Should i get a credit card for the summer?

joe1991

Hi,

I have just turned 18 and have an income coming in of around £250 a month. (I am still a full time student doing my A-Levels).
I am going travelling with 2 friends this summer for 6 weeks to south-east asia. I have saved up £2800 for the trip and have already booked my return flights to singapore.
I have heard that a credit card has its advantages when spending in lots of different places everyday abroad as it often comes with insurance. I am just after some advice about whether there is any need for a credit card and if there is, which one would be the best to apply for.
I would be able to pay the bill all off at the end with the money i have saved up.
I also wondered if there would be a problem regarding paying off the credit card amounts when i am away?

If anybody has any suggestions and information on whether i should get one that would be great, and if so, any suggestions to which ones are the best ones for my situation.

Thanks in advance,

Joe

davetrousers

joe1991 wrote: »

I am going travelling with 2 friends this summer for 6 weeks

I would be able to pay the bill all off at the end with the money i have saved up.

You'll get a monthly bill. So paying it at the end of your trip will be late. You might need to pay off the minimum at a dodgy internet cafe or something!

Consider Nationwide. But with an income of only £250 a month I don't rate your chances

Or a Pre Pay Credit card.

Robert_Sterling_3

Have the money in your current account and set up a dd to pay the full amount off the card each month.

CLAPTON

It will probably be very difficult to get a CC at your age and income... best to try your bank.

If you do get one then the limit will be low ... probably 200 at most.
If you spend on the card then you will get a monthly bill... you must pay at least the minimum payment (usually 2-5% of the total)
-you can do this using an internet cafe from your current a/c
-or set up a DD (direct debit) for the minimum so you never forget (highly recommended) but of course you must have sufficient money in your current a/c to make the payment
-arrange for mum or dad to look after your affairs and make the payment for you

You should also ensure you have a proper debit card so you can draw cash from your current account while abroad.

chris.hoops78

Joe,

I would say first of all you need to be aware how dangerous the high interest debts that can accrue from credit card ownership can be.

My advice would be to stick to a card with a very low credit limit, say £500 and pay it off promptly every month in full. Preferably, you should not get a credit card at all, but I accept in your situation it may be useful.

The problem comes when the companies start upping your credit limit - it can be too much of a temptation not to spend to the max unless you are very disciplined and before you know it, you're on the hook.

Believe me, the last thing you want at your age is £2-3k or more in credit card debt at 30%APR. It's quite amazing how demoralizing it is paying close to £100 a month just in interest charges (for the rest of your life, if you don't pay off the balance.)

If I could go back in time and tell my young self to avoid debt like the plague, I would do. I'd be in a much better position now. Earn it first, then spend it. Credit cards can be useful, but should be treated with extreme caution these companies like nothing better than getting you into mountains of debt and collecting big, long term profits, believe you me.

joe1991

Thanks for your help.

The idea of getting one would just be to insure my purchases, and incase i got stuck and needed desperate financial help to get home.
I have already saved up more money than i plan to spend, knowing that i can afford to pay it off.
I don't really want to get a credit card, i would cut it up when i get home to save me being tempted to use it when i get back. However, if it's safer to use than a debit card and i can discipline myself into cutting it up and paying it off i realise there isn't many negatives.
I will continue to look around, and any more advice is greatly appreciated.
If i get one, i will also set up a DD from my current account to pay it off.
Are there any Debit cards out there which can offer insurance like credit cards?

Thanks alot for the advice so far,

Joe

CLAPTON

Credit cards don't in general offer insurance as such.

Its just that if you buy something on credit (i.e. using a credit card) and the supplier goes bust or doesn't provide the goods or services then the credit provide is jointly responsible under section 75 of the CCA... so you can ask the CC for a refund.
In practice it not always as easy as that.

So if you bought something and then lost it, you won't be able to ask the CC company for the money back.


Although there is no legal requirement to do so the VISA debit cards offer a similar offering.

Credit cards are useful if properly used especially while travelling as any emergency source of funds.. Althoguh a lot of people mis-used them nevertheless lots of people use them properly, pay them off in full each month and have no difficulties with them.
In later live, they are often essential if you need to hire a car or even book a hotel room.

deadhac

I was accepted for a credit card as a student, its easily possible. I applied online and when asked for my income I gave an 'optimistic' figure taking into account any temporary work overtime etc. Im not saying that you should lie to the bank, im saying dont! but when i did apply it did ask for my occupation in a drop down box, and there was an option for student.

Innocent_Guy

deadhac wrote: »

I was accepted for a credit card as a student, its easily possible. I applied online and when asked for my income I gave an 'optimistic' figure taking into account any temporary work overtime etc. Im not saying that you should lie to the bank, im saying dont! but when i did apply it did ask for my occupation in a drop down box, and there was an option for student.

Who was it you applied with? What was you limit..

Well done BTW!

deadhac

I applied for the airmiles duo with lloyds tsb. It has a limit of £1,000. I never intend to spend this much on it and i have set up a direct debit to pay it off in full each month. As a student with variable income, which is also low, i dont think i can stress how important it is not to start racking up debts on a card. Especially as a student loan only comes in 3 times a year, and a credit card statement is monthly. Student loans cannot be relied upon to clear credit card bills - unless a risky stoozing strategy is employed.