# Credit cards...



## shiv (Feb 16, 2012)

Right. I have always been adamant that I have never wanted a credit card or loan or anything like that, but I'm beginning to realise that in a few years time I will be thinking about a mortgage or whatever, and that building up my credit rating now would probably be a benefit.

So I was thinking about getting a credit card, and only paying for things I can pay off straight away - ie I am about to book flights to America (I have the money saved up), so surely paying for it on a credit card and then paying that off immediately/at the end of the month makes sense? I have no intention of putting little things on it, only bigger things that might also benefit from the security of paying on a credit card - like flights and hotels! (but also only things I have saved for & can pay back immediately/that month).

Please stop me if I'm talking pure rubbish and am not making any sense 

Now: I have absolutely NO IDEA what I'm looking for - ie which one to go for. I want one I can either transfer money to online (so presumably with my bank, Lloyds TSB) or I can set up a direct debit to pay every month in full. Can I avoid paying monthly fees/accruing interest? How do I do this? Am I allowed to make direct transfers into a credit card to pay off the outstanding balance and not have a direct debit set up on it?

I don't trust anyone working in a bank/building society to give me a full & honest answer - never have trusted banks! - so any thoughts, help, etc would be greatly appreciated.

S


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## ukjohn (Feb 16, 2012)

Cant give you advice on which cards are the best, only thing I can say is that , I went to the USA and was there for about 10 years, when I came back to the UK, I could'nt get a bank account and not even a credit card because having been out of the country for so long, I had no credit rating. I suppose my mistake was cancelling everything before leaving for the USA where I wasn't expecting to return, but things change.

John.


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## rhall92380 (Feb 17, 2012)

Hi Shiv

I suggest you go to moneysavingexpert.com for more info and best cards. So long as you pay the balance in full every month credit cards are very useful. http://www.moneysavingexpert.com/cards/

Richard


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## trophywench (Feb 17, 2012)

FWIW Shiv, we have a Tesco Bank CC.

The reason we have this one, is twofold 

- a) it gives some protection when paying for 'stuff' because having bought it 'on credit' if owt goes wrong with the item or the purchase, the Card Co are jointly liable under the Consumer Credit Act - so if you can't get a sensible answer out of who you bought it from, the card company has to cough up.  It saves expensive Court action and gets you your refund far less painfully (We've just had ?800 back on something we paid ?995 for last November)  and 
- b) we get Tesco points on everything we spend on it eg every time we shop - at Tesco's or eg Sainsbury's! - which we then convert the points into 'Rewards' and get mega-discounts on Eurotunnel, bearing in mind we use it about 3x per annum.

We also never buy things we haven't got the money for, so the Direct Debit  is set to pay off the entire balance at the end of each month, whether it's ?5 or ?5,000.

We haven't as yet, paid them a penny piece in interest.

There are also cards where a very snall amount of what you spend, is given to a certain Charity.  If you are NEVER going to pay interest you might want to look at one of them.

BEWARE - they will ALL want to flog you add-ons  such as 
'Payment Protection/Credit Card Sentinel' and if you aren't careful, they sneak it on you, and you pay SHEDLOADS for those if you are not 200% vigilant.


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## David H (Feb 17, 2012)

*Credit Cards nearly destroyed me!*

I got a credit card from my bank, no problem with repayments they were automatically taken from my current account.

Then MBNA offered me a credit card with instant ?5000 rating, two cards weren't a problem as I had a very well paid job (?700+ take home a week).

Decided I wanted to go to the States and Canada and I got a personal loan from the bank ?10,000.

Well off for a month, of course (i admit it now) I was a show off paid everything with my cards, meals out, friends purchases (fool that I was).

Came home went back to work (should explain that I saved my annual holidays and took them in one lot) everything was fine, owed a lot, but managed.

Then disaster hit, the company I had been working for had lost it's major contract and staff had to be laid off, I was one of those (company recently went into receivership).

I was left with ?17,500 on 2 credit cards and a ?10,000 personal loan, with colossal interest rates the amount was getting huge.

Wanted to remortage my house to refinance, no hope since I wasn't working, It looked like I had to sell my home to pay back the money owed.

Thankfully my youngest brother got me a remortage which he quaranteed, though it wasn't necessary.

I cut up the cards, vowing never again.

Now I have an International Debit/ATM/Cheque card which is excepted anywhere in the world.

The beauty is you can only spend what you have, so you can't get into a negative equity situation.

Once you have an active bank account you have a credit rating.

If you have ?100 in cash and a bill of ?100 to be paid, put it into the bank and pay from your account, once the bank see cash moving through your account they are happy.

Just my personal opinions.


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## Northerner (Feb 17, 2012)

I've had a credit card since 1981 and have always found it very useful. As long as you keep an eye on things and pay off in full each month then there are no extra costs, and as TW says, you have added protection for anything over ?100. This came in very useful for me when a company I had paid a ?1900 deposit to went bust - I got the full amount back from the CC company (eventually, after a bit of a battle!).

The CC companies make money from the vendors on every transaction so they are still making money even if you don't pay interest. One thing you do need to be careful of though is that you never miss a payment, as this will adversely affect your credit rating.


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## Mark T (Feb 17, 2012)

My primary credit card I use only or things I need and pay it off each month in full - food, petrol, etc.

My wife did have problems getting a personal loan a few years back because she didn't have a credit card.  Fortunately when we got our joint account she found one that had "guaranteed acceptance".  

I've had my card since I was 18 and left Uni and have always cleared it in full.  Currently I have an airmile/avios card - which the miles I built up over the last 5 years has paid for our holiday flights this year


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## vince13 (Feb 17, 2012)

We have a joint Tesco card which we use most of the time for  general housekeeping/petrol etc for the points.  I have a First Direct Visa which doesn't get much use as I try to pay for things as and when I get them if I can.  OH also has a First Direct card.  All of these are paid off in full every month without fail as we make sure we can always cover them.  We are both pensioners and therefore on a fixed income (OK the State Pension goes up each year but not by much, and the other pension is from a county council and has been frozen for the past 2 years in line with their policy to current employees I understand).   So if we can't afford it we don't get it.  

The credit card companies don't like people like us, I think, because they don't make money by charging us interest on unpaid amounts but I wouldn't like to be without my credit card.  We do have credit card protection, for which we pay an annual fee, which paid off when OH's wallet was stolen and his cards were used up in London at a currency exchange - ?4,000-odd taken out within the 2 hours it took for us to realise what had happened and report it to our Bank.  The Bank covered the loss in full because we had the card protection in place.


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## Mark T (Feb 17, 2012)

vince13 said:


> ...The credit card companies don't like people like us, I think, because they don't make money by charging us interest on unpaid amounts but I wouldn't like to be without my credit card...


Yes, and for people like me they keep putting up the credit year each year to tempt you to get silly and put yourself in trouble. (well until I phoned them up and told them to stop raising the limit)


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## Freddie99 (Feb 17, 2012)

Mine did save my bacon in December when I ran out of savings and such due to a massive cock up on behalf of NHS student bursaries. Paid for Christmas, rent and a living on it. I'm currently paying that back at a gentle rate of fifty quid a month. 
They are a necessary thing but only as a back up when all else fails. 
Might I suggest Money Supermarket.


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## Medusa (Feb 17, 2012)

i had a credit card and always paid off every penny every month so never paid any interest, i used it as i had to claim travelling expenses back from work so when i received those at the end of the month they paid off what i had spent on them... ideal ... but you do have to be strict, dont forget other things go to make up your credit rating too, like a mobile phone contract, or even car insurance if you pay monthly ( i keep getting annoyed with car ins people doing credit checks on my when i pay the insurance in full every year anyway !)


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## shiv (Feb 17, 2012)

Thanks all.

As I said, I don't want to borrow money and pay it back monthly (ala Tom), I just want to use it to pay for big things I have already saved up for and then pay off immediately, hopefully building my credit rating and getting the protection of paying using a CC.

I only envisage using it to pay for bigger things like holidays, hotels, etc.

Am going to have a look at Money Supermarket but really appreciate hearing your experiences


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## Monica (Feb 17, 2012)

Sorry, I'm a bit late now - OH has a cc by Nationwide. He pays it off monthly by direct debit and gets money back for it (don't ask why and how much, it's a very tiny %).
I've never had a cc, but they still let me have a joint mortgage with OH.


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## Robster65 (Feb 17, 2012)

I had exactly this conversation with my daughter last night for the very same reasons.

I sent her to look at moneysupermarket.com so I hope you can find a good deal.

I'm using mine at the mo to improve my rating. I think it can decline if you have no mortgage, loans or credit on the go. 

Rob


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## cherrypie (Feb 17, 2012)

It does help your credit rating as explained by my brother in law, retired Bank Manager.  If there is no activity within your financial history then you are considered a higher risk.  Best thing is to buy something on it occasionally and pay it off before you get charged interest.  Some people buy everything using a credit card and pay it off before charged interest.  If you take out a supermarket one to do your food shop you get double points and can still pay it off before the charges are incurred.


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## Robster65 (Feb 17, 2012)

There are also 'ethical' cards that donate a % to certain causes I think.

I wonder if DUK have one ? 

Rob


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## Copepod (Feb 17, 2012)

Like others, I'd suggest looking at comparison websites to find a suitable card. It actually improves your credit rating if you have a credit card and pay off full amount each month, which you can easily do by standing order or direct debit if you have electronic banking. 

In addition, many charities can be helped, with both a start payment and a % of all spent on card, paid by credit card company, not card user. Nationwide Building Society has a particularly wide range of charities, as I discovered when helping my Mum find a new credit card, when one charity / company partnership ended and she wanted to find a new one. It's also a way of raising awareness of unusual charities with people who handle credit cards in shops - shop assistants often smile when they see either of my 2 charity cards.


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## shiv (Feb 17, 2012)

Robster65 said:


> There are also 'ethical' cards that donate a % to certain causes I think.
> 
> I wonder if DUK have one ?
> 
> Rob



Yes I've been reading about these. I haven't looked into it enough to decide if it's something I'd want to do...and I wouldn't want a DUK one personally


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## Dizzydi (Feb 17, 2012)

Sorry I'm a late poster here. Look at cards with cash rewards or vouchers for spend.. I put everything on credit card and pay them in full every month. 

I have one which gives me cashback and one vouchers (john lewis) - like the others have suggested look on moneysupermarket for best cards


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## Robster65 (Feb 17, 2012)

shiv said:


> Yes I've been reading about these. I haven't looked into it enough to decide if it's something I'd want to do...and I wouldn't want a DUK one personally


 
 No, me neither ! 

Rob


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## Northerner (Feb 17, 2012)

shiv said:


> Yes I've been reading about these. I haven't looked into it enough to decide if it's something I'd want to do...and I wouldn't want a DUK one personally



My credit card is an MBNA Blue Cross one


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## KateR (Feb 17, 2012)

Ours is a joint Tescos one too which we buy all our groceries with and other bits and bobs, also other larger items which we have already saved up for. We pay it off in full every month and have just enjoyed spending our ?21.50 worth of points and having a cheap shop.


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## grainger (Feb 17, 2012)

If you are planning on paying off the full balance each month then you want to get a card that either offers cashback or reward points of some description - basically anything that earns you money.
We use, play.com, tescos, marksandspencers and in the past have used sainsburys and lloydstsb (who used to offer airmiles, not sure if they do now).
Also, maybe worth looking into cards with 0% interest for the next year also, just incase you ever have a month where you can't make the full payment.
Check out Martin Lewis free emails and website - they give great advice on what's hot in the market at the moment offering the best deals etc!


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