Why do people spend on credit cards and pay off in full?

[toastedcat]

Just read a thread where someone mentioned this in passing and I wondered why you'd do all your spending on a CC that gets paid off every month?

Cash back/points/ purchase protection and to keep a good credit rating.
I don’t do it, but can see why people do!

I set up a direct debit which pays off the balance each month so I don't forget.

Because I’m old and got used to paying on a credit card, before debits cards were invented I think. It was either the useful, convenient credit card, or a hand-written cheque accompanied by a Cheque Guarantee card (with a quite small maximum amount).

Financial protection, financial protection, financial protection.

If you buy something on your debit card and the company goes bust or doesn't deliver, you're stuffed. Buy it on your credit card and your money is refunded to you.
Remeber the ash cloud and all the flights and holidays that were ruined? Those who paid with their credit cards got their money back.

I would never pay for a large purchase or a flight/holiday with a debit card. Especially now when the cost of living means that people will spend a lot less and a lot of companies are likely to fail.

Don't want to use a debit card online. if there is fraud then a) you are better protected and b) it doesn't leave you with no cash in your account and a load of bounced direct debits to sort out.

Plus I like the clubcard points!

Because you can see the transactions some weeks before the money leaves your account. Also no direct link to your current account, as with a debit card, so can't be hacked into by using it online. And it is good for your credit score.

Well it gives you another month at least to pay. Actually sometimes more if you buy just after statement date as it will take another month to send statement and then u get about a month to pay it.

I used to do it with my Debenhams card as used to get vouchers to spend in store. I stopped using it when they under and I don't have one that I use regularly now.

I didn't like doing that though as I was always like what have I spent all that on and then realised it was something from 6wks ago and at Christmas the bills were always huge. Even though I have money put away it was just more admin for me as I have separate accounts for Xmas, holidays, kids bdays etc. So wld have to work out what was Christmas presents what was my personal items or family stuff and then transfer money here and there to pay the bill.

Tesco clubcard points. I pay my Tesco mobile phone bill with them.

We do it to get the points. In a year we've got enough for a free flight to Turkey/mid-haul. Once we flew business to Disney with them.

It also builds out credit scores.

Yep. It's never occurred to me to buy something on credit with my credit card. And I've had one for as long as the things have existed. I simply use it for any online purchase or large transaction, for protection from fraud and company failure.

I set up a DD and it's automatically paid off each month without me even thinking about it. Oh, and the Clubcard points with mine are a bonus.

We put all our spending on our John Lewis card and pay off in full...get about £300 in vouchers a year , depending what we've spent.

I put my food shopping on my credit card every week and pay it off straight away. I get 1% cashback.
I also put any big purchases on my credit card for added protection.
It builds my credit score.
Paying it off in full every month means you don't pay any interest.

Trying to build up my credit rating to get a mortgage next year! I use it for petrol, Prime & Netflix and pay off each month.

Cash back

Wait you can get Tesco points. Is this with a tesco credit card?

I mostly pay off in full.
Get M&S vouchers for purchases
Protection in bigger purchases
Has built credit rating

As all the above - mainly protection online (if a fraudster gets your credit card, they may spend some of your credit limit, but at least you still have your bank account to use while it's being disputed).

Also the perks.

Tesco Clubcard gives clubcard vouchers, that I turn in to Virgin airmiles.

I have another card (not a credit card though) that gives cashback, so I will often keep that account low but when I'm doing a big purchase/payment I transfer money to that account to make the payment.

We bought something the other day that cost £1,300. Transfer £1,300 from one account to another, spend the money and got £13 back in cashback!

If you're going to spend the money anyway, you might as well get some extra benefits.

It also keeps money in your own account for longer, so potentially earning you a better amount of interest.

Yup. Just browsing that one now tbh….

For me I use it for getting air miles. I use my cc for everything and have flown to Orlando and back on business class with the airmiles this year. I’d have been able to use those airmiles to fly first class to Tokyo and back if Covid hadn’t struck! I don’t like being in debt and I think the rate is quite high so I always pay it off. I literally never use my debit card!

Because it's beneficial - insurance, cash back/vouchers, 40+ days of interest free credit and builds your credit rating.

My parents always did it when I was a child (and still do) and I have always done it too.

You can give yourself a month’s interest free credit. There’s more protection than using a debit card. Our card gives us Nectar points, soon add up.

Financial protection, earn Clubcard points, and right now I'm getting about a fiver a month letting the cash sit in savings until I pay it off.

(But even though it's "paid in full" at the end of month, I already have the money sat in my account. If I needed payday to pay it off that would be debt if that makes sense, I'm only spending what I already have).

We have done this for the last 20 years since we had an off set mortgage. Everything goes on our cards, we never make any big purchases without using them.

It's more a question of why wouldn't you do this.

So many times people talk about issues that just wouldn't occur if they had a credit card that was used regularly so had a decent limit.

As for overspending, it's a spending tool, free money doesn't come into it. Deciding to buy something and the mechanics of paying for it are a completely separate thought process.

Another reason would be automatic petrol stations that take £100 and hold it for a week when you buy £20 of petrol. If you do this with your current account the week before payday, it can be a problem. If you do the same with a credit card, you probably wouldn't even notice that they do this. Same for deposits for hotels and car hire. Much easier to have a large sum reserved as part of your credit limit, than actual money unless you have loads of it.