Credit Card Balances - Pay off Monthly

mehak_327

Hi,

I've been wary of credit cards but then a friend pointed out that as long as you pay off the entire balance every month its like having free credit. And add to that with some of the cashback cards/point based rewards it like getting freebies.

My question is - do people manage to pay off the entire balance every month ? Is this the norm ?

nzseries1

If you are disciplined, and don't spend any more than you would have anyway, and pay the balance off in full each month without fail, then yes it is like getting freebies!

I used to be bad at paying only part payments, but then I realised the interest I was getting charged each month and now I pay the entire balance off in full, no exceptions.

Buddingblonde

I did at the start but then very slowly it crept up and up and up until I owed £5000

If you are planning on having one then make sure you have a direct debit set up to automatically pay it all off - that way it gets paid.

Natti_A

I have struggled to pay off the full balance monthly, so i reduced my credit limit to £350 which i can now nearly always pay off fully each month.

If i need to do a big purchase on a card, i always call up in advance and see if i can get a larger limit. Once its paid off i put it back down again!

Moggles_2

Natti_A wrote: »

I have struggled to pay off the full balance monthly, so I reduced my credit limit to £350, which I can now nearly always pay off fully each month. If I need to do a big purchase on a card, I always call up in advance and see if I can get a larger limit. Once it's paid off, I put it back down again!

I would think carefully before you reduce a limit like this, which is already modest. It isn't always possible, in the current economic climate, to re-instate some of the old limit should you change your mind later.

What's more if you accidently exceed the limit, you've broken the terms of your agreement, which has more serious consequences than going over your budget.

With today's online facilities, it's never been easier to keep track of your spending from day to day

lisyloo

as you pay off the entire balance every month its like having free credit

This is true for purchases but not for "cash".
That means cash from an ATM (obvious) but also purchasing foreign currency, on-line gambling sites and might in some cases include vouchers.

I think the posts above show that credit cards can be very useful if well managed.
You also get some protection under the consumer credit act, so if the company goes bust and the item is pver £100 then you are covered.

However if not well managed then credit cards can lead to a downward spiral because the interest mounts up and adds to the debt.

So it really is key to be disciplined.
If you follow the very simple rule of "Don't buy anything you wouldn't purchase anyway" then you'll be fine.

latecomer

I have only ever spent what I can repay so I do clear my balance every month. If I cant afford it then I dont buy it. Average monthly balance between our 2 main cards is approx £1000 which is cleared by direct debit.

I find credit cards very useful for buying everything I need. We've got a Amex cashback card which will return some amount at the end of 12 months. If you are the kind of person who buys things without thinking then I would be careful as others have said. If you are disciplined then go for it but if it starts to create a problem cut the card up immediately, clear the balance as soon as you and the then avoid for a while until you are ready to try again.

anna42hmr

mehak_327 wrote: »

Hi,

I've been wary of credit cards but then a friend pointed out that as long as you pay off the entire balance every month its like having free credit. And add to that with some of the cashback cards/point based rewards it like getting freebies.

My question is - do people manage to pay off the entire balance every month ? Is this the norm ?

i do, all my cards (bar a 0% one i am paying a set amount each month) are set up for a direct debit for the full balence each month

withnell

All my cards pay off full balance each month - just think of it like not having to carry cash around, just make sure you don't spend more than you would anyway. You also get the extra savings interest on the money until the bin comes!

cifpower

I didn't use to pay my CCs in full every month. However, I am clearing my main card in big chunks and once cleared it will be paid off in full every month. I really resent paying interest

Geenie

CC's are a great tool if you use them wisely. They make life so much easier for buying online and paying for something large in one go, plus you get added protection. They also enable you to keep your money in an account earning interest, ( :rolleyes: well they did at one time) a month or so longer then paying for something up front with cash.

However, as others have stated, you need to be very disciplined and not spend more on it then you can afford to pay off each month, else whatever you have bought will have cost a whole lot more by the end. I have only ever had 1 CC, though I have been offered countless others and storecards over the years. Fortunately, I have always been a gal who can say NO.