having no credit cards

sunshine-55

I was under the impression that to have a credit card and pay the balance off regularly helps your credit rating.

I like the idea of saving the money in a bond and then paying it off at the end of the 0% deal.

I use mine for any on line purchases and petrol, putting the money aside. I am not sure that not having one is a virtue, or have I misread the inference in some posts.

atilla

sunshine-55 wrote: »

I was under the impression that to have a credit card and pay the balance off regularly helps your credit rating.

It does. Gives the banks some history to go on.
Use them sensibly, as many posters have suggested, then it is pain free.

That credit rating could be all important at some time in the future when/if needed.

GSMAnon

sunshine-55 wrote: »

I was under the impression that to have a credit card and pay the balance off regularly helps your credit rating.

It does, as long as your balance is only ever a small percentage of the limit and you always pay off near enough the full balance each month.

In the short term, a new credit card gives you a slightly worse credit rating though as lenders like to see relatively old accounts that have been maintained and paid well for a long time. A new account means a new credit search, and might suggest that you had a recent requirement for more credit, which is likely to be viewed negatively.

But a mature account with a strong payment history and low credit useage is a very good thing to have on your credit report.

I like the idea of saving the money in a bond and then paying it off at the end of the 0% deal.

I use mine for any on line purchases and petrol, putting the money aside. I am not sure that not having one is a virtue, or have I misread the inference in some posts.

Depends on your situation. If you don't need credit and won't need credit in the future then there's no need for you to have a strong credit history and no need for you to take out a credit card just to show that you can use credit responsibly.

If you never buy online or make huge purchases, then you don't need the legal protection offered by a credit card.

If you need a strong credit report and frequently make these kinds of expenses, then a credit card is a good thing to have, as long as you never treat it as some sort of additional spending power, and only ever use it for the purposes of demonstrating responsible use of credit and for the legal protection.

Torry_Quine

The reason I've never had one is that they really weren't readily available or affordable when I first started earning so most people never had them. In fact they were very much frowned on so I just never felt the need to get one. I have never taken out any credit other than a mortgage which is now paid and a pay in 12 months with no interest. Don't go abroad or spend large amounts on-line so don't see what advantage having one now would be.

Kitte

Gromitt wrote: »

What hassle is there? You still have to stick your card in a reader and type your pin, the only difference is one comes from your bank account straight away and the other comes out after they have sent you a statement. I prefer the later as I can budget better.

See, I prefer the former as I can budget better. I work a month ahead rather than a month behind. My pay in December pays for my expenses in January.

Actually using the card is no hassle, of course, as a debit card is the same. The hassle for me comes from running multiple accounts and integrating an additional card into my very particular and anal finance system I have built.

If you're the sort of person who lets the balance build up until you get a statement and then pay it off by direct debit then I can see how there would be no hassle. Ultimately that doesn't really work for me.

Out of my total annual expenditure, which is about £20k, I can only put £6.5k on a credit card. My highest cashback card gives me 1% which is £65/year. Assuming I utilised the full amount of interest-free period and kept the balance in a savings account, that works out about £15/year interest lost.

For me, £80/year or about £6.50 a month is simply not worth it. If I spent a lot more and the savings were greater, I would probably put up with the additional hassle.

PS. As mentioned, I do have a credit card for online/large purchases but to be honest it is rarely used.

wadewadewade

cgk1 wrote: »

Right, we pay everything in full each month and get lots of freebies (wine, hotel rooms etc) plus the legal protection. The paradox with credit cards is that they are very useful if you don't actually need them.

This.

I have 3 credit cards – Amex cashback card (used for daily spending - paid off in full every month), Halifax clarity card (for overseas spending and any payments I make through work where they don’t take Amex – paid off in full every month) and a Barclaycard platinum with a 0% interest rate for 14 months that I’m using as finance on a motorbike (insurance was a lot cheaper if the bike was bought outright) and I make regular payments that’ll clear the balance 1 month before the 0% period ends.

So, if you can make them work for you, then credit cards are very useful. If you’re using them to spend money you can’t pay back, then they’re a very bad idea.

Another advantage of doing all day-to-day spending on a credit card is that it shows me how much I spend on regular "day-to-day" things and makes it easy to keep track of that vs. bills coming out of my bank account.

andrew-the-cat

My life has not changed at all since getting a credit card, I still only buy stuff which I can afford.

Oh sorry I lie, there is a difference, I can pay for food in Subway and Mcdonalds just by holding the card by the reader

Rupert_Bear

Personally I would not be without my credit cards. Provided you treat them with respect and show them who is master they are brilliant. My favourite one is the former Egg money card. I get cash back once a year. I can also use it for paying my council tax and water bill. Used sensibly a credit card is a great aid.