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Should I own a Credit Card even though I do not need credit?
PDix
Posts: 2 Newbie
in Credit cards
Hi everyone,
I do not have a credit card but I have been advised by a friend to get one as he seems to think that this will help obtain a mortgage and secure an emergency loan (should I need one).
This does not make any sense to me as surely being debt free and having a secure permanant job is enough to get a mortgage/loan in the future? Why should I risk having a credit card in my wallet if I don't need one?!
Hope you can advise,
Paul.
I do not have a credit card but I have been advised by a friend to get one as he seems to think that this will help obtain a mortgage and secure an emergency loan (should I need one).
This does not make any sense to me as surely being debt free and having a secure permanant job is enough to get a mortgage/loan in the future? Why should I risk having a credit card in my wallet if I don't need one?!
Hope you can advise,
Paul.
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Comments
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Hi,
I think your friend is right, you need to have some kind of credit record for mortgages etc, if you have no credit at all it can somtimes be as bad as having a bad credit record.
If you get a credit card and just pay out for example for fares or petrol each month and pay it off in full when due this should start your credit record off and it will be of benefit to you in the future.
Also with a credit card you can get up to 56 days free credit, keeping the money in your bank earning you interest for longer, so as long as you work it on a pay all back each month, it is a win win situation.
v
xSEALED POT CHALLENGE 6 - MEMBER NUMBER 086 Special Star from Sue :staradmin :T:T0 -
Hello,
There are 2 reasons why I think you should have one.
Firstly if you want a mortgae in future then the lender will want to see how you have handled credit/debt. If you have no such history then they will have nothing on which to base a decision. You want a history of paying a credit account off each month.
Secondly for goods overr £100 the card issuer has joint liability under the consumer credit act. So if you buy something and the retailer goes bust then you have protection.0 -
Thank you both for your quick responses.
These both helped me see the positives about owning a card so I'm really pleased I posted the question.
Now I have to go tell my friend he was right which I'm not looking forward too that much!!!
Thanks again.
Paul.0 -
If you are concerned about building up credit, why not have your card balance automatically paid by direct debit? This is how mine is set up - i use it as a 'interest free loan for a month' - it helps when i'm slightly off in my monthly budget or wish to purchase larger items online.
Great as an emergency card when you're on holiday also0 -
I've heard that paying off cc in full every month can lead to the cc being cancelled as unprofitable for the cc company. Anyone got a way round this, aside from not paying off monthlyThis is an open forum, anyone can post and I just did !0
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I've heard that paying off cc in full every month can lead to the cc being cancelled as unprofitable for the cc company. Anyone got a way round this, aside from not paying off monthly
It seems that the only card company that actually does this is Egg. The way round it that I have found is to have a Savings account with them: my savings account has a balance of 46 pence, which has not changed for the last three years! However, it means that I seem to be on their list of valued costumers.
The Egg Money card is actually pretty good, because it pays you back one per cent of everything you spend on it. And I always have my balance paid by direct debit and so have never paid them any charges.0 -
Hopefully my cc provider won't cancel me then, they hold my current account.This is an open forum, anyone can post and I just did !0
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ringo_24601 wrote: »I've done this ever since I got a CC, 4 years ago. Not heard the bank complain yet
Nor me, and I've been doing so for the best part of 30 years!Stompa0 -
CCs can help build up a credit rating where before you had none.
The main reason I have one is because my meastro DC is not accpeted for many online purchases and for many Hotels and Car Hire etc...[FONT=Arial, Helvetica, sans-serif]Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.[/FONT]0
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