Do i need a credit card?

beedmcfc

Hi, me or the wife have never had a credit card and know nothing about them tbh, both think on same lines of if we can't afford, we cant have!! Anyhow, we go to the U S of A this month, we saved a fair bit of spending money and the idea was to put our spending money into our nationwide account and use our visa debit cards over there (is this possible?) due to nationwide not charging for use abroad. Would it be better for us to use a credit card in usa? What are the advantages of us using a credit card over a visa debit? If we do get a credit card, would probably destroy it when we returned to good old blighty.

a&akay

Pre-load your Flex just before going and use the Debit card for cash. Use a Nationwide CC for payments as you are now protected for £100-£30,000 transactions as per the recent Law Lords ruling.

beedmcfc

daft question but protected against what?

mrtg0525

Nationwide Visa Debit cards work fine over there (my wife's American so I go over to the US on a regular basis) but I mainly use it for cash machine withdrawal at banks. For everything else I use a Nationwide CC just for the added protection in case of fraud etc.

I think if you need to rent a car you're probably better off with a credit card anyway as they often 'block out' the security deposit - obviously this reduces the available credit anyway, but that's credit and not spending money that you've saved up.

a&akay

beedmcfc wrote: »

daft question but protected against what?

A transaction you've not authorised.

beedmcfc

is it worth getting a CC that offers cashback?? Seen ads on tv offering money back on purchases

mrtg0525

It potentially is, but the problem with using most credit cards is a little thing called foreign exchange loading. Have a look at the following article on MSE:

http://www.moneysavingexpert.com/cards/cheaper-spending-overseas

As I mentioned I bank with Nationwide and I do have one of their credit cards as well, but I don't use the credit card for cash withdrawals from ATMs so the cash advance fees and interest on cash advances don't bother me too much as I use my NW debit card to get cash.

Depending on the cashback, the difference caused by the foreign exchange loading will easily negate the cashback.

Another little tip that may save you a dollar at a time - if you're getting cash from an ATM, you will have to pay a fee in the US as the banks charge for the use of their ATM if the card wasn't issued by them. Most charge $2 per transaction, but Bank of America charges $3 - so unless you're really stuck, I'd recommend using another major bank's ATMs. I tend to stay away from the 'convenience' ATMs you find in airports, shops etc so I don't know how much they charge.

exel1966

Noboby needs a credit card, but used carefully they can be to your advantage, by offering the protection mentioned above, the ability to get cashback and the security of not having to carry cash.
NEVER EVER purchase anything over £100 on a debit card as it gives no protection to you whatsoever. With a credit card you have free protection of the law in the shape of The Consumer Credit Act. If a purchase goes wrong, goods are not delivered, company goes bankrupt etc , with a credit card payment the credit card company will be jointly liable therefore your money is always safe.
Depending on what you intend to do in the US, you may find the need to have one is near essential eg car hire, hotels etc as some companies will insist on these.
An alternative to the Nationwide card is the Post Office credit card. It also does NOT levy a foreign transaction fee.

C32AMG

There is no reason not to get a credit card. Provided you spend what you can afford, and no more, then there is no problem?

Ie, if you spend £1500 a month on your debit card, there is no difference than spending £1500 a month on a credit card and paying off the full balance at the end of the month.

The benefits are:

You're protected against certain transactions.
Much better fraud protection.
You'll get cashback with the right card (Even 1% will net you £15 a month - for FREE!)
You'll get interest on the £1500 that is sitting for the month in your savings account (or current account, if you have a high-interest earning current account). At a yearly rate of 4.5% this'll be around £5 a month.

So, in summary - £20 better off, lots more protection and great for credit-building purposes.

There are absolutely no downsides unless you think "wahay, I have £6000 of 'free money' " and spend it all without paying it back every month. Just spend what you would on the debit card and you'd be quids in.

on-the-count-of-three

Not on the USA issue, but on Credit Cards.

My student son was given one by his bank, but he is very careful & decided he wouldn't use it. I advised him though to use it just one a month, say on a grocery shop, & pay it off in full each month. That way he will start to build a credit history which will help when he may come to need it, car loan, mortgage etc.

I did have to smile though when he rang me last Wednesday asking how to pay back the amount due on the Credit Card. I asked him when he had used it. The reply............on Monday!!:rotfl: