Do i NEED a credit card

gglaze

Just to summarize/add to what people have said here..

Yes, you can "live" your whole life without a credit card, if you choose to do so. Some people also choose to live without electricity, live without keeping their money in a bank, live without email/mobile phone/etc. All of these things are possible. But for the rest of us, we might argue that they are missing out.

Here's my list of points about why you should get at least one credit card, and try to use it for your regular purchases as much as possible, and also pay it all off each month if you like.

* Build credit history - for example, if you ever plan to buy a property with a mortgage; or even if not, in case you some day need an emergency loan for whatever reason, medical emergency, family emergency, legal emergency; honestly, you never know what can happen, it's good to have some decent credit as a safety net just in case;

* Payment protection - although presumably you also get this if you are paying by your debit card;

* Cashback - by not having a decent cashback card (such as Aqua), you are throwing away £100s that you could have otherwise had for doing nothing but spending the way you already do; also in this category, you could consider rewards, points, vouchers, etc; which are all basically other forms of "cashback" that you are otherwise just throwing away.

* Mobile phone applications, other things like that that require some credit history;

* Bank accounts - apparently (I recently learned this the hard way with Halifax) even banks do credit checks and use those to decide whether to approve your application for a bank account;

* Car rental - I've read various things about the UK and about other countries about whether you do or don't - but I can tell you for a fact, at least if you travel to the US, you absolutely must have a credit card to secure a rental from most car rental companies - they usually will not accept a debit card;

* Grace period on purchases - it's a minor detail if you are already used to paying for things when you need them; but sometimes it's nice to have a little buffer (the "up to 56 days interest free thing") on some purchases, as long as you still have a plan for when you can get your paycheck or whatever to pay them off;

* Foreign exchange - there seems to be a consensus here that these days the best foreign exchange rates you can get are often on some of these foreign-transaction-friendly cards. So again, if you do your FX any other way when you travel, you are basically throwing away a bit of money.

* Emergency credit - again on the point about "you never know what can happen" - even though you may plan to never ever leave a balance on your credit card, and always pay off in full at the end of every month, it's still nice to know you have some credit available to you just in case of emergencies; you're still quite young, so maybe you haven't been in any situation like this - but trust me, eventually it happens to all of us, and your parents won't always be around as your safety net; hope for the best, but plan for the worst - just in case!

Also, just to re-iterate a point made on another thread here recently about "how many credit cards should you have" - the general consensus seems to be, you should have more than one, at least 2 or 3 - for example, it's good to have a backup card in case your main card is blocked or whatever; and also because different cards offer different benefits like the ones i've mentioned above - i.e. one card for cashback, another for foreign exchange..

In addition to Aqua, another card a lot of people seem to recommend for building up credit is CapitalOne.

CLAPTON

neon92 wrote: »

A house and maybe one day a nice car would be the only exceptions to this i can think of. Currently live with a friend and the arrangement we have now works great.

Can anyone recommend any good cards that i could get with no credit history then?

I would suggest you try your own bank first as they know you manage your bank a/c well
Once you have had the card for six months or so and usedd it regularly and paid in full then look for one with 'benefits' ; I prefer straight 'cashback' but other like Tesco's points or whatever suits your life style.


I would strongly suggest you don't make an exception to your normal rule for a 'nice car';
start saving for that now along with the house deposit
(just look at the debt free wannabe board or the loan board to see how many people end up in big trouble because they bought a 'nice' car on credit and then circumstances changed.)