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Advantages of using a credit card? watch

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    I've just switched over to Nationwide and got a current account but during the registration I ticked the box to get a credit card too.

    Is there any advantages of me paying with a credit card over a debit? I realise the whole point of a credit card is I can delay payment. However I'm not bothered by waiting to pay at the end of the month.

    My credit rating is 10/10 but that's more because I've not really had to do much which has the potential to lower my credit rating.
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    (Original post by dylantombides)
    I've just switched over to Nationwide and got a current account but during the registration I ticked the box to get a credit card too.

    Is there any advantages of me paying with a credit card over a debit? I realise the whole point of a credit card is I can delay payment. However I'm not bothered by waiting to pay at the end of the month.

    My credit rating is 10/10 but that's more because I've not really had to do much which has the potential to lower my credit rating.
    You can get extra protection if the item is over £100. Mine also gives me cashback. Even though it's only 0.25%, it can really add up.
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    (Original post by Tiger Rag)
    You can get extra protection if the item is over £100. Mine also gives me cashback. Even though it's only 0.25%, it can really add up.
    I don't usually buy things over £100, so for things under £100 would it be a bit pointless?

    Also I often find the lengths I go to get cash back it's not worth it. Eg when booking flights with airlines, it's dynamic pricing and it can go up in price if you take your time during the booking process. By the time I've mucked about with cash back, the price is £100 more.
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    I heard if you pay for something with credit card, and something goes wrong (seller doesn't deliver, service/product is poor, possible scam) you can dispute the transaction and get your money back. This is harder to do with bank transfer or debit card.

    Your credit score isn't perfect - good but not perfect. You can improve this by using your credit card and paying the balance off in good time. You also can't predict what will happen in the future - something might happen which could lower your rating, so by building up good habits it will help you in the future.

    Also, like Tiger Rag says, cash back is also a bonus!
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    Other than the protections mentioned above and the fact that you'll be building your credit history (hopefully in a positive way if you are making at least the minimum payment (preferably more) on time every month) then not much.

    In my opinion if you're hoping to get a mortgage in later life, and if you can trust yourself not to overspend, then it'd be better for you to buy things on the credit card and to pay it off in full each month (most cards won't even charge interest on the purchase if you do this) or even pay it off over 2-3 months because lenders (particularly mortgage lenders) are very unlikely to extend a large amount of credit to someone with little credit history, even if they have a great score, because they simply don't have any evidence to show whether that person would or would not default.

    Note that the interest rates and charges differ between purchases and cash withdrawls (at an ATM), try to avoid lifting money on the CC.
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    (Original post by cheesecakelove)
    I heard if you pay for something with credit card, and something goes wrong (seller doesn't deliver, service/product is poor, possible scam) you can dispute the transaction and get your money back.
    This is known as a "Section 75" claim.

    This is what Tiger Rag was referring to. When you buy something costing between £100 and £30,000 and pay at least part of the price on a credit card, the credit card company is liable in the same way as the company you're buying from. This is particularly valuable when the company you've bought from goes out of business.
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    (Original post by robbiecee2)
    Other than the protections mentioned above and the fact that you'll be building your credit history (hopefully in a positive way if you are making at least the minimum payment (preferably more) on time every month) then not much.
    Whatever you do, ALWAYS make at least the minimum payment!

    I missed making a payment a few years back.

    The bank contacted me asking why I hadn't paid. I told them I hadn't received a statement.

    In the interim, they cut my limit from £3000 to £500 and hiked the interest rate. They also (if I recall) levied a missed payment charge.

    They did subsequently admit that they hadn't sent the statement and restored my limit and interest rate. (I suspect they didn't have to do this, and that their terms state that it's your responsibility to make payments whether you receive a statement or not.)

    It was a salutary warning!

    I have credit cards with both Lloyds and Barclays. Both allow you to set up a direct debit for the minimum payment, which they take a few days before the payment deadline if you haven't paid at least the minimum already. I would strongly advise anyone with a credit card to do the same thing.
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    (Original post by dylantombides)
    Also I often find the lengths I go to get cash back it's not worth it. Eg when booking flights with airlines, it's dynamic pricing and it can go up in price if you take your time during the booking process. By the time I've mucked about with cash back, the price is £100 more.
    What lengths?

    No more complex than using any other credit or debit card.

    Racked me £150 a year in the last couple of years. This year will be more like half that as my spend is way down but still better than nothing.
 
 
 
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