To be a credit card holder or not to credit card holder

[Ali7865]

Hi

So i am wondering if i should get a credit card, i am good with money and live within my means. I understand it will help with credit score but i feel it is another responsibility as well. I am looking to get on the property ladder soon so it may help. Would you recommend the good old credit card?

 

[john1989]

I have a credit card but rarely use it.


As you say, it is a good way to better your credit worthiness.


Another benefit is for large purchases. If you purchase through a credit card for purchases between approx £100 and £30,000 you are protected.

 

[Forthehealthofitjourney]

I would say they can be beneficial and helpful if used correctly.
I used to do credit card debt collection for a major high street bank so I can speak from experience that if they are used in the wrong way you can accumulate debt very quickly and land yourself in very unfortunate situations.

If you are attempting to boost your credit rating they can be a useful tool - but what will boost your score is ensuring you manage debt in a timely manner. So ensuring that any balance you accumulate you clear to nil every month, and ensure you pay on time.

Credit Reference agencies make up your credit score (E.g Experian) based on payments paid on time, outstanding debts across all of your products, how much exposure you have; for example if you have three or four (or more) credit cards that you may not necessarily use but each have a credit limit of say £5,000 that is potentially £20,000 worth of credit you have access to. If you were applying for a mortgage its exposure such as this that would prevent a bank from lending to you.

I would look at the type of purchases you want to make because there are some really good cashback deals on some cards on the market right now.

My one piece of non negotiable advice would be, never, EVER take cash out on a credit card, this is where you will be charged the highest interest rate and only when you clear off the entire balance will you revert back to interest free/base interest rates. Banks make extortionate amounts of money this way, mainly because people are unaware of this!

I hope this helps All I would say is spend very carefully!

 

[Mr A P Davies]

I love credit cards. I've had the same one for years, with a good deal of credit available, plus I get a 0% interest rate one, and cancel it when the 0% runs out. Done that three times, hope I can keep doing it.

I put thousands through them, mostly the 0%. I've never paid any interest on the 0%, always clear it before it runs out.

My other one has some astronomical rate of interest. I tend not to leave money on that, although in all fairness, a few quid, I don't mind.

Last year, I did have a cash advance, for a considerable sum. Yeah, it cost me, but so what? It was for a vehicle, it was cheap enough, I couldn't get the money anywhere else, I had to have it. So the vehicle cost me a bit more, doesn't really matter, in the wider scheme of things, it got me out of (a lot) of trouble.

Great for spending online, just get credit without having to ask for it, long time at 0%.
Get it wrong, and they will really really bite you hard. Make sure you understand what your getting into. It's all there in black and white, no excuses, just read it. If it's too small, scan it and enlarge it on your computer.

 

[Andrew Chambers]

Forget it, life within your means. You'll still get a mortgage if you've never borrowed before so that won't be a issue.