is it worth having a credit card?

Owain_Moneysaver

They are also genuinely useful if you have to buy something and need to spread the cost over a few months.

GTR_King

Yeah thanks everyone for your post. So you will get better credit history if you have a credit card??

Anthorn

GTR_King wrote: »

Yeah thanks everyone for your post. So you will get better credit history if you have a credit card??

Relative to what you do with it: If you always pay on time, never miss a payment and never go over limit your credit history will be the best thing since unsliced bread: Hey you can have it any thickness you want. The wonders of modern science.

If you do pay late and/or miss a payment and/or go over limit it's not the end of the world. Again it's relative. Just once or twice and lenders will assume you were going through a bad patch and you've recovered. But make a habit of it and you can say bye-bye to credit at least for the next two years or at most the next six years.

datlex

Credit cards are good if you are using them as a means of payment in order to get the advantages that arise. Section 75 as mentioned earlier, a month's interest on your spends (if you move the money to spends to a savings account) and rewards (points or cash back) spring to mind.


Credit cards are bad if you are using them as an extra source of finance. 0% cards included if you don't have the means to pay them off in full at end of 0% period.

GTR_King

I have enough money just never had one at all & can pay it off in time

andyfromotley

The huge downside to CC's is that its very easy to spend money you do not have, repeatedly month after month, year after year. The payments which are miniscule at first build up and up and become unmanagable. This leaves the hapless CC user with less and less money each month so surprise suprise they spend even more on the CC. This vicous debt spiral continues until the whole house of cards become unmanagable.

This imo is a much more common experience than those who are able to manage them perfectly and gain the rewards and advantages listed abaove.

So it really comes down to what sort of person you are. If you can handle them and your finances with great discipline, no problem. If, like i WAS, you are irresponsible with money and budgeting, have poor self control and like to spend more than you earn then i wouldnt touch them with a barge pole!

Only you know what sort of person you are. On the credit history point i think the use of credit cards are vastly overrated to build ones credit history. I very rarely hear of people who manage their finances well, with no CC debt being unable to get a mortgage.

GTR_King

ok well I am always good with my money and spend what I have... if I don't have the money I don't spend it...

I have never needed a credit card or an overdraft and my credit score is good. I have never been in debit...

just wondered if a credit card will boost ur credit history

YorkshireBoy

andyfromotley wrote: »

This imo is a much more common experience than those who are able to manage them perfectly and gain the rewards and advantages listed abaove.

It's been posted before that around 60% of UK credit card holders settle in full each month. I've just done a quick google and according to the moneyadviceservice website, research (by moneysupermarket.com) from 2012 backs this up.

Since this was only a short while after the bank crisis/credit crunch/recession, I'd wager the percentage has increased since?

When you factor in those who don't pay in full but do manage their debt well (some rate tarts, stoozers, and those spreading just one 'essential' big ticket item purchase cost on a 0% card), the number of those 'struggling' with unmanageable debt may be a lot smaller than you think?

GTR_King

is that so??

bigadaj

GTR_King wrote: »

ok well I am always good with my money and spend what I have... if I don't have the money I don't spend it...

I have never needed a credit card or an overdraft and my credit score is good. I have never been in debit...

just wondered if a credit card will boost ur credit history

Do you have any evidence your credit score is good, or are you just saying that you pay your bills etc

A good credit score normally requires you to manage credit well, if you have no credit then you can't be seen to manage it well. My parents wold have a very poor score, even though they are well off, own their own house, other property, savings et. As they don't use cards.

This is no problem for them, but if you want to go for a mortgage then Get a card and spend on it regularly, paying off in full. Make sure you set up a direct debit as well, either for minimum or full amount, as a missed payment would look bad.