Cashback credit cards vs debit cards

Financial Chat
1

Hi,

I currently use a mix of cards for my day to day spending, but primarily a cashback credit card. However, I can sometimes go through phases of overspending and not thinking about the consequences.

I use YNAB, though I still struggle to stick to a budget. I’m thinking using a debit card would encourage me to make better spending choices and I think the reduction in impulse purchases is likely to outweigh the cashback I would get.

I was just wondering if anyone had made a similar decision to move away from credit cards altogether?

Thanks :blush:

David

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Chase offers 1% cashback for 12 months on opening, can also set a monthly budget so it’ll tell you when you’ve reached your peak (unsure if tells you on every transaction over your budget).

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3

I opened a Chase account earlier this year, so I have it ready to go!

I’ve used it a bit, but the temptation of using a credit card and not worrying about the consequences gets me sometimes!

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I’ve experimented with this in the past and I’m certainly convinced I spend slightly more when using credit cards.

However it isn’t a massive difference and I’ve concluded this spending buys happiness equal to the amount of extra spending, so I’ll continue for now.

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5

Have you tried paying your credit card bill from a pot and updating your pot balance to match your credit card balance every few days?

That way your bank account balance is a more accurate reflection of what you actually have available.

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6

I haven’t tried that, I really like that idea.

Though I have to confess, I don’t actually have a Monzo account at the moment. :astonished: So this is another incentive to open one!

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7

The majority of my spend is on my Chase debit card.

I have Halifax Clarity connected to McDonalds app so that that account does not become dormant between use abroad, pay a tenner into a Monzo pot each month, and pay the DD from that. Never spent more than a tenner a month at McDonalds as it’s mainly a 99p coffee.

Prior to Chase, most my spend was on my Monzo debit card. I just found knowing my live balance easier than faffing with credit cards for the cashback. That said, the £72 cashback accrued with Chase since September will not be sniffed at :smile:

Credit cards, for me, are for major purchases. For that I use Barclaycard.

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8

I don’t trust myself to use a credit card, pay it all off and start again. I’ll spend too much, not pay it all off and then the debt builds.

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9

Always paid mine in full each month. Never paid interest in near four decades of holding them.

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10

I use my Amex but I only ever spend what I would have had it been a debit card. So I can always afford to pay it in full.

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11

My Amex nowadays only comes out for their offers.

I am currently 80p in credit courtesy of 5% cashback from Avanti West Coast.

Funny how that offer wasn’t around when my fare was considerably more than the £16 for that May trip to London :rofl:

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12

I want the air miles as I use them pretty much monthly so it works out for me. Anything else goes through Chase for 1% cashback.

But in terms of budgeting, if you see your credit card as spending from your bank account then you can’t spend more than you actually have.

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13

Alas many do not.

I used to do all my monthly spend on my credit cards. Who knows, I may do again once Chase cashback expired and my Amazon card turns into Pulse.

We shall see.

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14

It’s definitely easier said than done.

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I think the trouble with me is I can go through phases of being really disciplined and only spending what I’ve budgeted for, but other times I am not.

It’s those times where I don’t think about the consequences and just grab the credit card that I need to somehow control. I wonder if a starting point would be to reduce the amount of cards I have perhaps too.

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16

I think with the CC for monthly spending there’s always going to be the odd £10 purchase that you make a little more flippantly/towards the end of the month - but perhaps that’s just me?

I only tried it for one month.

Also, the UI/Analytics on Credit Card apps aren’t as good as what’s out there for Debit.

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17

That’s where an aggregator app or open banking shines.

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18

Agreed they’re not which is a shame.

I use cashback credit cards and have done for years now. I generally put the money aside as I’m going along and have a direct debit setup to pay them in full.

I probably wouldn’t do it if there wasn’t cash back

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19

True - but I like the UI of the current accounts I use so much that I don’t think even an aggregator would stack up!

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Wouldn’t Monzo work then? Like using Trends? Emma is quite a UI friendly app too.