To not have a credit card?

[CatsArePeople]

Somebody just told me that credit cards are must have for a responsible adult. Seriously? Why?

I'v also never had a credit card and had no issues getting a mortgage. Other things such as phone contract have the same effect.

They're also useful when ordering online in that you can buy and return different sizes and don't need to pay for the extra ones as will have been refunded by the time the bill is due. Saves the bother of using Klarna etc.

Also useful if you have work expenses, can reclaim the money in time to pay the bill.

I haven't got one.
Because I did have more than one and got into a bit of a mess.

I've never had one either and no problems getting a mortgage

If you pay it off each month you use the best way to get most return in reward vouchers and cashback. I also wouldn't want my bank card left on accounts ready to spend, I always just leave a credit card on them

If you pay it off each month you use the best way to get most return in reward vouchers and cashback.

The key word here is IF

I originally got a credit card in the 80s because online banking wasn't available, cheque guarantee only went up to £100, and the maximum I could take out of a cashpoint in a day was £350. So credit cards were there to pay for large expensive items. I bought my first sound system on a credit card and paid over two months. The alternative then, was to save & pay cash, or to take out a 12 month credit agreement.

Now I have one because of the insurance cover, eg if I buy something over £100 and it is in some way a scam, I can claim through the card's insurance.

If you have a limit you can comfortably pay off in full each month they can be really useful. Alternatively? for the responsible purchase cards can be the cheapest form of borrowing.

Credits cards give free money. Interest free money I mean. Even most family members wouldn’t do that for people. What’s not to like about credit cards. That said, people that benefit most from
credit are the ones that don’t need it.

I don't have a credit card and my credit rating is 999 on Experian. I have a mortgage and car finance which I pay monthly which will show any future lenders that I make my monthly payments without fail. I don't need a credit card to build a rating..

@BarbaraofSeville

I much prefer the credit card in that situation. I remember a thread on here once where someone was really distressed as they had arrived at a hotel with no credit card and didn’t have enough in their bank to pay for the deposit as well as the actual cost of the room

Same with hire cars. With no credit card, they'll reserve about £1000 in your current account or charge you an extra £20/30 a day in excess reduction fees. Then people start complaining they don't have access to their holiday spending money or the car cost twice as much as they were told when they booked, all because they're too bloody minded to take out a normal payment tool that makes all these problems go away.

What a shit comment. Not everybody can get a credit card. It is a privaledge if those in secure employment and permanent housing and for many reasons can lead people into debt. Nothing to do with being blood minded.

Around 8 million people in UK owe between 2 to 10k on their cards and the average debt in London is over 15k. 74 perc do not pay off their balance each month. Paying minimum each month will usually take you 20 odd years to pay off. One missed payment will seriously destroy your record, every 1k not paid each year will cost you 200 and this will compound.
Someone is paying for those who say it is bloody minded not to take out a card and are in the privaleged position of being able to pay it all off each month.

I use a credit card for credit score reasons, I don't have any debt or finance other than a mortgage. I also go for one which has points or rewards of some kind. I like the added protection when buying higher value items too.

I have a cash back credit card I pay off each month. My Experian score never changes but my Karma one does

If I use more than 50% on my statement date my score goes down quite a few points. If I have 0% on my statement my score also goes down. If I have 30% on statement that I pay in full my score shoots massively up

I do think a credit card makes a difference

I had one at the age of about 20 but I got into bother paying it off so once I settled the balance I cut it up ans closed the account. Never got another one.

My credit rating only tanked when someone inpersonating me took out credit in my name. Once I sorted it out, the rating wentup again.

My Karma credit score also goes up and down depending on how much I have on my credit cards even though I pay them all off each month, there does seem to be a sweet spot which makes it go up, credit score is high anyway so it doesn't make much difference but with some it could be something to consider.

This thread is bonkers. I dont have a credit card and have never had an issue with hiring cars abroad.

They’re useful in improving your credit score - lenders like to see that you’re capable of borrowing money and repaying it. Many people make regular purchases on a credit card and repay it before incurring any interest for this reason.

They aren’t essential, especially if you’re building up your credit score in other ways, but they can be a useful tool.

They also give you additional protection for your purchases if the goods aren’t for for purpose etc. I use a credit card for expensive purchases and pay it off immediately. That way if the goods are faulty or whatever, I know I’ll get my money back regardless of what happens to the seller.

@Letsallscreamatthesistene

This thread is bonkers. I dont have a credit card and have never had an issue with hiring cars abroad.

OK, genuine question. When you search and book a car hire and it says you must have a credit card, what happens when you turn up without one? Because I've seen that just about every time I've booked a hire car abroad.

Or are you going to certain companies, eg the large international brands, which often charge far more than smaller/local companies? Are you leaving a large deposit? Paying an extra daily fee to reduce the excess? Not hiring in the Med, where this is standard practice?

Because to me, all of those are 'a problem' because paying more than I need to, or using one of the companies that have endless bad reviews for ripping people off or hidden fees and refusing to recognise your excess policy that costs about a fifth of their version (eg Goldcar, Record) is something that I refuse to do, and having a credit card allows me to do that.

Around 8 million people in UK owe between 2 to 10k on their cards and the average debt in London is over 15k. 74 perc do not pay off their balance each month. Paying minimum each month will usually take you 20 odd years to pay off.

74% not paying their card off every month is incorrect, it's more like 60/70% who do pay their card off every month.

No-one who says take a card out says you only pay the minimum, or even change what you buy, simply use the card to pay instead of using a debit card, for the advantages that it brings. And we're not talking about people who don't have any money or a permanent home.

Because they're not going to be travelling abroad anyway are they? Just the average majority, who can get a card, as long as they can prove who they are, or where they live. There are starter cards available, that just about everyone can get, unless they've been recently bankrupt or are already in problem debt.

I was a twat with money when I was younger and abused credit. As a result my credit rating was shot. As soon as I was able to I got another one and I use it for a subscription which is paid off in full each month. The reason I got it is for payment protection on large purchases or holidays. I did actually learn my lesson with spending but its useful for protection.

To those saying it has no impact on your credit score, credit scores mean nothing to lenders. They are just numbers. Lenders don’t look at credit scores, they look at your credit accounts, payment history and ability to manage credit. Of course you can get a mortgage without a credit card, but having and managing credit cards well will always improve your overall borrowing ability above those who don’t have credit cards.

Are you both turning up for your rental and asking if you can use a debit card? Because if you check before booking you can easily select a company in advance that accepts debit cards.

The deciding factor is not whether some hire companies will take debit cards. The issue is whether the best company, selected without regard to how they want to be paid, invariably will. If it costs you nothing to have a credit card, then not having one is limiting your choices. Unless every company you might want to use takes debit cards.

(It actually costs me less than nothing to have a credit card, as I get 0.5% cashback on all my spending.)

I do have one now, but have never used it. I refuse to pay twice for things!

I presume you mean you don't want to pay interest. When I got my first card in the 1980's, the standard advice in every newspaper money advice column was that you should set up a direct debit to pay off the full balance every month. That way you never pay interest. Nearly 35 years later, that advice is still valid.

If someone is the kind of person who would not, for whatever reason, pay off the whole balance automatically each month, then maybe a credit card is not a good option for them.

No fees when travelling abroad, earn points and thus get vouchers for spending money I was going to spend anyway, credit limit for holds at hotels etc. Wouldn't be without one (and never paid a penny of interest).

Oh yes and much better level of protection, I very rarely use my debit card online. That's actually the most important one for me!!