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Original poster

credit cards good bad or indifferent

51 replies

Flute56 · 28/06/2023 05:21

I was watching a video where a young person was saying oh its good to have a credit card. I do not have one. My parents never had one. I have been raised on the assumption that credit cards are a bad idea as they encourage debt. Credit cards are for when you do not have the ready cash available and then you pay the card back with interest so you end up paying more. It is the same as a bank overdraft. I do have an overdraft but I tr y not to use it because if you go into your overdraft you pay charges. I butget very carefully so keep within my means and I think that last time I went into my overdraft was about 6 months ago

OP posts:
RedHelenB · 28/06/2023 07:22

Flute56 · 28/06/2023 05:24

If I want something I save up for it or go without. That is the only way I can live

I've never paid interest on my credit card as I pay it off in full monthly. And I get money off vouchers on the amount I spend.

Peony654 · 28/06/2023 07:27

You’re brewing quite judgmental about something you never used. I have a Halifax clarity credit card which I only use abroad (it’s the cheapest way to spend foreign currency, I’d recommend that if you are going to Australia), and an Amex for the cash back on things I would buy anyway and for the protection credit card gives you for cancelled flights etc

countrygirl99 · 28/06/2023 07:37

OP you sound financially disciplined so you are exactly the sort if person who would benefit from the enhanced consumer protection/cash back/points that can be obtained by judicious use if a credit card. If you choose not to that's your lookout but don't adversely judge others who are more savvy than you.

mondaytosunday · 28/06/2023 08:02

I have a credit card and like most PP pay off my balance every month. It's useful when the cash flow is a bit up and down - you get a free credit period (so you buy something on X day but you don't have to pay for it for up to 28 days), which has helped on occasion.
And it helps you if for some reason you have an unusual unexpected expense - like a car breakdown.
And it does allow the ability to spread the cost of something, like a holiday, rather than having to save up (of course the latter is preferable, but not always practical).
So like all things to do with money, it can be a very useful tool if used wisely.

Ambi · 28/06/2023 08:17

I've started to find myself delaying buying something until my statement renews to delay payment for another month. All this means is the cash is sat in an interest bearing account for another month.

Hoppinggreen · 28/06/2023 08:20

I have previously got into trouble with them so didn’t have one for ages.
Now me and DH have a joint one that we use for big purchases and holidays so that we get cash back. We pay it in full every month so never pay interest
My Monzo account also gives me a Flex card that I can pay over 3 months with no interest, I haven’t used it though

MissDollyMix · 28/06/2023 08:26

Good thing. My DH had the same mi set as you but then realised he had a poor credit rating as a result and struggled to get a mortgage so he had to build up a credit history using a credit card. We now use it as others have described. Purely in lieu of a debit card - also as neither of us has a company credit card we use it for expenses that we can then claim back from our companies. Keeps everything nice and tidy. But it sounds like you’ve already made your mind up on this matter….

marshmallowfinder · 28/06/2023 08:28

I've had one since I was 18 and felt it prudent in case of emergencies as a newly qualified driver going all over the country. I'm 52 now and use it most days for my carefully considered spending, and pay off in full at the end of each month. I have gained a couple of thousand pounds at least, I would estimate, in points and rewards, since having it. I've never paid a penny interest. You are missing the point OP, by being very deluded about their value and benefit.

Wolfpa · 28/06/2023 08:35

Will you be hiring a car in Australia? If so you will need a credit card.

As previous posters have said there are lots of benefits using a credit card as long as you are able to manage your finances wisely. I get cash back on mine helping me save money and the extra protection that comes with it puts my mind at piece for large purchases

greenspaces4peace · 28/06/2023 08:46

@Flute56 well I carry only $100 overdraft and in Canada where I live your debit card can’t be used like you uses yours.
so no I can’t imagine not having one.

JesusMaryAndJosephAndTheWeeDon · 28/06/2023 08:53

They are a tool, used correctly they can be very useful and even save you money.

Used incorrectly or irresponsibly they can be problematic.

They shouldn't be demonised but people should be educated on the pitfalls and benefits so they can use them appropriately.

I wouldn't dream of making a purchase over £100 without using a credit card.

littleripper · 28/06/2023 08:59

I have 2, one we use for household expenses and one for holidays - both paid off in full every month. We had paid for a very complex holiday in April 2020 - 4 countries, 9 flights and 17 hotels/rentals over 4 weeks. The credit card was amazing for getting all the £ back when covid stuck. We were fully refunded for every aspect within 2 months and when one company behaved awfully they refunded us immediately and then claimed back through their legal service. I wouldn't travel with out one.

ginslinger · 28/06/2023 09:00

just coming on to echo the benefits of consumer protection and collection of points/avios/vouchers. If you are careful to pay everything off every month then credit cards are a godsend. I've had 2 issues sorted easily in the last couple of weeks because i paid with a credit card and wouldn't have had the same protection with a debit card.

YoureRockingTheBoat · 28/06/2023 09:04

Like you, I do what my parents did. I have a credit card and I pay it off each month. I use the YNAB software for budgeting, so when I spend on the card the money comes out of my budget and into the ‘ready to pay the CC’ pot, so I always know where I am.

When I was young, there was an additional reason to the ones above for having it, which was security in emergencies - I liked knowing I had the means to book a hotel to get out of any dodgy situations. I don’t feel that in the same way now, either because I am richer; or because it’s easier to pay in other ways now; or possibly because I live a more sedate life.

GeraltsBathtub · 28/06/2023 09:07

They are good unless you are paying interest on them. I pay mine off in full every month and as a result get free flights from one of them and additional purchase protection you don’t get on debit cards. Like PP I would never make a large purchase on a debit card without the section 75 protection. Another card I have is great for foreign currency.

WhatHaveIFound · 28/06/2023 09:07

Use mine every day. A credit cards offer better protection on purchases plus I get cashback on one card and JL vouchers on the other. I've always paid them off in full each month.

DD took one out when she turned 18 (now 21) and set up a few direct debits and again her card is paid off in full each month. It'll help build her credit history and it's there in an emergency.

I've seen people turned away from car hire desks in the US because they don't have a credit card. They won't accept debit cards.

theoddoneasalways · 28/06/2023 09:10

@Flute56 as a lot of people have explained, credit cards are not always about spending money you just don't have. There are lots of benefits to using them if you're sensible.
DH and I (very middle aged!) got CCs for the first time a couple of years ago. We buy all our big items on them so we have the protection. We are lucky that we have savings that would cover our CC bill with no difficulties at all so it's not a concern for us. It's not the same for everyone, obviously.

Jumbojem · 28/06/2023 09:22

A friend of mine doesn't have a credit card. When her car had to go in for lengthy repairs and no courtesy car she had a big struggle finding a car hire company who would take a booking without a credit card.
I use mine frequently, I have two, but as with others here the balance is paid by DD every month, never pay interest. I like OP, don't spend money I don't have but that doesn't mean also not using a credit card.
It is also invaluable on holiday where my nationwide card is fee free, unlike my debit card which would rack up a few £ in fees every time I used abroad. How will you be spending in Australia? Paying a fee every time you use a debit card, or incurring a fee to exchange cash and risk theft?
I'm already teaching my 16 year old to look out for fees and charges and use resources such as money saving expert to find the best deals.

OP, I don't think you are as money savvy as you think you are!

Hoppinggreen · 28/06/2023 09:26

Good point about hiring cars.
We hire cars 3 or 4 times a year abroad so need a cc for that, once when DH hadn’t taken it the company agreed to use our debit card but took £2000 out that we had to wait 10 days to be refunded (after several emails)

HothouseFlower · 28/06/2023 12:34

I agree you're coming over a bit judgey. Probably because your parents only taught you the negative side, i.e. "the assumption that credit cards are a bad idea as they encourage debt".

Lots of posters have explained the positive aspects, if you're money savvy.

Posters teaching their teenagers how to manage credit cards properly are teaching them a massively valuable life lesson.

I couldn't imagine travelling without one, especially long haul. As a PP said, it can get you out of many dodgy situations. A credit card is like having another type of insurance/reassurance if things go wrong.

A friend was travelling in a far-flung destination and missed his flight back to the UK (his fault). Had to buy the next available flight, so stuck the 3 grand (!) on a credit card and sorted it when he got home. I don't know what he would have done without a CC. Debit cards were not accepted.

dizzydizzydizzy · 28/06/2023 13:04

I ran up a huge debt in my 20s and 30s.

I was forced to go into a debt management plan by one of the credit card companies. The first thing I had to do was cut the card up and post it back to the credit card company.

I do now have 2 credit cards again. Got both of them within the last couple of years. Before that I had none for about 10 years. I now pay them off in full every month. They can be useful. I like to travel and it can be awkward not having one then. Hotels,
For example, like to put a reserve on your card even if you have already paid.

WhimHoff · 28/06/2023 13:07

I have two. Personal and business.
I don’t always have cash in my current account so it’s handy.
Bought a car a few months ago, tried to do a bank transfer but I’d exceeded my daily payment limit so I paid for it on my credit card and paid card off in full the next day.

Also booked a holiday on my credit card and I pay the instalments in full each month.

Business card has reward points and is also paid off in full each month.

marshmallowfinder · 28/06/2023 13:39

Have you vanished, OP?

keel34 · 28/06/2023 18:39

Honestly I think you are a fool for not having a credit card. Make your money work harder, sign up to a decent loyalty scheme and benefit from additional protection! It's literally free money. It's a pretty juvenile assumption that credit cards are "bad".

jackstini · 28/06/2023 18:52

Per previous posters really - noting I always pay off every month

Better consumer protection
Any fraud does not affect/stop your bank account
Airmiles & cash back for free

Can use abroad with no extra charge
Improves your credit record
Multiple cards means if one company's system goes down, you just use another one

I would say they are better for anyone except those with high debt/not great at paying them off