Using a credit card with budgetting, please help!

aled247

Hello everyone. This is my first time here and hopefully I can help others in the future.

Firstly, I believe that for 21 I am smart with my money.
I have a basic spreadsheet which shows all my income (paid 4 weekly) and Bills which then shows how much I can spend on my debit card (santander) every 4 weeks without going into the red.

I also have savings set up as shown below and save £500 a month into my santander 123 account.

2x TSB accounts with £4000 in total earning £14 a month
1x Nationwide account with £2500 earning £8 a month
1x Halifax account earning me £5 a month
Santander 123 account (main account) earning £5 in cashback DD's
In total earning me approximately £32 a month off of £6500.

My problem.....
I have NEVER owned a credit card but I finally caved in when I was offered a 123 cashback credit card from Santander with £5000 limit. I will never use it for the 'credit', all that interests me is the cashback on Petrol and Groceries which I spend quite a lot on and to improve my credit rating as I want a mortgage in the next 3-5 years.

However, my inexperience with credit cards is causing me a headache and I need some advice from other credit card users who budget extremely well.

I genuinly thought a credit card would just be like a debit card when it came to tracking expenditures and being able to pay it off whenever within the month, how wrong I am.
I am purchasing things such as petrol and groceries which as we all know, would be instantly visible on my current account if paying for it with a debit card, however it is often 2-3 days before it shows on my credit card online, making it difficult to track.
I also planned on simply paying off the credit card expenditures each day from my santander current account meaning at the end of each day the balance on it would show £0, again I have found that I can only pay off items from LAST months statement, not the live month?! (not very useful when I already have direct debit set up to pay off the card in full on 27th of each month)

What I guess I am asking is how do you people who are as budgetted as I am, track credit card expenditure and where does the monthly bill fit in on your spreadsheet/trackers? Do you use the credit card as normal and then pay it off with the FOLLOWING months wages or something?
As stated, I am paid 4 weekly, and my credit card due date is 27th of each month, where would this outgoing fit in?

Hope this all makes sense.

[Deleted User]

Track your spend on the card was you go, if that help you. But leave paying the bill until you get the statement.

If you pay off as you go, then it will look as if you are not using the card and not help you build a decent credit history.

enthusiasticsaver

I have the Santander 123 current account and credit card and do as you do, only use the credit card for petrol, groceries and department stores. I also use the spending tracker app regardless of how I buy stuff so still keep in budget. I pay off the credit card bill every month. I would suggest that you do something like that rather than transferring from your current account each time you use the credit card as firstly it may cause confusion with you having an automatic credit card repayment in full each month and secondly you benefit from the interest it will accrue in the current account (3% gross on your balance).


If you download the spending tracker app on your phone you will still keep in budget even though you have a balance on the credit card until 27th monthly.


Well done on being so organised with your finances at your age too!!

molerat

I use a basic spreadsheet to run my 123 current account, 3 credit cards, budget account and savings. On the "current account" column there is a box at the bottom in bold that shows me what is left to spend that month after deducting the spends of the credit cards, that money is accounted for. The savings provides a buffer if the budget or current put the spending account into negative but it rarely happens. There is also 2 other 123's on there but that is more for convenience when transferring between them.

aled247

Hello everyone thanks for the advice so far I want to just pay it off on 27th of every month, my only problem with that is that as I get paid 4 weekly (not monthly) that means the dates over run so actually my spending budget could go up or down by 10's of pounds depending on when I have to pay the bill.

For example I get paid on 23rd jan, Then again on 20th Feb, then again on 20th March, then 17th April etc

Lets keep it simple and say I earn £1000 spending money on 23rd Jan, I then end up paying last months credit statement 4 days later, then I get paid on 20th feb which is BEFORE I get to pay my credit card statement making it tough to work out how much money I can spend.

Molerat do you have a template you can show me? I have tried putting on my template but as I am a new user it wont allow me to show you all

[Deleted User]

Don't rely on your credit card (or current account statement) for tracking purchases, instead track the purchases you make and use that as the base for your budget. For example if you spend £5.00 in McDonalds then record that in your expenditure, whether or not it's listed in your bank account (or credit card, or cash) should not matter. The actual balance of your bank account doesn't matter when budgeting properly, what matters is the amount your budget allows you to spend. If you have £100 in your bank account but a £50 bill is due, only your budget can correctly tell you that you have £50 available to spend.

If you have a debit card and a credit card and you are paying the full statement balance of your credit card every month you can simply consider your "available" balance to be inclusive of the credit card. For example if you have £500 per month available to spend from your current account and you decide to shift your spending to your credit card for rewards, you still have £500 per month available to spend and any payment (either from your current account or credit card) reduces your budget amount. The credit card limit doesn't matter.

If you only spend on the credit card for the rewards (never carrying a balance) then the date that you're paid doesn't matter, because you'll always have the full statement balance from your credit card expenditure available to you in your current account to pay the credit card off at the end of the month.

SuperHan

I have a separate account set up to track credit card spending. You could open a basic current or savings account with Santander, and every time you make a purchase, transfer the money from your 123 account to this secondary account.

Then when your credit card bill is due, you have the correct balance sitting and waiting to be transferred back to your main account for the DD. And when you look at your current account balance, you can immediately see what your 'spending' money is (less other direct debits).

The only problem with this is you will lose out on the 3% interest from your 123 account on these balances, but it shouldn't make much of a difference.

I don't earn interest on my current account, and TSBs etc are all maxed out, and I use an e-saver with a c. 1% interest rate to store the money on an interim basis, so it only costs me a few pounds a year to run it this way.

To me, the lost 1-2% on interest on what is relatively small amounts for relatively small periods of time is worth it so that I can see all my main spending accounts with one log in. If you prefer, you could open another interest paying current account and use this as the secondary account, and that would combat the lost interest issue.

Anoneemoose

SuperHan wrote: »

I have a separate account set up to track credit card spending. You could open a basic current or savings account with Santander, and every time you make a purchase, transfer the money from your 123 account to this secondary account.

Then when your credit card bill is due, you have the correct balance sitting and waiting to be transferred back to your main account for the DD. And when you look at your current account balance, you can immediately see what your 'spending' money is (less other direct debits).

The only problem with this is you will lose out on the 3% interest from your 123 account on these balances, but it shouldn't make much of a difference.

I don't earn interest on my current account, and TSBs etc are all maxed out, and I use an e-saver with a c. 1% interest rate to store the money on an interim basis, so it only costs me a few pounds a year to run it this way.

To me, the lost 1-2% on interest on what is relatively small amounts for relatively small periods of time is worth it so that I can see all my main spending accounts with one log in. If you prefer, you could open another interest paying current account and use this as the secondary account, and that would combat the lost interest issue.

This is exactly what we do. We have 'piggy bank' websaver accounts for budgetting purposes - we transfer our budgeted amount to our groceries and petrol websavers when we get paid. Then any time we spend any money on groceries or petrol, we transfer the same amount of money from the relevant websaver to another which is specifically for the credit card payment. This means we always have the right amount ready to pay at any given time.

TBeckett100

It's a lot of pi55ing around for £32 a month isn't it?

You should have gone for an Anex gold charge card. The discipline required is excellent and you can pay off the balance as soon as its charged to your card. And the cash back deals are excellent, £5 back for Spending £50 at Bp etc

datlex

I find it helps to do the following for my expenditure card- have a mirror account to your credit card. Every time you make a payment on your card you move the same amount into your mirror account. That way the balance will always be covered. Use that account to pay your card too don't use the account for anything other than money management, so no direct debits (unless you set one up to pay credit card) no using of debit card etc. I pay mine as soon as the statement appears, though if I think the balance is getting high I will pay it off earlier. This account earns me rewards which have helped pay for Christmas.


With my other card I pay this off weekly- I pay my rent and council tax using it. It earns me reward points too so is like earning interest on these payments. It is separate from my other card for budgeting purposes.


I would check with your card provider that if you set the payment for 27th each month it would hit your credit card account in time. I had a previous card set to be paid on a recurring monthly payment each month and it caused problems as their payment dates can vary. If they say the payment is due on 20th but you always make payment on 27th they will report you as paying late even though you are paying every month. It happened to me! Hence why I now ensure I pay as soon as possible.