Do I need a credit card???

simonineaston

What's folks opinion on this very simple question? I'm in full-time work, own my own home and am solvent - I don't really have a need for a credit card, so am I missing something? Are there compelling subtle reasons tha I should apply for one?

Ebe_Scrooge

A credit card, if used sensibly, can give several benefits.


Some cards will give you rewards for spending on them - airmiles, cashback, clubcard points, M&S points, etc.


If you ever want to hire a car, most hire companies will only accept a credit card as payment.


But the biggest bonus is Section 75 protection. If you buy something for between £100 and £30,000, and the company goes bust, or fails to deliver, the credit card company themselves will reimburse you.


Using a credit card can also help to improve your credit history, useful if you ever want a loan or a mortgage in the future.


The important points to remember : Firstly, only use the card for purchases you would have made anyway - don't look upon it as "free extra cash". But most important of all - pay off the balance every month, in full, when the statement arrives. As well as reflecting positively on your credit file, it means you'll never pay any interest. The safest thing is to set up a Direct debit for the full amount. That way, there's no danger of you forgetting, or missing a payment if you're on holiday or whatever.

StevieJ

simonineaston wrote: »

What's folks opinion on this very simple question? I'm in full-time work, own my own home and am solvent - I don't really have a need for a credit card, so am I missing something? Are there compelling subtle reasons tha I should apply for one?

Plenty, but No. 1 is section 75 (consumer credit act 1974).

Paying for goods or services by credit card is now a major part of daily life, with many people preferring this method of payment to using cash or cheques. An advantage of using a credit card is that, under section 75 of the Consumer Credit Act 1974, customers who have a claim against a supplier for breach of contract or misrepresentation will generally have an equal claim against the card issuer.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/31/creditcards-31.htm

molerat

Don't have to carry cash.
Large purchases are covered by s75 protection.
Interest free purchase periods allowing you to save the money in high interest accounts.
Balance transfer cards - as above.
Car hire - often need a credit card.

simonineaston

Cool - thanks, folks... Sounds like a Yes, then!

molerat

simonineaston wrote: »

Cool - thanks, folks... Sounds like a Yes, then!

Play the game right and they pay you. I currently have £12.5K of their money earning me interest at no cost to me, some here have seriously silly amounts stoozed.

Marchitiello

With your situation I would only look at Rewards/Airmiles/Cashback cards as I also do not believe you will get Interest free period on purchase as first card for "stoozing" purposes.

Who do you Bank with? Some banks have rewards card that comulate with bank accounts (e.g. RBS/NatWest Rewards CC is free for RBS/NatWest Rewards Current Account holders and would accumulate cash overall). Amex are also worth to look at. If you fly often for business and Leisure with a particular airline, it may be worth to look at the cards offered in Partnership with them. Same if you use often a particular Hotel Chain.

fifeken

Fees free foreign currency cash and purchases with the right card.

bris

Credit cards are the devil, for every 1 that can use them properly there is a thousand that are up to there eyes in debt with them. They also ruin lives as they are just to easy.

bigadaj

bris wrote: »

Credit cards are the devil, for every 1 that can use them properly there is a thousand that are up to there eyes in debt with them. They also ruin lives as they are just to easy.

Silly statement, you are obviously one of the hard of understanding individuals that can't associate spending money with paying it back.

Credit cards are very beneficial if used sensibly as described above.

PeacefulWaters

bris wrote: »

Credit cards are the devil, for every 1 that can use them properly there is a thousand that are up to there eyes in debt with them.

Yet half of credit card users never pay a penny in interest.

1000/1? Rubbish.