To think most people don’t actually pay off their credit cards in full each month?

[PoliteCyanViewer]

I always hear advice about clearing your balance each month to avoid interest but how many people actually do it? With the cost of living, unexpected expenses, and temptations everywhere, is it realistic? Do you pay yours off in full or do you carry a balance?

I do. My credit card is only used for building my credit score, after getting myself out of debt. I only allow myself to spend up to £50 on it, each month, so it’s easily manageable. I read on Martin Lewis that it’s a good way to build your credit score.

Banks make money on every single transaction via merchant fees paid by the vendor. Interest paid by those who carry balances is only one income stream.

Until I became self employed about six years ago, I had never been able to pay off my credit cards each month. I lived most of my adult life in debt, with a significant balance on at least one credit card, and often two, an overdraft that was usually about £1500 at the end of the month, and other loans at different times. I don’t know anyone in real life who has a Mumsnet salary, and very large proportion of the people I know are in the same position as I was, and have to juggle things round to make ends meet.

You need to educate yourself about how lenders make money.

It’s not “smug” to be prudent/live within one’s means.

i average £4-5k/month on my Amex. Pay it in full every time, but believe me they make plenty off the merchant fees for each of my transactions.

When I used to have one I’d pay it off every month without fail. But not used one in about ten years.

We pay off in full every month.

Every time I make a purchase on my credit card, I move the money for the bill through to my savings account. That way I know the money is always put aside to cover the bill. I transfer the money back to my current account the day before payment is made.

Unless you're on a 0% deal, credit card interest rates are insane.

No but I have 10k on an interest free deal until April 2026 and another 5k on an interest free purchase until July 2026 which I am actively using

15k on credit cards sounds crackers however previously I was paying the credit card in full so I pay whatever I have spent on the card each month into savings so they will be cleared when the interest free period ends

If you're not paying it off in full each month, you are borrowing money way more expensively than you need to. Get a personal loan and pay off the balance, then you'll be paying far less in APR. But you do then need to have the discipline make the repayments every month. Credit cards are pernicious because they tempt you to kick the can down the road, until the day you discover that it's so heavy that it breaks your toes.

If your credit card debt is growing, and you don't have wildly variable monthly income, then you really need to buy less stuff.

I don;t use my credit card much, only really for online purchases and I clear the balance by direct debit every month. I had a 2k ish balance at one point in my 20s and the interest was unbelievable. Lesson learnt.

That's why I pay for my Which? subscription this way.

We pay it off every month

No but it is smug to assume that others have made poor or inferior choices because they’ve ended up having to use credit cards when others have been lucky enough not to need to.

I didn't - I needed it to pay to live. Single parent, two kids, went back to work at half the salary I earned previously. I got into horrendous debt and was very close to losing my house and becoming bankrupt. I seriously considered suicide, despite having two beautiful young children who had no one else in the world.

Thanks to Martin Lewis's MoneySavingExpert site, I got through it. (Thanks to the DebtfreeWannabees!)

I will never spend more than I can easily afford to pay off ever again. It's a dangerous hole to fall down.

it doesn't have to be that big an amount, I just used it for a round figure that was easy to demonstrate. Some people just put all their normal spending on the cc and if it's a long term 0% one just put what they would have spent that month into savings instead.

e.g. even if it's 'just' the £150 a family might spend on groceries every week, rather than a big one-off purchase, putting that into savings when they get paid every month, and then paying the cc off at the end of the 0% term will add up.

Obviously you don't have to do it, but as long as it's money you'd be spending anyway rather than thinking of it as 'free' or additional money, it's no more dangerous than paying for things any other way.

always paid off in full it’s set up as direct debit. I wouldn’t use it if I didn’t have the money to pay it off as the interest is shocking. Sometimes the min payment is only £5 but the interest for the first month is £7. That’s why it’s so easy to get in debt.

But you realise you can’t possibly get any sort of realistic answer in MN?

Yes and easy to collect as well. Also collect with nectar at Sainsbury's and BP rewards. So by using the reward cards and paying by amex there's a double whammy of points..

The downside of the free amex card is that companion vouchers can only be used on economy flights

I do. The interest charged on it is crazy

I don't use one.

We do.

I have a 0% credit card which is how I paid for my car. I won’t get finance on a car as I feel interest rates are too high, and my credit rating is good enough to pay for a nice second hand car in full, and then I can gradually pay off the credit card. If the interest free period runs out I simply transfer the balance to another 0% interest credit card.

Always. Every month since I was 18. I’m 55 now.

Not always. Got into about 5k of debt by 2014. Took out a bank loan and paid it off in 2 years. I was lucky I qualified for a bank loan gir the amount that would cover it for a pretty low interest rate- not everybody does.

If you had 2.5k and average interest, paying the minimum would take over 26 years to pay off.

I have friends in their 40s who didn't understand how much debt / interest / the impact of that all would be. Some people think they are doing well to pay the minimum or can't even manage that.

Now, I pay it off in full every month and my limit is set to my monthly disposable income.

I do now but haven’t in the past. In the past me ex and I got into a bit of debt on credit card. We overspent on a couple of holidays. One ended up costing us more when we got there and another we couldn’t afford but it was a close relatives wedding and the family wouldn’t let us opt out. We kept moving that debt onto 0% cards for years. When we split we split the debt. More recently I inherited and paid it off in full along with my mortgage.

However for quite a few years I’ve had a Sainsbury’s credit card which o got as it had a triple points offer on it for a while. So I used it for my Sainsbury’s shop and then paid it off in full each month. I also gained the points towards future shops in Sainsbury’s and Argos. I still use that card even though the points from it aren’t great. But it keeps my shopping and petrol costs all in one place. It’s also really improved my credit rating.

I think it’s hard to judge people though. Before my inheritance I needed my car fixing and it was £1k for all the work. I just had to put it on the card and try and pay more than minimum payment for a while. Even now some unexpected costs end up on a different card and if I can’t pay that expense off straight away I try to over a few months. But that has a 0% on purchase offer at the moment.