is it worth having a credit card?

Anthorn

YorkshireBoy wrote: »

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?

Er ... so why do we need a credit card if we're going to pay it off in full every month? Wouldn't it be better and save a lot of hassle if we just used our debit card and abandon credit?

GTR_King

I checked my score & it's good about 75/100 thats when i checked it.

I always pay my bills etc and never missed a payment or been in debit etc...

will a credit card help my credit score or not?

I feel I don't need one..

andyfromotley

Yes i agree YB, i was aware dimly of those figures, but most of those people arent maxing out their rewards etc. I think its probably a minority who do so?

I think the point remains that for people who struggle to manage their finances, credit cards can present a real and constant danger as a quick visit to the DFW board confirms. Perhaps because that is my own personal experience and something i am adressing i may well have overstated its occurence.

GTR_King

So you need a credit card to boost your credit score up??

I know that if you use it responsibly it will work but if you keep missing payment etc it will affect your credit score.

I have done buy it now pay 12 months later on my macbook/ipad & paid them off in full within the 12 months

lisyloo

Er ... so why do we need a credit card if we're going to pay it off in full every month?

Haven't read the entire thread, but one reason is section 75 protection. So if (say) you get a fault on your solar panels in 10 years time and the installer is out of business then you'll be covered by the credit card - this could be very valuable and worth many thousands for large ticket items like a wedding, conservatory etc.
Another is extra insurance and offers (so Amex will cover you if items are stolen/damaged).

Wouldn't it be better and save a lot of hassle if we just used our debit card and abandon credit?

You'd lose setion 75 protection.
Also some of us don't keep thousands on hand to pay for holidays.
My credit card allows me to buy holidays pay business expenses without having to keep a large cash "float" for these items. Very useful.

lisyloo

I checked my score & it's good about 75/100 thats when i checked it.

Who gave you this score?
Anyone who would lend you money?
Or a company that offered you a number in return for your cash?

It's meaningless and you're basically a mug for paying for it.

I always pay my bills etc and never missed a payment or been in debit etc...

You also need to show that you can manage debt.
Some debt is prefectly responsible e.g. a mortgage or a credit card to manage business expenses.

will a credit card help my credit score or not?

Yes because it will show you can manage debt (over time).

I feel I don't need one..

They can save thousands if a company goes bust, reduce the costs of foreign currency and help you hire a car, book hotels, flights etc, but if you do none of the above and don't need a mortgage then you might be right.
Most people do some of the above so credit cards are a good thing for the majority who do those things.

lisyloo

I think the point remains that for people who struggle to manage their finances, credit cards can present a real and constant danger

Agreed.
If people don't behave responsibly then any access to credit may be an issue for them.

The same can be said for cars, alchohol, kitchen knives etc.
That doesn't mean that they shouldn't be used by the people who do handle them responsibly.

Anthorn

lisyloo wrote: »

Agreed.
If people don't behave responsibly then any access to credit may be an issue for them.

The same can be said for cars, alchohol, kitchen knives etc.
That doesn't mean that they shouldn't be used by the people who do handle them responsibly.

Agreed in part. But how is anyone to learn to use credit responsibly if they don't have credit in the first place and possibly if they don't use it irresponsibly in the first place. Experience is the best teacher.


The main thing I learned way back in the crash of 2007/8 is not to avoid credit but to cover it with other assets and a rainy-day fund. All of us can go down and believe me if I could go down so could anyone. What is most relevant is not the possibility of going down but the ability to recover from it.

MallyGirl

GTR_King wrote: »

I checked my score & it's good about 75/100 thats when i checked it.

I always pay my bills etc and never missed a payment or been in debit etc...

will a credit card help my credit score or not?

I feel I don't need one..

When my husband and I bought our first house together (nearly 20 yrs ago) he got accepted for the mortgage straight away as he had had a number of loans which he had paid back according to the agreed terms. I, on the other hand, had little credit history as I had always paid for items in full, hadn't built up any debt and paid it off, only had a lightly used credit card. It took a while to get my approval through as I had no evidence that I paid my debts (since I hadn't any). A well managed credit card will provide evidence to future lenders that you can be trusted to pay back their money - this will improve your chances of being accepted for borrowing and will get you better interest rates.

AndyPix

GTR_King wrote: »

I have never had one (I am 25)

GTR_King wrote: »

yeah but i have never had one

GTR_King wrote: »

but I have never had one before

GTR_King wrote: »

just never had one at all

GTR_King wrote: »

I feel I don't need one..

One question : Have you ever had one ?