Confused about credit cards

Windsor70

Hello

I have never had a credit card before, and have applied and been accepted for one. Before I sign the agreement, can some one advise as to whether I would get charged if I do not use the card? I want this as an "in case of dire finances", I have the card as a last resort.

Is a credit card the best option?

Thanks in advance for any advice.

Cycrow

you wont get charged for not using the card.
but if you dont use it for long periods of time, they may simply cancel it.

a credit card isn't really a replacement for an emergency fund, instead its better to put money away each month to build up an emergency fund that can then be used when you need it

lisyloo

Some credit cards do charge an annual fee, so you'd need to check this.

The best option for emergencies is to budget.
A number of events are forseeable - like home or car expenses.
Many of us have an "emergency fund" for redundancy, breakdown etc.

Credit cards also have many useful features such as they can protect you if a company goes bust or you have a dispute.

Yes you could use one in emergencies although it's an expensive way to get cash.

Windsor70

Thanks for the replies, I understand about budgets and normally budget my finances to get me through the month. This month, which is not the norm, my wage packet will not cover my outgoings and some numpty decided to key my car so I am trying to weigh pros and cons as to whether this is the best option as I don't want an overdraft, loan etc and because I am currently debt free do not want to end up with a massive debt.

Vortigern

Make a small purchase each month. Pay it off IN FULL each month. This will improve and build your credit history which may be useful if you ever need a loan or a mortgage.

CLAPTON

Windsor70 wrote: »

Thanks for the replies, I understand about budgets and normally budget my finances to get me through the month. This month, which is not the norm, my wage packet will not cover my outgoings and some numpty decided to key my car so I am trying to weigh pros and cons as to whether this is the best option as I don't want an overdraft, loan etc and because I am currently debt free do not want to end up with a massive debt.

this is exactly why you need to build up some saving to pay for unexpected expenses : if you have a car then it's virtually certain to have the occasional big expense


however, with a CC it's best to use it every month for some normal spending e.g. petrol but pay in full after the bill arrives (best set up a DD to pay in full)
this will enhance your credit rating which may be useful if you ever apply for a mortgage and prevent it being cancelled for non usage

lisyloo

some numpty decided to key my car

It's entirely up to you, but that doesn't sound to me like something you have to attend to immediately.
You can pay most garages by credit card so that would give you a very short term loan.
Borrowing cash from a credit card is an expensive way to borrow.
Your decision but you could always wait and save up.

I don't want to labour the point, but inevitably in life something will go wrong, so if you have a house and/or car or even just appliances - then they will go wrong at some point, so you do need to expect this.
The normal way to deal with this is to save a little each month for an emergency fund. You should also think about death, sickness, accident and redundancy.