Budgeting help needed, Credit card or Bank Account for spending ?

gettingthere28

I need a bit of help with budgeting, and I am looking for suggestions:

I have £5k in Lloyds Vantage

I have £24k in Lloyds incentive saver (The special one)

Barclays Current Account

Lloyds Premier Duo Credit Card (Paid off in full ever month)

Barclaycard (Nil balance and not used)

At present I put all my spending on my Lloyds Credit card and this is paid each month from my Lloyds account, although I only now use the Lloyds Current account as savings and the only bill (Direct Debit) that is paid from it is my Lloyds Credit Card.

I use the Barclays account for the normal day to day stuff and bills.

Now next Monday the Direct Debit will come off my Lloyds account and is for £1,589.18 which is normal for a month. This will drop the balance in the Lloyds account and I will transfer funds from the Savings account to bring it back up to £5k.

But it has made my think that would it not be easier just to pay everything from my Barclays account using my debit card and stop using the Credit Card, which would stop one large bill every month, and the Barclays balance would go up and down throughout the month as I was spending but also getting paid, or should I only put groceries on the Credit Card and petrol and other things just buy from my current account.

I would be grateful for any help, I guess I am looking to stop a big bill once and month and maybe either reduce it or smooth it out throughout the month. Another point is after May the £24k is out of Lloyds and into Northern Rock / Virgin as that is when the special incentive saver stops.

mgdavid

good lord no wonder you're confused, I am too. However have you managed up to now? (no need to answer that).
1. Keep savings separate from 'current cashflow'.
2. Have one (only one) current account, which your salary goes into and your standing orders and direct debits for regular bills go out from. Try to arrange all SOs & DDs to be dated in the first week after payday. Use the debit card on this account for day-to-day spending (shopping) and 'pocket money' cash withdrawals.
3. Have one (only one) credit card for emergency purchases i.e. anything larger than what you need in the current account to last the rest of the month (but ideally wait until you can afford it from savings).
4. Anything left in current account at next payday, transfer into a savings account (after paying credit card bill of course).

pqrdef

Personally I prefer the arrangement you've got. Debit cards scare me a bit after reading horror stories about authorisation holds, but mainly, I wouldn't want to have to keep track of my current account balance while out of the house. Credit cards seem less fraught. But I do use cashback cards.

mgdavid

pqrdef wrote: »

......... Debit cards scare me .......

oh dear.... an opinion, but perhaps not very useful to the OP.