Using credit when you're debt free

engineer_amy

I became very disciplined with myself through my last 2 years of debt busting. I had a large credit card balance that I had been transferring around the different offers for a number of years, and any new purchases were just added on top. Only ever making the required minimum payments and never making much of a dent.


Then (LBM!!) I decided to get it cleared. From that point on, if I bought anything new on the credit card or catalogue account, it got cleared first and in full at the end of the month, in addition to paying a higher amount off the historic balance. This way I was never increasing my debt.


Since becoming debt free towards the end of 2016, I continue to do this. My cards are not viewed as "extra money" like they used to be, they are just an alternative way of spending. All purchases are accounted for in my budget and paid for from my monthly income. I actually get anxious waiting for my statement to get generated so I can make a payment.


Although now, the only times my cards are used are for online purchases for security. In actual shops I will always use my debit card (unless for something large that I might need s75 protection for) and keep a mental tally of my spends.


I might consider a loan in future for a new car, but I would love to be able to pay for one directly from savings without having to use credit, so my next goal is to maximise my savings now that I don't have to spend my surplus income on debt servicing.


Anybody that has been in debt should remember how easy it was to build up the debt, but how difficult it was to clear it. So new credit is not out of the question, just as long as you are realistic about how disciplined you can be.

copperclock

engineer_amy wrote: »

...My cards are not viewed as "extra money" like they used to be, they are just an alternative way of spending.

Some really interesting replies here.

I feel like the above really hits the nail on the head. When I was in debt I really cared about what the limits were on my credit cards because I viewed it as extra available money. Now, it's of little interest to me how much the credit limit is because I am guided by what I can afford. We use a credit card, but we put the real money aside (using YNAB) and pay it in full each month.

It was so easy to get into debt and I know that I am going to have to be constantly alert to it probably for the rest of my life. That can feel a little exhausting sometimes.

I know that there are people out there who take on responsible debt that's been budgeted carefully. part of me would like to be one of those people, but another part of me says 'don't even think about it!'

Edit to say: good luck to those on their debt free journeys. I'm making it sound depressing, but it really is incredible.

sarahb7538

I am very nearly debt free, and i have opened a credit card with my bank to help to build up my credit 'score'. I have no real credit showing on my file now apart from my current account and mobile and i am hoping to obtain a mortgage in the next 18 months.

It has a low limit - i was given 5k initially, but i have lowered it to the hundreds. I use it STRICTLY for fuel only - i work in the community and claim it back each month, so it is paid off in full when the due date comes.

I feel that although i am now a lot better with money after everything i have been through. I feel that i could end up back in the same situation quite easily. I suppose a bit like a recovered gambler or alcoholic, i feel for me personally its best not to have the temptation available.

loken152

We are still working towards being debt free, i have now paid off all of our credit cards and now working on the finally loan. During the process of paying them off i have cut each of the cards up once the balance was clear. Apart from one, that i shall use for making large purchases or emergencies and clear it straight away with savings. (once i have built up the saving pots)

datlex

I use my credit cards regularly as a means not a source of payment. They are both reward cards. I have two in order to keep certain payments separate from each other. Even when I did have debt (loans) I used my cards and then used the money I earned from them towards Christmas presents.