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Should I get a credit card

edited 30 November -1 at 12:00AM in Credit Cards
26 replies 1.1K views
Sophie123456Sophie123456 Forumite
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edited 30 November -1 at 12:00AM in Credit Cards
Hi there,

I am pretty clueless when it comes to credit cards etc so I thought id come on here to get some advice possibly.

I have been trying to budget better recently as our circumstances changed last year. I have recently got a car and that has been money constantly too. Along with rent, bills etc I don't really get left with much at the end of the month, only about 100/200 pounds.

Would anyone advise me getting a credit card or overdraft or something? What are the pros and cons etc?

Any help would be appreciated! :wave:
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Replies

  • yksiyksi Forumite
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    Help us out with the reason you think you might need it. Do you have plans for a personal loan, new car finance, a house? Have you looked at any of your credit reports to see what they say about you in general?
  • abc.xyzabc.xyz Forumite
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    Don't get a CC unless you can pay it off each month. Get a loan if you want to borrow long-term.
    Definitely do not get an OD. Being in one does not look good on your credit history, and fees are going up to 40% soon (unless you can get a healthy limit with 0%, which are usually just offered to students).
  • Jami74Jami74 Forumite
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    Would anyone advise me getting a credit card or overdraft or something? What are the pros and cons etc?

    Don't get one, that's what I advise :)

    The pros are: If you manage it really well (pay it off in full, never go over the limit and never withdraw cash) then it makes you more favourable to lenders in the future.
    The cons are: If you aren't managing your money really well then you will quickly get into debt that will be much harder to get out of than avoiding it in the first place.
    Mature student 2011-2016[
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  • yksiyksi Forumite
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    It's simple to say "don't get one" but if you are aiming to improve your credit history and/or have limited history, a credit card can be a very useful tool. Without a credit card, it can be near-on impossible to get a personal loan in the first place due to a lack of demonstrable credit history.

    We need to know what the OP is thinking, and I've lost my crystal ball.
  • foxy-stoatfoxy-stoat Forumite
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    Along with rent, bills etc I don't really get left with much at the end of the month, only about 100/200 pounds.

    Just save your £100-£200 at the end of the money and build up some savings. The last thing you need is a credit card bill to pay for once you have racked up a thousand or 2 of debt.
  • Gerry1Gerry1 Forumite
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    A credit card can be very useful when the unexpected happens, e.g. if your car breaks down on a motorway and needs to be towed and repaired, or you miss the last train and are stranded, etc etc. You'd also find it quite difficult to hire a car without a credit card, e.g. if your own car is off the road or for holiday use.

    The Section 75 protection can also be very handy if things go wrong, and building up a record of responsible usage will be useful in the future. Just make sure your credit limit isn't excessive, that you record all purchases and that you set up a direct debit to pay off the full amount every month.

    OTOH it can be a fast track to bad debt if you don't control your spending and don't clear the full balance every month.

    At the end of the day only you can decide when it would be a useful safeguard or the slippery slope to ruin: only you know how responsible you are.
  • DCFC79DCFC79 Forumite
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    Hi there,

    I am pretty clueless when it comes to credit cards etc so I thought id come on here to get some advice possibly.

    I have been trying to budget better recently as our circumstances changed last year. I have recently got a car and that has been money constantly too. Along with rent, bills etc I don't really get left with much at the end of the month, only about 100/200 pounds.

    Would anyone advise me getting a credit card or overdraft or something? What are the pros and cons etc?

    Any help would be appreciated! :wave:


    If you only have £100/£200 pounds left at end of the month I dont think a credit card is for you.


    Could you clear the amount each month ?


    All depends on what you would put on it, if just some fuel and only fuel then maybe yes get 1 (just don't spend more than £200).


    Maybe you should spend a few months putting the £100/£200 to 1 side/in an account and move into the main account the amount you spent on the credit card and have a standing order setup.
  • MalkytheheedMalkytheheed Forumite
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    abc.xyz wrote: »
    Get a loan if you want to borrow long-term.
    Em. I disagree. a 0% CC is always a better option.
  • Terry_TowellingTerry_Towelling Forumite
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    There is no right or wrong answer to this one - just people's opinions and preferences.

    When you say you are left with £100/£200 after expenses, could you enlighten us as to what those expenses include? For example, if they include food shopping, petrol and general living expenses, then a credit card is (in my opinion) your best friend.

    All you do is use the credit card for all of those expenses that you would normally pay with cash/debit card (petrol, food etc) and then make sure you set up the card to pay in full by direct debit each month.

    What this does is ensures you don't spend any more than you normally would, and defers the point at which your current account actually pays for things until at least one pay day later, thereby leaving the cash in your current account (earning interest, hopefully).

    Obviously, don't go mad spending all that cash buffer but you can, of course, still save the £100/£200 that you would normally have left over after all expenses paid.

    Ideally, a credit card should not be viewed as a way of buying things you cannot afford, it should be viewed as a way of deferring payment for all your normal monthly cash expenses by as much as 56 days (card dependent) and clearing them in full after each statement.

    I've been doing this since the mid eighties and it's worked fine for me, but you do need to be careful and, I accept, credit cards are not for everyone - especially those who just cannot control their spending habits.
  • abc.xyzabc.xyz Forumite
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    Em. I disagree. a 0% CC is always a better option.

    0% CC is great... if you can pay it off in time. OP has £100-£200 disposable income. They can't afford to be paying extortionate CC interest on large balances. Hence why I suggested a loan instead.
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