Credit Cards vs Debit cards rewards/ interest

Em0510

Hello! 

We have about 20k in the bank ready to spend on our house - namely White goods, decoration, sofas etc (no building work)

Is it better to keep the money in a high interest savings account, and get a credit card with rewards - pay for the goods through the credit card - which we would pay back monthly IN FULL via the savings account?

Thanks!

Emma 

eskbanker

In principle it'll be financially advantageous to put your spend through a credit card, both for section 75 protection and for any rewards, but you'd need to ascertain if you'd be eligible for rewards cards, and if so, whether the credit limit would be enough for what you have in mind.  Taking on an additional credit facility (even if repaid in full every time) will affect your credit files for a while if that's important to you, e.g. if remortgaging or needing other important credit....

CliveOfIndia

Assuming you'd be using the savings to pay for the goods anyway then yes, it makes perfect sense to use the CC and get some rewards.  Assuming you can get accepted for one, of course.

And as long as you clear the card in full when you get the statement - otherwise the interest would dwarf the value of any rewards you may get (unless it's on a 0% promotional deal).

Nasqueron

The answers in your first post covered most of this

https://forums.moneysavingexpert.com/discussion/6485777/credit-card-options-for-house-renovation

See rewards cards article

https://www.moneysavingexpert.com/credit-cards/best-credit-card-rewards/

DullGreyGuy

Em0510 said:

Hello! 

We have about 20k in the bank ready to spend on our house - namely White goods, decoration, sofas etc (no building work)

Is it better to keep the money in a high interest savings account, and get a credit card with rewards - pay for the goods through the credit card - which we would pay back monthly IN FULL via the savings account?

On what basis do you think otherwise?

White goods, sofas etc then it's a no brainer as all companies will accept cards and so reward + 1 months interest is going to be better than nothing. 

Decorations is more complex as many decorators won't accept cards and as such you may pay more by limiting yourself to decorators that do -v- decorators that only accept bank transfers

zagfles

A credit card with an introductory interest free period would be far better than a card with rewards. Of course both would be even better but a longer interest free period is likely to be far more worthwhile than a fraction of a % reward.
eg Barclaycard are offering 20 months interest free on purchases, you could probably earn 6%+ interest in that time. Don't think any rewards card will get you anywhere near 6%

Idpullthecurtain

zagfles said:

A credit card with an introductory interest free period would be far better than a card with rewards. Of course both would be even better but a longer interest free period is likely to be far more worthwhile than a fraction of a % reward.
eg Barclaycard are offering 20 months interest free on purchases, you could probably earn 6%+ interest in that time. Don't think any rewards card will get you anywhere near 6%

But it would be unlikely to get near the £20k though?