Using credit when you're debt free

copperclock · 14 February 2017 at 5:01PM

Just interested to hear people's experiences and opinions.

For those who are debt free (after previously being in debt): do you use, or intend to use credit for anything, or is it out of bounds entirely?

For those who are currently dealing with debt: when you become debt free will you ban yourselves from using credit, or do you intend to use it under certain circumstances?

Would love your thoughts. :A

Edit: by credit I mean credit cards, loans, car credit, catalogues, etc, but not mortgages.

Gettingtherequickly · 14 February 2017 at 6:04PM

copperclock wrote: »

Just interested to hear people's experiences and opinions.

For those who are debt free (after previously being in debt): do you use, or intend to use credit for anything, or is it out of bounds entirely?

For those who are currently dealing with debt: when you become debt free will you ban yourselves from using credit, or do you intend to use it under certain circumstances?

Would love your thoughts. :A

Edit: by credit I mean credit cards, loans, car credit, catalogues, etc, but not mortgages.

I use credit, but am very disciplined about it. I opened an account (thank goodness for online banking) and every time I use my credit card, I transfer the amount into this account, then transfer it back the day the credit card is due to collect, that way I have not spent the money and I am able to pay the card off in full.

I bought a new car a few months ago, well the car was only a few months old, so new to me and was debating on whether to buy it on finance or use my savings. The deciding point was the seriously atrocious trade in I was offered when I said I was trying to decide which way to go. Decided that I would use savings as virtually nothing in interest (Santander 123) in comparison to interest on finance. Doubled the amount I am paying into saving, so will be back to status quo in about 2 years.

GibbsRule_No3 · 14 February 2017 at 6:11PM

I have not used, nor do I need to use credit but from what I can see having a card actually improves your credit score. Cue posts about credit scores not meaning anything, but I do wonder if I take a card, will it get me a better bank account quicker than not having one like now. I could buy things on per month, like food shopping and obviously pay it off in full. I finished my DMP two years ago.

Grumpygit · 14 February 2017 at 7:09PM

I had credit cards and a consolidation loan and was "lucky" enough to be able to pay them off due to an inheritance, also to pay off OH's loan......I would have really struggled if that hadn't have happened to us from a very generous family member

We then bought a house so now have a mortgage - I have also taken out 2 loans since then back to back - one for laser eye surgery and then when that finished for a new bike.....both being paid off from my monthly pocket money.

We also have a loan for a car.

I've never done catalogues.

As for a credit card?? Nope - I don't trust myself - I know that I couldn't be that disciplined so it's safer for me not to have one.

OH has one which we use for joint purchases but it gets paid off pretty much straight away.

louby40 · 14 February 2017 at 8:06PM

I'm nearly Debt Free and desperately need a new kitchen. I shall have some savings before I get it done, but no where near enough to cover a major kitchen re fit so I'll need to get a loan.

My plan is to have a £2k emergency fund, get the lowest rate loan I can get and overpay when I can.

zenshi · 14 February 2017 at 8:18PM

I'm still in debt but have totally changed my mindset. I very much doubt I will ever have a credit card again.

I still have access to one through both of my kids who know my whole affairs. I use my daughters so she can get extra airmiles but only when I have the cash to transfer straight to her account. My sons card would be available to me in a dire emergency

I'm so disciplined now that I won't ever get in debt again once I'm clear

determined_new_ms · 15 February 2017 at 9:06AM

I use credit in loads of ways but like the first responder I am incredibly disciplined. After we got debt free in 2010 i took out a 0% on purchases card and began stoozing. Spent everything on it for 3 months and then put the money in a savings account. Have tarted it several times and it is due to finish when the current 0% runs out. We have been consistently earning £11-18 pm on this balance and do not miss the £25 minimum payment each month. So well has this gone I am about to do a balance transfer of £3000 into our account to do the same.

I use a cashback credit card for day to day spending and clear each month. and my oh has just bought a car on a cc and within the next month will do a balance transfer to another cc so he can pay it off over a year.

I think it really depends on whether you have the discpline. If you don't, don't use it.

-taff · 15 February 2017 at 9:21AM

I have a couple of credit cards, one for foreign travel, one for purchase protection.
Both are set up to be paid in full the following month

Helvetica_Van_Buren · 15 February 2017 at 10:02AM

- Credit SCORE don't hold any value
- The information in your credit report detailing how you manage your accounts DOES hold value

There's nothing wrong with credit generally. I put all my spending through cashback credit cards.

ReadingTim · 15 February 2017 at 10:18AM

s.75 protection for purchases over £100 and a Halifax Clarity card for purchases abroad are 2 reasons why credit cards offer greater protection or better rates than cash or a debit card. Then there's cashback or other loyalty points, interest free borrowing on purchases etc as part of special offers...

However, if you can't pay it off in full by the statement date or by the time the introductory offer ends, or generally lack the self-discipline not to spend what you don't have then maybe you shouldn't trust yourself to have one.

Keezing · 15 February 2017 at 10:40AM

I'm really enjoying the Revolut pre-paid MasterCard.

As far as I'm aware it comes with all of the protection rights a credit card offers, but you are only spending real money that you have.

It's great when abroad, too, as it uses the interbank spot exchange rates fee-free.

Using credit when you're debt free

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