debt with it. I have much more in my savings than I can put on all my credit cards combined.

They're just a safer way to shop online and provide me with more consumer protection than a debit card.

I buy lots on credit. Especially for things like Tv's, sofas, white goods etc I never have a big enough amount in my current account to buy things in one go and usually we replace as something breaks and it's nearly always interest free repayments. Got a good credit rating though so haven't had any issues getting credit for anything. Would take me far too long to save for some things.

I think it's worth remembering that some people haven't used their credit frivolously to buy expensive items. I suddenly had to leave my job due to health reasons and only got a very small amount of benefits as they said my health issue was temporary and I was able to work (I'd just had brain surgery!), not enough to pay my rent even, and once I'd blown through all my savings I had no other choice than to lend and pay my bills on credit cards else all my utilities would have been cut off and I wouldn't have been able to afford food. It's all well and good saying 'save for it if you can't afford it' if it's a designer handbag for example, but this won't work for everyone. Its paid off now but it's taken me 3 years and has been a massive cause of stress in my life that whole time. I now only have a low interest arranged overdraft in case of emergencies like insurance excesses etc.

Both- i pay for holidays on credit card and pay it back- I also have savings so a 0% interest credit card Is fine for me.

Either interest free repayments on big items, or a zero percent credit card. I’ve just paid off two large items and cancelled the credit card I used for them.

I have a credit card with my debit card account and that’s in credit too.

I don't have a credit card. If I don't have the money for something then I don't get it, simple as that.

We really struggled to get a mortgage as I have zero credit - so couldn’t be trusted with a mortgage 🙄 Dh has a credit card and has previously had loans, so his was excellent

I always saved up and buy things or just went without.

I’ve now got a credit card with a £250 limit on it and chuck bits and bobs on it and pay it off in full every month.

This has made my credit score leap up took about a year, but now my score is good rather than poor.

We have PCP for the car, and a mortgage. Credit cards are paid off monthly in full and we could pay off the car if we wanted to but have decided to keep it to keep my credit score going up and up

Mainly cash flow.

I try to pay everything by cash if I can. Sometimes this means saving for things I want.

I don’t have any credit card debt or personal loans but I do have a sofa on credit.

We pay with cash flow and savings. Bigger items like the TV, sofa, white goods I try to buy second hand. And I don't replace anything until it has truly worn out. We aren't one for the latest and best of anything.

income not credit but luckily don't have flashy tastes really. don't do pay by installments, no cars on finance or furniture.

apart from mortgage obviously, everything is paid for upfront.

glad i don't have anything hanging over me- looked into a car loan out of curiosity but didnt actually apply. glad i didnt as my team got the chop and i was made redundant with only two months pay in addition to my last month pay.

Mainly cash flow. I have a loan for my car and a credit card I use towards the end of the month (if I need to) or where I might need the extra protection. It's paid of each month.

I am going to take out another loan out for home improvements, I have the savings but would rather spread out the cost and over pay on the loan.

I used credit from age 18 - 42

Now I can afford cash flow

I do all my spending on credit cards but I have never paid any interest on them cause I use them as debits cards - ie. only spend on them if I already have the money and clear the balance at the end of each month.

I've also had loans when it made sense - ie. when waiting and saving up to buy or pay for something outright would have cost more. Sometimes there are certain long term purchases where the increase in price after saving up will cost more than the interest.

I also have a travel credit card that has the benefit of credit card protection and 0% charges on spending oversees so more often than not it's safer and cheaper than getting cash converted.

Saving up and paying for things / using cash isn't always the smartest or safest bet. I normally make a judgement call depending on what I'm spending on but all my purchases are on a credit card for the protection it offers.

I put absolutely everything on my credit card and pay it in full each month. I never pay fees or interest. I don’t spend more than I currently have. However, I don’t use debit cards because I won’t let anyone link directly to my bank account and I don’t carry much cash because it’s a hassle. So everything goes on the card. It also makes tracking spending very easy.