Am I being silly? ditching CC?

SnowTiger

Mimi_Arc_en_ciel wrote: »

I'm torn between what to do!

I know im living within my means and gaining rewards but equally, i know i will be stuffed if i tried to stop using the credit card unless i dipped into my savings

I think I understand what you're saying.

When you get a credit card you, effectively, get four to eight weeks of free money, then live in debt. Although if you pay the balance off every month it's interest free debt.

I guess you look at your credit card balance and feel that you're always playing catch up.

If you want to switch to using a debit card as your primary source for spending I guess you'll either have to do the transfer slowly or bite the bullet and dip in to your savings.

Or, maybe, live with the fact that £1,000 of your savings are only on loan to you.

molerat

The problem you have is that you have detached your credit card from your bank account. I use a spreadsheet with a big box at the bottom showing how much I have left to spend that month, the actual balance in the bank account is of no real relevance - except it should not go below £0 - as some of that money is already spent. If I overspend, even though my bank balance is positive, it turns red and I suspect if you did the same yours would be red. You need to start paying down the permanent "loan" you have from the credit card.

My spreadsheet currently manages 3 credit cards, spending account, budgeting account and savings account all using one Santander 123 account. Keeping the balance above £3K means 3% interest.

planteria

SnowTiger wrote: »

Or, maybe, live with the fact that £1,000 of your savings are only on loan to you.

good point. and living with that should be ok. it is an interest free, credit history-building loan.

InsideInsurance

At the moment you are living a month in hand because of the use of the credit card. That in itself isnt a problem as long as you have a pot of money somewhere which is sufficient to clear the credit card. You need to mentally separate that money from your normal savings and so if you do decide to ditch the cards you've the funds there to make up the shortfall for that one month and your not raiding your savings.

Personally I do the same though my average month is above your £1k. I know that I am making interest with the money in the bank, I get cashback on my MC card and MR points on my AmEx. Add all those together and the strategy is certainly worth while for me

Mimi_Arc_en_ciel

At the moment I have just a simple excel sheet. It tells me when money is going into my account, what money is going out and how much i have left.

I’ve nipped onto the OS board – There’s a post there already J

Looking at my statement there is a few things that i SHOULDNT be buying on my CC, but I’ve bought them using my CC because i would buy them anyway and figured i would get points too.

I’m not in trouble with it – because i do have money set aside to pay it off – i’m just worried about getting in trouble with it (Due to ex and his debts)

Counter

Mimi_Arc_en_ciel wrote: »

Looking at my statement there is a few things that i SHOULDNT be buying on my CC, but I’ve bought them using my CC because i would buy them anyway and figured i would get points too.

What do you mean by this? If you were going to buy these things anyway, what is it about them that means you shouldn't have used your credit card (and gained ponts in the process)?

If you are using your credit card as a debit card (as you are), you certainly need to ensure you don't get drawn into making additional purchases above your ability to repay, but you say that these are purchases you would have made anyway.

InsideInsurance

Mimi_Arc_en_ciel wrote: »

I’m not in trouble with it – because i do have money set aside to pay it off – i’m just worried about getting in trouble with it (Due to ex and his debts)

People get in trouble because they start spending more than they have set aside and start allowing balances to roll forward and thus start incurring interest.

That happens though irrespective of if you put your daily spending on a credit card or if you only use it for "emergencies" or treats.

You need to ensure you have a slush fund or at least a plan of what you do if the washer or TV dies or the car fails its MOT etc (or in many cases if you have a really bad week a fund to buy that handbag/ shoes/ gadget or whatever your poison is)

Mimi_Arc_en_ciel

Oh I mean things like putting car repairs on the CC.

I only intended to use it for 'daily' spends but have slipped into the 'use it for all'

planteria

if you have a bill to fix your car which you need to pay, and you have space on your credit card, you might aswell use your credit card. you aren't getting yourself in a worse position by doing so.

you just need to become clear & comfortable with the way you are handling your own finances, which seem fine to me.

[Deleted User]

I've not read through every response above so apologies if this has already been said.

OP, what you are doing is absolutely fine. So long as you aren't spending more than you can afford to pay off then you are using credit cards in absolutely the most efficient way.

Ultimately, if you're paying off in full each month and not spending more than you would otherwise, what difference does it make which colour of plastic you pay with?

I for one use credit card for almost every single transaction I make each month. My current account has a couple of DDs but other than that it's just pay going in and CC bill going out.

I'd keep using the CC if I were you - extra protection, building a good relationship with the lender for the future, looks good on your credit file and (I find) makes it easier to budget.