Credit Cards : The new cash

[Dreadful Scathe]

Having read a lot on this recently, I was wondering just how much credit people have. By this i mean - how much you need to pay off all of your credit cards and/or how much you have in loans. Ill be interested to see if anyone has 0 credit.

For the sake of clarity, if you religiously pay off all credit card bills at the end of every month - just put 0 as the amount of credit you have.
(Don't include mortgages)

Also, what is the common perception of credit? Apparently in Japan its considered "cheap" to use a credit card as they see this as a sign you don't have money - credit not being "your" money. I personally subscribe to this but in general, most other people don't and theres a common perception that it's "just something you do". I only got my first credit card after my wife got an extra for me years ago from her account. (I went to the limit buying smurf memorabilia )

[Double Trouble]

I don't have a credit card...never had one, they scare me.

I do, however, have a £3,000 overdraft, that I take to the limit every single month. and every month I say to myself - Right...going to eat out less, not use the babysitter and make my own lunch every day. I never do any of those things and always spend the lot.


Could be dead tomorrow.

[Caro]

Having read a lot on this recently, I was wondering just how much credit people have. By this i mean - how much you need to pay off all of your credit cards and/or how much you have in loans. Ill be interested to see if anyone has 0 credit.

When I first came to this country, and asked the bank for a visa / mastercard (just so that I could buy flight tickets on the internet), I wanted a debit visa / mastercard, which is what you normally get in France. The bank I was in told me that it was impossible... it will have to be a credit card, cause debit card version of those didn't exist.

It's something that I have never quite understood about this country, people have loads of credit cards and actually use the credit option they provide a lot.

I always pay my bills in full every month, I just can't bring myself to pay interests. Also I've been raised in an environment where you don't spend money you don't have, and from very early on I started saving (money received at birthdays / chirstmas and then student work). I'm very grateful for that, as it's all too easy to fall for credits.... I do use my credit card now, and tend to buy expensive stuffs (typically flight tickets) from there, and pay with the next salary... (also cause I buy them way in advance, I currently have flights booked for this weekend, july, august and october...) mostly for convenience and avoid transfering money from saving accounts etc.

But it would be so easy to overuse it... especially as you can get so many cards with huge credit allowances on them....

[ducasi]

When I first came to this country, and asked the bank for a visa / mastercard (just so that I could buy flight tickets on the internet), I wanted a debit visa / mastercard, which is what you normally get in France. The bank I was in told me that it was impossible... it will have to be a credit card, cause debit card version of those didn't exist.

Maestro/Switch is the equivalent, but some banks, like the Co-op Bank, I believe, do issue Visa debit cards.

[Double Trouble]

It's something that I have never quite understood about this country, people have loads of credit cards and actually use the credit option they provide a lot.

My credit rating is not as good as credit card users.

Their way of thinking is...How do we know you will pay us back if we can't see any evidence of this elsewhere?

[Dreadful Scathe]

Maestro/Switch is the equivalent, but some banks, like the Co-op Bank, I believe, do issue Visa debit cards.

i thought all banks did - i have lloyds tsb and nationwide visa debit cards? which banks don't do this ?

[Caro]

Maestro/Switch is the equivalent, but some banks, like the Co-op Bank, I believe, do issue Visa debit cards.

yeah I know, but some internet sites only accept visa or mastercards... and I didn't want to change bank, so I went for the credit card...

EDIT: DS, the bank in question was RBS

[Dreadful Scathe]

My credit rating is not as good as credit card users.

Their way of thinking is...How do we know you will pay us back if we can't see any evidence of this elsewhere?

indeed - thats why i never had one for years - i had no credit card history - weird isnt it

[Tessalicious]

I have a Visa debit card from Halifax, and one credit card (ok, three, if you count two store cards I've used once each and paid off immediately).

I'm just not rich enough to not pay off my bills each month - I like to be able to use my credit card for internet and large purchases, and my credit limit is so low (intentionally) that if I don't pay it off I have no credit for the next month. The only other loan I have is an interest-free one from my company for my season ticket, but it's a small amount (about £200 not yet paid off).

[Keefy]

I put zero. Technically I have a few £K cc debt as I have money outstanding on a new Tesco cc... but as they decided to charge me zero interest on all transactions until December the money to pay that off sits in an interest bearing account of mine

Like most people I've had cc debt in the past but I got out of that game. I've now got five cards that I use all of the time, all of them paid off in full by DD each month. There's so many good deals such as cash back incentives, six weeks interest free credit etc. etc. that it actually makes sense to use cc's - as long as you use them properly! I could easily pay a £100 bill direct out of my main bank account, but if I use a cc to pay exactly the same amount I get interest on that £100 while it sits there for six weeks and the cc company may even give me some cash back later in the year! Why use cash/debit cards?

I'd go as far as to say that the majority of my spending is done on cc's, I only use the debit card to get cash and top up the mobile

[Icey]

I use my Tesco credit card to buy large items and then pay it off in full. By doing this I ensure that my excellent credit rating is maintained and I also get the points and free vouchers etc from Tesco.

[David Bailey]

When I first came to this country, and asked the bank for a visa / mastercard (just so that I could buy flight tickets on the internet), I wanted a debit visa / mastercard, which is what you normally get in France. The bank I was in told me that it was impossible... it will have to be a credit card, cause debit card version of those didn't exist.

The bank was talking rubbish - or, possibly, they just meant that their particular bank didn't issue such cards.

As a bit of background - VISA and Mastercard are just financial transaction networks, they don't lend anyone money. So when you borrow money on a credit card you're simply borrowing money from the bank or financial institution that issued that credit card. For a debit card, you're simply taking money from your own bank account, of course. VISA don't care where the money comes from, they just care that they get their transaction fee.

Any bank debit card with the VISA logo on is a "VISA debit card" - i.e. it will be honoured wherever you see the VISA sign. I've had one (with Barclays) for about 20 years now.

(Switch / Maestro is another network, BTW)

It's something that I have never quite understood about this country, people have loads of credit cards and actually use the credit option they provide a lot.

Up to a point, credit is a good thing - it provides financial liquidity, keeps people spending. The Japanese economy got into serious trouble a few years back, simply because its citizens weren't spending at all, they were just saving all the time - so no-one was buying anything, so the economy was stagnating.

So "credit = bad" is as much a myth as "house price rises = good", but both of these make for good headline-grabbers.

The trick, as always, is to determine how much credit is "too much"... Generally, when "credit" turns into "debt", that is a bad sign

[drathzel]

I have a car loan and money on credit cards but i dont see it as a problem as a lot of my "debt" is an investment in my business which means that in a period of time i will be able to pay it off. Once it is then i wont have to have my credit cards as i have a visa delta and a visa electron card which i can use for online purchases.

I like to use cash as much as i can as i can see what i have and what i have spent.

[JiveLad]

One way to use credit cards is to get working it the other way round - ie they give you the money.

It's a bit more difficult now - as most have now slapped on balance transfer fees, but the way it works is like this:

1. Get a credit card (say Egg or Virgin) let's say £10,000 limit
2. Do a balance transfer to your bank account - so you have £10,000 in your bank account - a savings account to earn interest - or buy some premium bonds for 12 months
3. Don't spend on the credit card
4. When the interest free 12 month period comes up then repay the £10,000 and pocket the rest.

Some people were making a lot of money from this - which is why there are now so few opportunities to do it.

Full details at moneysavingexpert.com

[Lynn]

I use my Tesco credit card to buy large items and then pay it off in full. By doing this I ensure that my excellent credit rating is maintained and I also get the points and free vouchers etc from Tesco.

I use my credit card (when I remember to!) for larger transactions as I get cashback for using it. I always pay it off each month when the bill comes in so its just a way of managing how I spend money.

[Twirly]

Like lots of other people, I pay my credit card off in full each month by Direct Debit. I put most things on it – food shopping, eating out, clothes, etc. In the past I’ve been in the situation where my overdraft has equalled, and then exceeded slightly, my monthly salary. I was very worried about it – luckily, I got a new, much better paid, job. I don’t like to think what I would have done if I hadn’t – it’s easy to “spiral into debt” as they say when you don’t earn a whole lot. Particularly living in London.

The one thing that doesn’t go on the credit card, oddly considering other people’s comments on here and the number I’m buying at the moment, is flights. And that’s because so many companies (BA, BMI and Easyjet being the main ones I use at the moment) charge extra for using them. So did the holiday cottage place I’ve hired in September – an extra 2%. I refuse to pay this, so wind up using my debit card – Easyjet still charge you an extra £1 per flight I think. I hate this because I don’t like using my Debit card online (one of the reasons I got my credit card was to shop online, particularly for flights). I’m never quite sure how much of a security risk it is, but I always think that the credit card provides greater protection. Can anyone shed any light on this?

[TurboTomato]

I had over £30k credit on my TVR

Still paying for the fact that it depreciated rather more than I paid back on credit during the 9 months I had it. If you include the penalty for settling the finance early it lost c. £10k in those 9 months. I'm afraid spending money on cars is a weak point of mine

[Twirly]

Also, I've got a charity credit card - so a certain amount (can't remember how much) goes to Water Aid when I spend money. I don't get any cash back or anything, instead it goes to a good cause.

[whitetiger1518]

No credit cards - I don't trust myself with them - I saw to many student friends go straight into debt.

1 Visa Debit card, 1 Boots card, 1 Paypal account for online, and a student loan that is getting paid back off my salary.

I won't have a true credit card unless I really have to!

Whitetiger

[Lee Bartholomew]

There are quite a few pre pay credit cards comming out at the mo. These are cards you top up at banks / P.O.s etc and can be used wherever you see credit cards accepted. No credit checks are done but there is norm a monthly charge of about £2

They are great for net shopping or ensuring a drunken night out doesn't get too expensive.