What is the point of credit cards if you don't overspend?

ZZaffy

I have a 123 Santander credit and debit card.
Is there a good reason for having the credit card when I only spend money that I already have?
Will I loose my cashback?  Or will I still get cashback interest on just using a debit card. 
For maintaining the account, I pay £3 per month on the credit card and £4 per month on the debit card.
Funny how one sets up things years ago and continue on when there is no advantage.  Laziness, I suppose.  Just such a faff to re-organise.
All views gratefully received.  Thanks.

Nat190

Hi Zzafy,

I don't know the details of the Santander credit card fully.

But I use credit cards this way, use I for all my food shopping, fuel, big purchases etc. I then pay the credit card once the money appears in the balance (usually about 2 days).
For me I do this

1. To build up my credit score, I use credit which looks good and pay it off fully which also looks good.

2. I use it for the rewards, so up until recently the Clubcard credit card worked for me, get clubcard points every time I use it, and by using it for all fuel and shopping it can mount up quite quickly!

Hope that helps!

Brie

I use a card for everyday spending to get the cash back.  And don't pay anything for having the card itself. 

I have a Santander 123 card that can be used outside the UK without any fees for foreign currency.  It's also nice to have a way to isolate holiday spending. 

I have a couple of other cards which are only used for balance transfers. 

Finally I have one card that has been used once in 5 years as they cut the available credit on it by 90%.  I was considering closing it but discovered that it gives priority access to booking concerts.  

MorningcoffeeIV

ZZaffy said:

Is there a good reason for having the credit card when I only spend money that I already have?
.

Section 75.
Budgeting 
Cashback.
Building a credit history.
Security.

Only overspend if you want to make the future you poorer.

born_again

Nat190 said:

Hi Zzafy,

I don't know the details of the Santander credit card fully.

But I use credit cards this way, use I for all my food shopping, fuel, big purchases etc. I then pay the credit card once the money appears in the balance (usually about 2 days).
For me I do this

1. To build up my credit score, I use credit which looks good and pay it off fully which also looks good.

2. I use it for the rewards, so up until recently the Clubcard credit card worked for me, get clubcard points every time I use it, and by using it for all fuel and shopping it can mount up quite quickly!

Hope that helps!

Why?
You are missing out on the interest free period.
Put the same amount as you spend in a savings acc & then payback before the due date.

Credit score is nothing but a marketing tool for the CRA's. It means nothing to lenders, as they never see it.

sourcrates

Credit cards give you extra protection on some purchases, under section 75 of the consumer credit act.

If used correctly, as in, paid off in full every month, they can help build credit history, that`s history, not score, the score is only seen by you and the CRA`s, actual credit scoring is a system used by lenders when considering an application for credit, and its exact nature is a closely guarded commercial secret.

They can be useful for things such as car hire, holiday travel etc etc, don`t really buy into the rewards they offer you, most of the time what you have to buy to qualify for said rewards can be bought cheaper elsewhere, they are a marketing gimmick, much like credit scores.

There is another downside as well, some people have numerous credit card accounts, which can lead to problems with bad debts, they are one of the easiest ways to get into money trouble if abused.

badmemory

To me credit cards are only safe to use in a way that credit card companies really hope you will not as they want you to need to pay them interest.  I've had one nearly 50 years & have never paid interest, although back then you did need to pay an annual fee.  I now spend almost everything on a cashback credit card & keep an amount that will cover it in a savings account.  If you don't do similar then read sourcrates last paragraph.

maisie_cat

I have had the same credit card since 1995 and never paid interest, I use it for everyday spending and repay monthly with the added benefit of S75 cover for eligible transactions.

grumbler

ZZaffy said:

I have a 123 Santander credit and debit card.
Is there a good reason for having the credit card when I only spend money that I already have?
Will I loose my cashback?  
Or will I still get cashback interest on just using a debit card. 
For maintaining the account, I pay £3 per month on the credit card and £4 per month on the debit card.

What cachback? I don't know any for the debit card. Credit one pays 0.5% on spending, but costs £3 p.m. You have to spend £600 p.m. to make this CC  worthwhile. Most CCs are free and some pay 0.25% cashback.
With regard to the point of using CCs see MSE guide -  https://www.moneysavingexpert.com/credit-cards/how-do-credit-cards-work/

ZZaffy

Thank you for all comments but for my life style I am still wondering why I bother with a 123 credit card.
I do not go abroad.  I do not need to build a good credit score. I only spend what I have.
If I cancel the credit card, I wonder if it affects my debit card in anyway such as cash back.
Am I paying £3 a month for my credit card for no advantage to me.  £36 per year is not to be sniffed at.
I have asked Santander, and it just gets too complex even for them.
The only thing that could be an advantage is protective cover 75 on purchases, which so far I have never needed to use.

MikeJXE

I have Santander 123 and the credit card that I have never activated as I don’t spend enough to pay the fee. If you want to cancel it you will have to phone them and they will ask why.