Probably stupid questions about credit cards

[Wenchelda]

I've never had a credit card. Tbh I don't really understand how they work. I don't want to spend money I don't have. However I often buy things online and sometimes it's a pain having to pay for stuff on my debit card and then if I need to return it, I have to wait for refunds to be processed etc. If I had a credit card to use for ordering online, does that mean I can potentially order an item, and then return it if need be, before my monthly payment is due - therefore not having to pay out and wait for refunds?

Also if a credit card says "0% interest for X months", does that mean if I use it but pay the full balance each month, I don't pay anything at all extra on top?

I've heard about cash back credit cards... what are they and how do they work?

I've been on money supermarket and used the eligibility checker thing and it came out as being eligible for several, with Sainsbury's showing as something like 2yrs 0%.

I don't know whether having a cc would be useful or if there's no point seeing as I've managed without one all my life so far!

If you pay back the full balance amount on time each month you never pay interest. If you only make part payment you accrue interest on the balance at whatever the apr is. In theory as long as the goods are bought and refunded in same billing period the money never leaves your bank account.

I charge all our monthly spending on a credit card and pay it all off monthly. I don't want to have money coming directly out of my bank account ever and the credit card gives an added layer of consumer protection.

We use a cash back credit card that has no annual fee so it costs us nothing to use and we get money back.

The credit card company makes money on every transaction that you use their card for so they still make money off of you even if you don't accrue interest with them.

It is also nice to have credit cards loaded onto smartphones for small purchases. Saves handling small change and notes all the time. More and more I use my phone to pay for things and it is so much easier and I have an electronic trail of spending.

You don't pay any interest ever if you pay the full balance off monthly. We probably have pretty high interest rate credit cards but we never accrue interest so it doesn't matter.

Thank you all

I wouldn't count the "return stuff online" into the equation, when you decide. What might be important though is to choose a card that can be blocked against purchases from abroad (you lock it, or lock it up, with the bank etc.) There's a great increase in credit card scams (I read this today), people hack into online companies' databases and steal credit card information (numbers, names, etc.) and buy stuff online. The card number is thus used abroad, by someone abroad, for purchasing abroad, to be delivered abroad, but the bill ends up with your card. That's why it's important to look these things over (the lock-unlock feature). Also, you don't want a card with a big interest rate should you need to use it, and neither a card with a big annual fee.

DireTires Can you put direct debits on the credit card? Or just things like food shopping, petrol?

You can do that kook but I'd avoid it if you can, because they give the company authority to charge your card and can be hard to cancel.

It's called a continuous credit authority, you can't usually pay your gas bill using a credit card but you can pay for things like insurance that way.

Thanks, I might consider one for food & nursery fees. Then keep my household bills coming from my current account by direct debit.