Do I need a credit card?

MiniLaura

Hi

Just in process of BT my balance over to egg - money in place to pay it off within 6 months.

Will leave me with original card - £500 limit and new egg card, once cleared £750 limit.

My plan at the moment is never to use egg card - only got it to do a BT. So thinking of chopping it up. Leaves me with original card - do I keep it for emergencys? lower the balance to say £100 which I could clear off in month/two months if really needed.

Would rather get rid of it and build up an emergency savings fund.

Just wondering if it makes sense to keep using credit card - good credit history? cashbacks worth it?

Just thought - wanting my food budget to be £100 - if i got cashback card and only used it exclusively for food? as I have budget there to pay it off each month?

Any advice on best ones? Or should i get rid while I can?

CLAPTON

depends whether you are young or old
a spendthrift or miser
a council tenant or mansion owner
employed or on JSA
etc

it dependent upon your circumstances, your objectives and your personality... you haven't told us anything about youself.


many balanced, sensible people find credit cards very convenient, pay off the full balance each without fail, make use of the cashback (eggmoney 1%), use it to help build up their credit rating (useful for mortgages, general credit (mobiles, utilities)

MiniLaura

im 24

run up debts in past with credit card then got loan to clear them plus my overdraft as student.

now at point where i want to be debt free so not sure of best step forward - i think i could trust myself to use it purely for cashback purposes.

Job wise - not much about minimum wages so im on a limited budget but could afford to pay for food via credit card as its budgeted.

i rent privately but would like to buy in future but nowhere near this at moment.

CLAPTON

The important thing here is whether you are disciplined enough not to use it for borrowing.

In spite of what you read the reality is that over 50% of people pay their credit cards in full each month

Once the BT period is over, I would say keep the eggmoney card for the cashback and set up a DD for the full amount (you can do this online) so you never pay any interest. This will earn you a modest sum and also look good on your credit file.. a well managed bit of credit.
Important to establish a saving fund so you can always pay for things you want either to buy them directly or pay the CC in full each month.
Personally I would also keep the other card too but it depends upon your useage... some people do a lot of driving so like to use the card for petrol and like two cards in case one is rejected (happens for no apparent reason sometimes).