Why Use Credit Cards?

Mrs_Ryan

Cant say fairer than that, Loopygirl.

Yes, I have a credit card, yes it is maxed - but unfortunately a lot of that is down to the failings of my debit card. I would love to have not had to pay for my train pass to work for 7 months with my credit card,but unfortunately I had to. In this case, it was an absolute necessity. Yes, Im sure LO and SB will bleat I could have used cash, but 1) I dont pay cash, for anything, and 2) my originating station is a very intimidating place, not somewhere you really want to walk round with £200 in your pocket.
Yes, I use it for other 'frivolous' things, and only today I used it to pay for a hotel for my best mate who doesnt have a card, but I dont mind. I have been in the nasty, unfortunate position of having 2 debit cards from 2 separate banks cloned, and although they didnt get anything luckily as my banks were on the ball, I could have had my current accounts cleaned out. That's why I feel so much safer using my credit card.
There are two sides to every story, so as LG says, stop criticsing those who use credit - there may be more to it then meets the eye.
Just to add JW - yes, they may not have been necessary in the past - but society has moved on - ours is now no longer a society built on cold hard cash as it once was - it seems now without a card of some description some look on you as a social pariah!!!

storminbalder

YorkshireBoy wrote: »

Maybe the threads you saw related to car hire abroad, where it is nigh on impossible to pay with anything but a credit card?

My experience of car hire abroad was limited to once about 15 years ago in the USA. And yes I did use a credit card (I had one then). So for all I am aware, you are probably correct as far as the USA is concerned. I would add though that, although I cannot be certain, i'd be very surprised if this was the case in France or Spain where credit cards are very uncommon (especially in France A.F.A.I.K).

I thought I did make it clear though that I was refering to the situation in this country.

Loopy_Girl

jasonwatkins wrote: »

that we never used to, and he believes, as do i, that the credit culture is not a good thing

But we used to send canaries down the mines and children had rickets and we used to only get 4 channels on the telly....but we don't now as times change. Whether you choose to change with them is your own choice and you can't question other people's way of living as it's frankly, none of your business. You don't have to join in with the credit culture. You can keep your cash under your bed if you want but this is the 21st Century and this is how we live now - time can't be turned back

YorkshireBoy

storminbalder wrote: »

i'd be very surprised if this was the case in France or Spain where credit cards are very uncommon (especially in France A.F.A.I.K).

I've no experience in France, but certainly there have been many threads relating to car hire in Spain and the Spanish Islands and, from memory, I've not seen reports of debit/cash being readily accepted. Indeed, around late Spring/early Summer there's generally a flood of posts on this board from people panicking because they've realised they need a credit card to pay the deposit at the airport on picking the car up.

Don't recall many posts on UK car hire though?

storminbalder

Mrs_Ryan wrote: »

Cant say fairer than that, Loopygirl.

Yes, I have a credit card, yes it is maxed - but unfortunately a lot of that is down to the failings of my debit card. I would love to have not had to pay for my train pass to work for 7 months with my credit card,but unfortunately I had to. In this case, it was an absolute necessity. Yes, Im sure LO and SB will bleat I could have used cash, but 1) I dont pay cash, for anything, and 2) my originating station is a very intimidating place, not somewhere you really want to walk round with £200 in your pocket.
Yes, I use it for other 'frivolous' things, and only today I used it to pay for a hotel for my best mate who doesnt have a card, but I dont mind. I have been in the nasty, unfortunate position of having 2 debit cards from 2 separate banks cloned, and although they didnt get anything luckily as my banks were on the ball, I could have had my current accounts cleaned out. That's why I feel so much safer using my credit card.
There are two sides to every story, so as LG says, stop criticsing those who use credit - there may be more to it then meets the eye.
Just to add JW - yes, they may not have been necessary in the past - but society has moved on - ours is now no longer a society built on cold hard cash as it once was - it seems now without a card of some description some look on you as a social pariah!!!

I have no criticism of credit card users per se. Only those that blindly encourage others to use them

I am interested, however, in your experience with trains. I don't travel by train often, only about 4 round trips a year (to see my favourite football team who are inconveniently located on the other side of the country), but have had no problem using a Maestro card at stations or on trains. I have heard that some people have had problems with the Visa Electron though. Is this the card that you used?

storminbalder

YorkshireBoy wrote: »

I've no experience in France, but certainly there have been many threads relating to car hire in Spain and the Spanish Islands and, from memory, I've not seen reports of debit/cash being readily accepted. Indeed, around late Spring/early Summer there's generally a flood of posts on this board from people panicking because they've realised they need a credit card to pay the deposit at the airport on picking the car up.

Don't recall many posts on UK car hire though?

A long time since I've been to Spain unfortunately, so perhaps things have changed there. But France I know better, and am certain that if French car rental firms didn't accept debit cards they'd soon be out of business. That is because a French person with a credit card is a very rare breed indeed. In fact there was a segment on BBC news only a few days ago concerning this as one of the main differences between out two countries.

Mrs_Ryan

storminbalder wrote: »

I am interested, however, in your experience with trains. I don't travel by train often, only about 4 round trips a year (to see my favourite football team who are inconveniently located on the other side of the country), but have had no problem using a Maestro card at stations or on trains. I have heard that some people have had problems with the Visa Electron though. Is this the card that you used?

No, its a Visa Debit.

But Im locked in battle with my bank at the minute as the card chip is reading as Visa Electron and it shouldnt be.... its a huge huge pain as it reads everywhere else as a Visa Debit but for some reason on their systems it reads as an Electron - automatic rejection as their systems are too old to handle these cards.

Tribulation

storminbalder wrote: »

I have seen threads such as:

"How cool does your credit card look".

"The sub-prime credit card club".

This is to name but two recent examples - there are others. One of these seems to glamorise credit card use, whereas the other intends to encourage the most vulnerable to apply for and accept credit cards.

While I know what your saying, it's not necessarily true.

I'm active in the sub prime club thread. Does that make me vulnerable? What the sub prime thread does is help those that for one reason or another either have no credit rating and are having trouble getting a card (no previous credit history) or those that have ruined credit ratings, start rebuilding their ratings.

It could be argued that some of those in the second category will be the sort of person that originally couldn't manage their money, and when they get a new credit card, will end up seriously in debt again, and back where they started.

But you are going to get that in any situation anywhere (eg, a shop selling alcohol attracting alcoholics).

But that isn't the point or aim of the thread. It isn't there to encourage the most vulnerable at all. It's there for the reasons I mentioned. Lets use myself as an example.

10 Years ago I was earning 42K per year, huge mortgage, living in Guildford when I became ill. Discussed things with my wife and we decided to move to a part of the country where house prices were cheaper hence have a much much smaller mortgage. In the 9 months it took for our house sale to complete, as I was now earning nothing, we got into a bit of debt. we arranged minimum payments to the debtors until things improved. This obviously affected our credit rating.

In order to get a mortgage when we moved, we had to go the secured loan route with a highish APR as this was the only way we could get our house, as I was on benefits (house worth 3 times what the loan was). Might seem odd to you, but it was a tiny amount compared to what we were paying in Guildford and we could easily afford it.

We were banking with A&L, but there was no branch in the town where we moved to, so we applied to a few others. As I was on incapacity benefit, most didn't want to know, but Lloyds gave us a basic account which did us fine.

Roll on a few years and we had paid back every penny of money we owed our debtors (although one did give us a default when we originally got into problems).

My wife has been successfully running her own business for the last 3 years (mobile hairdresser with full books, never needs to advertise) and we now have a MUCH larger disposable income than when we lived in Guildford and I earned 42K.

But due to my illness, we have a bad credit rating.

2 years ago we got rid of our loan and changed it into a mortgage (over the same amount of remaining years) at a decent interest rate (was paying half the amount, and had enough left to have new windows etc fitted), ironically this was through the Lehman Brothers Group

We do need a credit card, I buy everything I can off the internet and save a fortune over buying in the high street, and the extra protection has been brilliant, especially when we had a problem with a new sofa. Had it been purchased on a debit card we would have had real problems, as it was a credit card, no problems at all.

But trying to get a credit card has been a nightmare. Yes I've got a capital one card with a £200 limit and a silly APR. Yes my wifes got a Vanquish card with an even sillier APR and a £250 limit. Yes my wife recently got accepted for a basic Barclay card with a silly interest rate and £1300 limit, although they wouldn't allow me to be a named card holder.

The Sub prime thread has been a godsend in helping us sort out this problem. Soon we are off to Florida, staying in Disney world for 2 weeks, flying with Virgin. This has all been paid from our spare disposable income over the last 14 months (we are not hard up), not brought on credit.

I need a credit card myself when I'm in the states, it's very hard there not to have one. I'll be driving the car, the holiday and car is booked in my name etc.

So when on the Sub Prime thread it mentioned the Flybe card, my wife applied.

Lats week we both got cards (me a named card holder) with a 5K limit and 19% APR. This means we can now get rid of the Vanquish, capital one and Barclays.

If we did need an urgent purchase, bearing in mind we've managed to pay for our holiday in 14 months (after paying for Sky TV etc), we shouldn't have any problem paying it back. We don't even need it for spending money in the US, we got a load of travellers cheques when it was $2 to £1. It's simply there to make our lives easier.

To quote the virgin brochure

It is standard practice in the USA for a hotel to get authorisation on an amount, normally $50 per day, but can be up to $400 per day depending on the standard of the hotel, which will reduce the overall credit limit on your card. So it's best to use a card with a high limit....

Again, we have all our spending money, but even so, the hotel will still want to authorise at least $700 and could easily be $1400 (not staying in 4 star so doubt it will be $400 per day)

Then there's the car hire, again these take a deposit off of the credit card.

There's the deposit for the room key etc etc etc etc etc etc etc

We could have done it just with the Barclay card but not being in my name would have been a pain. Now we know we can go there and simply not worry about how much the deposits are, we know the car hire will be hassle free etc and we have the sub prime thread to thank for that.

Most people in there are in situations where a major upset in their lives cause them to ruin their credit rating and they need to rebuild it. I disagree that it's there to encourage the vulnerable.

Mozette

The original question was "why use credit cards?"

I answered for the cashback.

OP said there were strings attached

I asked (several times) what strings?

Still haven't had an answer to that.

As I explained, I don't buy 'unecessary' things, I just put my purchases that I would be making anyway, by cash or debit card if I didn't have a credit card, on my egg money card, and let the money in my account get a bit of interest until I pay the full amount off my card by direct debit; I also get cashback on all my spending. This gets me about £100 a year, which I find helpful.

I further explained that, for example, when my boiler unexpectedly broke down, I used interest free credit to replace it and paid over 12 months, which meant that I paid only the cost of the boiler; my non credit card options would have been an overdraft or a loan, both of which would have cost me in interest - not very money saving in my opinion. I was not prepared to do without heating and hot water for 12 months while I saved up for one.
Maybe that makes me a bit of a softy, but okay, I'm a softy then!

This site is a money saving site, so I will continue to promote the money saving use of credit cards, and continue to discourage the profligate use of them.

The misuse of a lot of essential items causes untold misery, as I was trying to illustrate - I know people who have ended their lives prematurely through the misuse of:
alcohol (though wine has health benefits in moderation)
Rope - he was depressed and hung himself, though I can't imagine the shipping industry for example, getting by without rope
Trains - she was sober, drug free and with no discernable problems, but stepped in front of a train. I still find trains the best way to travel the couple of hundred miles to see some of my relatives.
I could go on, but perhaps now you understand what I'm saying.

Credit cards can be helpful if used properly, or cause misery if misued. They're not compulsory however, so if you choose to get by without them, fine. If you choose to use them responsibly, fine. If you choose to misuse them, wake up, smell the coffee, and get yourself some financial help. You could try the DFW board on MSE!

johnllew

Excellent post, Tribulation; I am very impressed.