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Best first credit card for 2nd year student
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Nasqueron said:inthezeroroom said:Just don’t. It’s a myth that you need a credit card in order to get further finance in the future (which you also don’t need). Use money you have to pay for stuff, and yes that includes cars. Don’t have money? Then you can’t afford it. Seriously, if someone had told me this as a second-year student then the last 30 years would have been so much better.Section 75 protection: yeah, OK, but people hardly ever use it, let's be honest.Cashback: what are we talking, 1%? £10 per £1,000 spent...Taking finance for a car is normal, yes. But it's not reasonable; it's stupid. People generally don't have £30k+ for a new car (and if they do, they achieved it by not buying new cars), but they can scrape together the deposit (often on a credit card) and then make the monthly PCP payments for three years, after which they own nothing. HP is better (an unsecured loan better still) as at least you own the darn thing at the end, but you're still financing a depreciating asset. There's no reason to buy a clapped-out car either; just one you can actually afford, and then save up for the next one. But it's become 'not the way to buy a car' these days – because we're grown-ups and we're worth it.So then, to avoid living in a tent, arguably the only form of credit anyone actually needs is a mortgage, and you don't need a credit card to get one of those either.Sorry, I'm being pithy but you've not convinced me.On a more serious note, I think we need to be really careful when advising young people to take out lines of credit that they don't need for the sole purpose of building a credit history. I admit to my own lack of discipline over the years, but I'm not alone. Most credit card users carry a balance and plenty get into real difficulty, with multiple cards, endless balance transfers and so on (witness the stories on this very forum). So, given that the perks are rubbish, and Section 75 protection only covers single purchases over £100, then if you are disciplined enough to pay a credit card off every month then why not simply make the purchases outright in the first place?1
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enthusiasticsaver said:I recommend you do not get a credit card in Uni unless you can be very disciplined about using it. Building up a credit score is not something you need to think about now.
Building up a credit history is no bad thing - being on the property ladder 2-3 years earlier might save money, better car deals etcSam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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inthezeroroom said:Nasqueron said:inthezeroroom said:Just don’t. It’s a myth that you need a credit card in order to get further finance in the future (which you also don’t need). Use money you have to pay for stuff, and yes that includes cars. Don’t have money? Then you can’t afford it. Seriously, if someone had told me this as a second-year student then the last 30 years would have been so much better.Section 75 protection: yeah, OK, but people hardly ever use it, let's be honest.Cashback: what are we talking, 1%? £10 per £1,000 spent...Taking finance for a car is normal, yes. But it's not reasonable; it's stupid. People generally don't have £30k+ for a new car (and if they do, they achieved it by not buying new cars), but they can scrape together the deposit (often on a credit card) and then make the monthly PCP payments for three years, after which they own nothing. HP is better (an unsecured loan better still) as at least you own the darn thing at the end, but you're still financing a depreciating asset. There's no reason to buy a clapped-out car either; just one you can actually afford, and then save up for the next one. But it's become 'not the way to buy a car' these days – because we're grown-ups and we're worth it.So then, to avoid living in a tent, arguably the only form of credit anyone actually needs is a mortgage, and you don't need a credit card to get one of those either.Sorry, I'm being pithy but you've not convinced me.On a more serious note, I think we need to be really careful when advising young people to take out lines of credit that they don't need for the sole purpose of building a credit history. I admit to my own lack of discipline over the years, but I'm not alone. Most credit card users carry a balance and plenty get into real difficulty, with multiple cards, endless balance transfers and so on (witness the stories on this very forum). So, given that the perks are rubbish, and Section 75 protection only covers single purchases over £100, then if you are disciplined enough to pay a credit card off every month then why not simply make the purchases outright in the first place?
I also wouldn't place any value in the idea that "most people" do anything based on a forum where people come for advice when they need help, as, the reality is, anyone who makes money from cards or uses S75 successfully etc wouldn't necessarily ever feel the need to register and post.Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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WillPS said:OP should be free to make their own choices - it's so easy these days to stumble upon credit I don't see a potential problem with making an informed choice to take a credit facility to achieve a greater life goal (like having a better credit record and having better access to credit products when needed). Credit cards are a powerful tool and I'm not sure I subscribe to the notion you should only get one if you really need it - OP themselves can judge if they think it'd be useful or a risk and that should be sufficient.OP should be free to make their own choices – absolutely.However, I disagree that having a better credit record and better access to credit products is a greater life goal. The only purpose of a credit history is to enable further debt. And so if we take debt off the table entirely (making exception for a mortgage) then we won't have a credit history and won't need one. Not for a new car because we've got a paid-for car on the drive. Not for emergencies because we've got money in the bank for those, right?I also disagree that credit cards are a powerful tool. Do you mean spending power? As in the power to spend money you don't have? I'm struggling to think of cases where that is helpful. Cash in a savings account is way more powerful.1
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Cash in a savings account, losing money from inflation isn't as powerful as your credit card company paying for a new kitchen because you used a credit card
Why not just be clear - you are advising against a powerful and beneficial payment tool because you personally don't like credit and don't think anyone else should use it? It's not good MSE adviceSam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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Nasqueron said:
Why not just be clear - you are advising against a powerful and beneficial payment tool because you personally don't like credit and don't think anyone else should use it? It's not good MSE adviceI was about to post pretty much exactly the same comment.Ultimately a credit card can be extremely convenient and beneficial for those who are disciplined enough to use it sensibly, it can be a nightmare for those who abuse it.It's almost like alcohol. There are millions of people who enjoy a social drink with friends, enjoy a glass of wine with their evening meal, and never have an issue. But there are also a large number of people who cannot limit themselves to a sensible level of drinking and end up ruining their career, their family, ultimately their own life. Should we be advocating that nobody should ever drink any alcohol at all, ever, simply because some people abuse it? Of course not.The same is true of credit. Used sensibly, there's nothing at all wrong with it. Used recklessly, it can undoubtedly cause huge problems.
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Nasqueron said:Cash in a savings account, losing money from inflation isn't as powerful as your credit card company paying for a new kitchen because you used a credit card
Why not just be clear - you are advising against a powerful and beneficial payment tool because you personally don't like credit and don't think anyone else should use it? It's not good MSE adviceSection 75 aside (and that is a good example of it working BTW), the only power is power to spend money you don't have, and the 'benefits' such as cashback and points are rubbish.I haven't exactly been unclear. However, it's not that I think other people shouldn't use credit but that they don't need to. Advising someone (especially someone with low/no income) to take out credit is not good advice, full stop.0 -
Nasqueron said:I also wouldn't place any value in the idea that "most people" do anything based on a forum where people come for advice when they need help, as, the reality is, anyone who makes money from cards or uses S75 successfully etc wouldn't necessarily ever feel the need to register and post.Life in the slow lane0
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Nasqueron said:enthusiasticsaver said:I recommend you do not get a credit card in Uni unless you can be very disciplined about using it. Building up a credit score is not something you need to think about now.
Building up a credit history is no bad thing - being on the property ladder 2-3 years earlier might save money, better car deals etcI’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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CliveOfIndia said:Nasqueron said:
Why not just be clear - you are advising against a powerful and beneficial payment tool because you personally don't like credit and don't think anyone else should use it? It's not good MSE adviceI was about to post pretty much exactly the same comment.Ultimately a credit card can be extremely convenient and beneficial for those who are disciplined enough to use it sensibly, it can be a nightmare for those who abuse it.It's almost like alcohol. There are millions of people who enjoy a social drink with friends, enjoy a glass of wine with their evening meal, and never have an issue. But there are also a large number of people who cannot limit themselves to a sensible level of drinking and end up ruining their career, their family, ultimately their own life. Should we be advocating that nobody should ever drink any alcohol at all, ever, simply because some people abuse it? Of course not.The same is true of credit. Used sensibly, there's nothing at all wrong with it. Used recklessly, it can undoubtedly cause huge problems.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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