credit where credits due..

Anthorn

Herbalus wrote: »

And on the ability to budget - how is your method better than spending on a card and repaying it in full without incurring interest?

First of all a regular payment is easier to budget than haphazard payments which are not planned. Secondly spending on the card is mainly pertaining to the regular payment and not the other way around. In circumstances where spending is increased for example for me at Xmas the regular payment is increased or where a regular payment would result in a credit then some of it can be diverted to the rainy-day fund.

Credit should be seen as a method of extending income but using a card for everyday purchases only to fully clear the balance and start again the following month is restrictive.

I think most of the posters in this thread are incapable of understanding a simple concept but are nevertheless good at following instructions. So my last in this thread.

matttye

Anthorn wrote: »

First of all a regular payment is easier to budget than haphazard payments which are not planned. Secondly spending on the card is mainly pertaining to the regular payment and not the other way around. In circumstances where spending is increased for example for me at Xmas the regular payment is increased or where a regular payment would result in a credit then some of it can be diverted to the rainy-day fund.

I think most of the posters in this thread are incapable of understanding a simple concept but are nevertheless good at following instructions. So my last in this thread.

My current account always has more money in it than my credit card bill when it's due. I ALWAYS have more money available than my credit card limit, and I never max out my card, so I don't really have to think about it. It couldn't get any more simple.

SuperHan

Anthorn wrote: »

First of all a regular payment is easier to budget than haphazard payments which are not planned. Secondly spending on the card is mainly pertaining to the regular payment and not the other way around. In circumstances where spending is increased for example for me at Xmas the regular payment is increased or where a regular payment would result in a credit then some of it can be diverted to the rainy-day fund.

Credit should be seen as a method of extending income but using a card for everyday purchases only to fully clear the balance and start again the following month is restrictive.

I think most of the posters in this thread are incapable of understanding a simple concept but are nevertheless good at following instructions. So my last in this thread.

They are not 'haphazard payments that are not planned'.

I know what I have spent on my credit card, so I know what the amount coming out will be. I don't spend it on my credit card if I don't have it in my current account.

I cannot fathom how you think it is better to spend extra money on interest, when you don't have to. In fact, I would be in the same position as you if I carried on as I am, and then set fire to a ten pound note once a month.

I cannot see how my method is restrictive. I never think, oh I've maxed out my credit card, I can't buy petrol now. But I do think, oh I can't afford a £5k new car, so I won't buy it even though I have the credit limit too.

Are you saying that you just put extravagant spend on a credit card, and budget say £100 a month on extravagant spend.. So pay this every month to your credit card, regardless of how much you have *actually spent*.

And my credit cards - which are already prime, as my method has meant that I started with a student credit card and moved immediately on to prime cards - show a changing balance every month with the CRA, it goes up and down depending on petrol food and other spend. I don't spend the same amount on it each month.

It's fair to say, you haven't convinced me that wasting my money on credit card interest is a good thing...

eskbanker

Anthorn wrote: »

I think most of the posters in this thread are incapable of understanding [STRIKE]a simple concept [/STRIKE] one person's rather odd views on financial management but are nevertheless good at [STRIKE]following instructions[/STRIKE]financial management.

Fixed that for you....

UrbanSurferKid

Wow thanks guys, there is some really useful stuff on here. I had a meeting with my current bank today and ended up getting a pretty decent APR. So I think I will go down that road and proceed with caution.

Maybe after using this card for a while and fully understanding the concept I I can start looking at alternatives that may offer more rewards or suit the way I am actually using the CC. But as a first step I feel a lot better about my decision. Thanks for all your advice.

USK

Herbalus

UrbanSurferKid wrote: »

Wow thanks guys, there is some really useful stuff on here. I had a meeting with my current bank today and ended up getting a pretty decent APR. So I think I will go down that road and proceed with caution.

Maybe after using this card for a while and fully understanding the concept I I can start looking at alternatives that may offer more rewards or suit the way I am actually using the CC. But as a first step I feel a lot better about my decision. Thanks for all your advice.

As long as by "that road" you mean using the card for normal spending and then paying it off in full to avoid interest, you'll do just fine!

Anthorn

In reply to the foregoing: I know what my credit card repayments will be in November 2014 or March 2015 ... because I pay the same amount every month. Do you know that? No don't tell me, I know: It will be the full balance but you don't know what that full balance will be. Haphazard.

Here's something along the same lines from MSE relating paying the the same amount every month against paying the minimum payment every month:
http://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card#results

eskbanker

:wall:

It must be clear by now that you're not going to persuade everyone else on here that your way is better but if it works for you, then great. However, what is unarguable fact is that a repayment method that involves paying interest is inherently more expensive than one which doesn't, so your predictability comes at a price!

And the MSE piece you quote is making a different point, it's emphasising the benefits of fixing repayments above the minimum (which saves interest) rather than below the maximum (which doesn't)....

SuperHan

Anthorn wrote: »

In reply to the foregoing: I know what my credit card repayments will be in November 2014 or March 2015 ... because I pay the same amount every month. Do you know that? No don't tell me, I know: It will be the full balance but you don't know what that full balance will be. Haphazard.

Here's something along the same lines from MSE relating paying the the same amount every month against paying the minimum payment every month:
http://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card#results

But I know exactly how much debt I'll be in, and I know that in any moment in the future I will be in a position to become debt free overnight....

And I agree, paying a fixed amount is better than paying the minimum, but it's not as good as paying it all. The article says we want to clear our debt as quickly and cheaply as possible. I do, I do it monthly and regularly borrow money for free.