Advice on credit card

tim131

Hi there, I don't have a credit card, so don't really know too much about them.

I am looking to get one so I can book a flight just now and get a good price, and then just pay off with my wages each month, which should only take 3-4 months.

I already have an overdraft of £450 with the Bank of Scotland, which I go into every month, however, now I am in a decent job, I should be getting out of this in a few months too! I make just over £1000 a month.

I'm just wondering if this is a good idea, I am very weary about credit cards, and would traditionally prefer to save and then buy, but flights can be hit and miss in that regard. Bank of Scotland have an interest free one for the first 13 months, and then 17% therafter. Is this good? Does it mean if I were to buy flights, I would essentially have 13 months to pay them off?

As I say I am very weary about credit cards, which is why I am asking for advice here, maybe I would be better off saving? I do have other debts elsewhere, like an interest free overdraft, would this be a hinderence?

Many Thanks,

Tim

InsideInsurance

If you had 13 months interest free card then you'd have 13 months to pay it off if you bought the tickets the day you got the card. If you buy them later then you evidently get less and you must still make monthly payments (its not like BNPL offers)

Certainly having a card for points, cashback, emergencies or S75 protection is sensible. IF you can manage your self properly then the best you can do is have your cash in savings earning interest and you buying using a card that gives you something in return (eg cashback) on everything and then your saving yourself a reasonable percentage BUT it does require you to not overspend and unfortunately thats where people can go wrong because as soon as you start paying interest you'll very quickly wipe out the benefits you were seeing.

unimaginative_user_name

You would also need to bear in mind that even with an interest free card you would still have a minimum payment each month. You can set up a direct debit from your current account to get this paid automatically. If you don't pay the minimum on time each month you are likely to lose the interest free deal so you would still need to be disciplined to make sure you had enough funds to cover the dd.

Having described the dangers I have to say that a credit card could be useful in your circumstances provided you are organised with it.

tim131

Thank you both for the reply, it has helped a lot, and makes loads of sense.

When you say I will have a minimum amount to pay back monthly, is that just the amount I borrowed on the card divided by 13, or is it worked out in a different way? I don't think that will be too much of a problem, as I plan on paying a couple of hundred off per month - the flights should set me back 600ish

Thanks again - oh and say for example, worst comes to worst, and I cannot pay the balance by the 13 months, I can transfer the balance to a new credit card, is this the case? Is that essentially me taking out a credit card, to pay off my other credit card? it wont get to that stage, but I like to know all outcomes.

Apologies for all the questions, I am just apprehensive about finance and debts

unimaginative_user_name

As far as I know the minimum payment is a (fairly low) percentage of your outstanding balance or £10 to £25 depending on tne card if this is higher than the percentage. You would need to check the terms and conditions of your particular card.

If you haven't paid off the full balance by the end of the interest free period you could apply for another credit card at 0% although there's no guarantee that you would get one and there would be a fee of around 3% of your balance typically. If I were you I would either a) pay off the balance in thirteen equal installments as you suggest or b) pay thirteen equal installments minus the minimum payment into a savings account each month and then clear the full balance when the 0% deal is about to end. In the second scenario you could earn a little interest.