If you could teach "Credit Card Beginners" - what would you teach?

tacpot12

I'd explain about the order in which payments to the card account are credited.

badmemory

Don't spend what you don't have. Just enjoy the (56?) days interest from another account whilst not paying the (56?) days interest that you haven't had to pay cos you did it via cc.

Nebulous2

Credit cards work best for those who are financially secure enough to not need them.

For those with precarious finances they can become a costly trap once a balance has built up.

jamesperrett

Keep a permanently low rate card as a backup should all your fancy credit card deals go wrong. With a backup card at, say, 6.9%, at least you won't end up paying the horrendous standard rates found with most cards.

TheShape

I'd teach how to ready the summary box:

The problem with trying to teach specifics is that CCs tend to have slightly different ways of operating.

For example:

Order of payments can differ slightly between cards, usually in relation to the order that promotional balances at the same rates are paid.

Not all CCs have an interest free period.

Different cards treat ad hoc payments differently.

ricky_v

Depends on the person, if they're the type that feels the need to spend every single spare penny they have then I would simply teach them not to have a credit card as they'll spend every single penny they don't have too. If they're more careful then state the importance of paying off the statement balance off in full every month and treat the money spent on the card as your own and advise them to use a cashback credit card. More "advanced beginners" will be introduced to the wonderful world of 0% credit card stoozing and credit cards for foreign use.

Ebe_Scrooge

Hmm, as someone who's made huge mistakes in the past ....

Lesson 1 - don't look on CCs as money you don't have. It's all too easy to run up debts on CC, get a "consolidation loan" to pay it off, then run it up to the max again. End result, you owe twice the amount.

Lesson 2 - using a CC sensibly can give great rewards. Even if it's only a few meagre Tesco Clubcard points, if it's stuff you have to buy anyway - like food, petrol, etc. - why not get a couple of quid's worth of some sort of points to save up for a Christmas treat.

Lesson 3 - PLEASE understand how interest is calculated. Pay it off in full every month, or forget about having one.

Lesson 4 - Contrary to the above ........ If you want to borrow money very short-term, it can be great. Personal example : we were thinking about a new TV for a long time. No real urgency, but thinking about. Umm-ing and ahh-ing. Local shop suddenly closing down, brilliant bargain on offer. Can't really shell out that much in one go, can easily afford it over 2 months. Stick it on the card, paid over 2 months, about a fiver in interest. Result. CAVEAT !! Planned, short-term borrowing is OK. Saying "I really fancy that latest TV that costs £2000, but no way can I afford it ... what the hell, stick it on the card" is a recipe for disaster. PLANNED, and SHORT-TERM borrowing is fine.

Lesson 5 - Think of the protection. If you buy a holiday from Monarch, or a bathroom from Delboy Trotter & Bros, and they go out of business - the card company will reimburse you ( between £100 and £30,000 ) . The number of times I've told my wife "Always use the CC when buying online"... "Yeah, but Amazon or Easyjet are not going to go out of business, are they " ..... I despair.

Lesson 6 - It gives you a good history. When, later on in life, you want a mortgage or a car loan - a history of responsible borrowing and repayment will give you access to better deals.

Lesson 7 - It AIN'T free money !!!! It AIN'T free money !!!! Credit, used wisely, is an incredibly useful tool. Abused, it's the road to ruin. Just like alcohol - used in moderation, at social gatherings etc., it gets the party going. Abused to excess, it ruins lives. Just like gambling - an odd flutter on your favourite football team, or a punt on the Grand National, it's fine. Spending your wage packet every Friday night down at the bookies - it's the road to ruin. Hey, do you detect the voice of experience here ?

Lesson 8 - For Christ's sake, understand how it works ! Yes, it's very useful. Used wisely, it can save you a fair bit of money. BOTTOM LINE - only borrow what you can comfortably afford to repay immediately. That way, you get the best of both worlds - interest free credit and statutory protection rights.

Hoogle

I was brought up old fashioned Credit cards are bad if you cant afford it you dont get it mentality. Going through my young adult life with noting on credit is just more damaging than actually using cards responsibly. Good credit file equals better offers and cheaper deals. I am 35 and only have just started using them. However it is important that you use them within your means to clear the balance off each month If you live off them and only pay minimum payments then it is bad debt building up.

Samsung_Note2

Never give your credit cards (plural) to prostitutes and ask them to withdraw cash from cash point as your stuck at work,and then wonder why you in multiple thousands of pounds of debt.

Sadly the above is actually 100% true.

This wasn't a youngster either but a married man in his 60"s...so all ages need educating.