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

3 Likes
2

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).

1 Like
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!

4

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.

2 Likes
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.

4 Likes
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!

2 Likes
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.

2 Likes
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.

4 Likes
9

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

3 Likes
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.

1 Like
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:

3 Likes
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.

5 Likes
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.

2 Likes
14

It’s definitely easier said than done.

1 Like
15

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.

3 Likes
17

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

1 Like
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

1 Like
20

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

22

I’ll take a look at Emma too, I use YNAB but more as a spending tracker really. I need to try and use it for its proper purpose!

23

Hi @ccdorset,

I used YNAB for many years but reached a plateau in terms of paring down unnecessary or impulse expenditure. I now use Snoop which is especially good at highlighting short-term unusual spending patterns and ‘forgotten’ subscriptions. At the moment, Snoop has a £5 Amazon voucher incentive for you to give it a test drive (DM for referer code).

1 Like