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  • FIRST POST
    • Sophie123456
    • By Sophie123456 14th Jan 20, 10:47 PM
    • 9Posts
    • 0Thanks
    Sophie123456
    Should I get a credit card
    • #1
    • 14th Jan 20, 10:47 PM
    Should I get a credit card 14th Jan 20 at 10:47 PM
    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!
Page 1
    • yksi
    • By yksi 14th Jan 20, 11:00 PM
    • 183 Posts
    • 326 Thanks
    yksi
    • #2
    • 14th Jan 20, 11:00 PM
    • #2
    • 14th Jan 20, 11:00 PM
    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?
    3 a Day January 61/93
    2020 in 2020 61/2020
    • abc.xyz
    • By abc.xyz 15th Jan 20, 12:42 AM
    • 29 Posts
    • 15 Thanks
    abc.xyz
    • #3
    • 15th Jan 20, 12:42 AM
    • #3
    • 15th Jan 20, 12:42 AM
    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).
    • Jami74
    • By Jami74 15th Jan 20, 8:26 AM
    • 391 Posts
    • 393 Thanks
    Jami74
    • #4
    • 15th Jan 20, 8:26 AM
    • #4
    • 15th Jan 20, 8:26 AM

    Would anyone advise me getting a credit card or overdraft or something? What are the pros and cons etc?
    Originally posted by Sophie123456
    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
    Professional
    Debt Free: 01/01/2020
    Save 9.6k in 2020 - #30 305.50/9,600
    • yksi
    • By yksi 15th Jan 20, 9:14 AM
    • 183 Posts
    • 326 Thanks
    yksi
    • #5
    • 15th Jan 20, 9:14 AM
    • #5
    • 15th Jan 20, 9:14 AM
    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.
    3 a Day January 61/93
    2020 in 2020 61/2020
    • foxy-stoat
    • By foxy-stoat 15th Jan 20, 9:41 AM
    • 5,696 Posts
    • 3,533 Thanks
    foxy-stoat
    • #6
    • 15th Jan 20, 9:41 AM
    • #6
    • 15th Jan 20, 9:41 AM
    Along with rent, bills etc I don't really get left with much at the end of the month, only about 100/200 pounds.
    Originally posted by Sophie123456
    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.
    • Gerry1
    • By Gerry1 15th Jan 20, 10:24 AM
    • 1,229 Posts
    • 787 Thanks
    Gerry1
    • #7
    • 15th Jan 20, 10:24 AM
    • #7
    • 15th Jan 20, 10:24 AM
    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.
    • DCFC79
    • By DCFC79 15th Jan 20, 11:11 AM
    • 35,622 Posts
    • 22,488 Thanks
    DCFC79
    • #8
    • 15th Jan 20, 11:11 AM
    • #8
    • 15th Jan 20, 11:11 AM
    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!
    Originally posted by Sophie123456

    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.
    • Malkytheheed
    • By Malkytheheed 15th Jan 20, 11:40 AM
    • 43 Posts
    • 41 Thanks
    Malkytheheed
    • #9
    • 15th Jan 20, 11:40 AM
    • #9
    • 15th Jan 20, 11:40 AM
    Get a loan if you want to borrow long-term.
    Originally posted by abc.xyz
    Em. I disagree. a 0% CC is always a better option.
    • Terry Towelling
    • By Terry Towelling 15th Jan 20, 4:01 PM
    • 2,222 Posts
    • 1,893 Thanks
    Terry Towelling
    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.xyz
    • By abc.xyz 15th Jan 20, 8:08 PM
    • 29 Posts
    • 15 Thanks
    abc.xyz
    Em. I disagree. a 0% CC is always a better option.
    Originally posted by Malkytheheed
    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.
    • Ben8282
    • By Ben8282 15th Jan 20, 9:11 PM
    • 4,764 Posts
    • 2,629 Thanks
    Ben8282
    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.
    Originally posted by abc.xyz
    A loan will not assist with budgeting which appears to be the purpose of obtaining the credit card. The OP has not expressed a need to borrow money for any purpose.
    It is also unclear if this 100-200 refers to money left over or is the money that the OP has available for shopping and day to day expenses after payment of bills.
    My reading of the OP is that this is money left over, to save or spend on whatever takes their fancy.
    Certainly if the OP wants to use the credit card for budgeting, it would be a good idea to get one, use it for spending currently made by debit card or cash, keep the money in their bank account maintaining a healthy balance, reducing the risk of accidental overdraft and hopefully earning them a little interest. There are also the added benefits of s75 protection and also a credit card would be useful should the Op wish to rent a car or something similar or check into a hotel where a hold may be placed on funds etc.
    A loan would be totally unsuitable for this purpose.
    An overdraft facility is a good thing to have so long as it is NEVER used.
    Last edited by Ben8282; 15-01-2020 at 9:15 PM.
    • kuratowski
    • By kuratowski 15th Jan 20, 10:04 PM
    • 185 Posts
    • 230 Thanks
    kuratowski
    I wouldn't be comfortable advising the OP to get a credit card, given what they said (esp "clueless when it comes to credit cards" and "trying to budget better"). I might be barking up the wrong tree, but it *feels like* they are looking to solve their budgeting issues by making more money available through debt.

    As Terry Towelling and Ben8282 already said, a sound way to use credit cards is paying in full by direct debit, using the 56 days interest free period as a cash flow buffer. However the risk is this leads very easily to overspending and before you know it you have spent some of next month's pay before you've even earned it.

    My best advice to OP is to read up on budgeting matters - there is an MSE guide, and there are some helpful threads in the budgeting and bank accounts board (I remember some very good posts by enthusiasticsaver), and there is guidance elsewhere on the web too. It would help to track your spending for ~3 months (I know it sounds boring but it's really valuable to know accurately) and then post your SOA on the DFW board.

    The last thing I would do is to take out any debt.
    • abc.xyz
    • By abc.xyz 16th Jan 20, 1:45 AM
    • 29 Posts
    • 15 Thanks
    abc.xyz
    A loan will not assist with budgeting which appears to be the purpose of obtaining the credit card. The OP has not expressed a need to borrow money for any purpose.
    It is also unclear if this 100-200 refers to money left over or is the money that the OP has available for shopping and day to day expenses after payment of bills.
    My reading of the OP is that this is money left over, to save or spend on whatever takes their fancy.
    Certainly if the OP wants to use the credit card for budgeting, it would be a good idea to get one, use it for spending currently made by debit card or cash, keep the money in their bank account maintaining a healthy balance, reducing the risk of accidental overdraft and hopefully earning them a little interest. There are also the added benefits of s75 protection and also a credit card would be useful should the Op wish to rent a car or something similar or check into a hotel where a hold may be placed on funds etc.
    A loan would be totally unsuitable for this purpose.
    An overdraft facility is a good thing to have so long as it is NEVER used.
    Originally posted by Ben8282
    Of course. I said a CC is fine if the OP can pay it off each month. I would never suggest a loan for everyday spending. But I would never suggest a CC for long-term spending either, in case that's what the OP is thinking about. There is too much temptation to pay the minimum amount each month. Then before you know it, the 0% offer ends and the interest starts kicking in. At least with a loan there is a set amount that you have to put aside each month to pay off.
    • bris
    • By bris 16th Jan 20, 10:23 AM
    • 8,973 Posts
    • 7,888 Thanks
    bris
    Credit cards are excellent.............for spiralling into a constant debt cycle that can takes years if ever to get out of.

    Your circumstances fit that bill, you will end up with your CC limit at it's max and struggling to meet the minimum payment every month, just like the hundreds of millions of us all over the world.

    If you can soldier on do it without one, the CC interest will just be another burden.

    P.s everyone can pay it of every month, until they can't then the sh*****t hits the fan.
    • A Lert
    • By A Lert 16th Jan 20, 12:43 PM
    • 26 Posts
    • 15 Thanks
    A Lert
    Do you think you can be disciplined financially? Can you limit yourself to borrowing for what you need and refrain from borrowing to get things you want? If so, I'd say a credit card is probably a good idea. It's a cheaper way to borrow than overdrafts or the dreaded payday loans and it can help build a credit record. But reserve it for emergency/crisis use.
    • 2e0arr
    • By 2e0arr 16th Jan 20, 1:54 PM
    • 637 Posts
    • 336 Thanks
    2e0arr
    Sophie123456 are you reading the thread you started please ??
    • Smodlet
    • By Smodlet 16th Jan 20, 2:48 PM
    • 5,148 Posts
    • 8,616 Thanks
    Smodlet
    I wouldn't be comfortable advising the OP to get a credit card, given what they said (esp "clueless when it comes to credit cards" and "trying to budget better"). I might be barking up the wrong tree, but it *feels like* they are looking to solve their budgeting issues by making more money available through debt.

    As Terry Towelling and Ben8282 already said, a sound way to use credit cards is paying in full by direct debit, using the 56 days interest free period as a cash flow buffer. However the risk is this leads very easily to overspending and before you know it you have spent some of next month's pay before you've even earned it.

    My best advice to OP is to read up on budgeting matters - there is an MSE guide, and there are some helpful threads in the budgeting and bank accounts board (I remember some very good posts by enthusiasticsaver), and there is guidance elsewhere on the web too. It would help to track your spending for ~3 months (I know it sounds boring but it's really valuable to know accurately) and then post your SOA on the DFW board.

    The last thing I would do is to take out any debt.
    Originally posted by kuratowski
    Can't say it any better than that. CC's are for emergencies only, imho. It is nice to know they are there (at 0% in the main) but they are absolutely not to be used for anything other than short term loans for online purchases or those pesky emergencies and only then, if you have no other alternative or don't want to empty your savings account.

    Sophie123456 are you reading the thread you started please ??
    Originally posted by 2e0arr
    Yeah! Please tell me this is not another one of those surveys-for-free posts. If so, I'm out.
    What is this life if, sweet wordsmith, we have no time to take the pith?
    Every stew starts with the first onion.
    I took it upon myself to investigate a trifle; it had custard, jelly, soggy sponge things...
    • 18cc
    • By 18cc 16th Jan 20, 2:52 PM
    • 2,075 Posts
    • 1,528 Thanks
    18cc
    No, you shouldn't get a credit card. Thank you for listening.
    • Terry Towelling
    • By Terry Towelling 16th Jan 20, 4:17 PM
    • 2,222 Posts
    • 1,893 Thanks
    Terry Towelling
    Just read through Sophie123456's other threads and only once has she bothered to make more than one post in one of her threads. There is also a common theme running through them and, dare I say it (for fear of sanction by the forum police), could she be a different sort of 'benign' troll. I think we should always ask her for more detail before we venture to give her any reply in future.

    If you're reading, Sophie, let us know what you think of that approach.

    PS, stop jumping red lights, be more careful at pedestrian crossings and don't worry about small squeaks from your car.
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