Should I get a credit card?


(Gavin) #42

468 casualties every day is a lot, but statistically small compared to the 16.7 million who get to work by car every day, or the 254 billion vehicle miles travelled each year.

Anyway, think we’re going to have to agree to disagree here! Like I suggested earlier, I personally wouldn’t wish a credit card on anyone, reward points or no reward points.


#43

Let’s try bring this back on topic. What do people consider the best reward they have had with a credit card?


(Lewis King) #44

A first class return ticket to Mumbai for two, worth £15k, for 147,500 Avios points was my best use of rewards from a credit card :smiley:


#45

15k for a flight?! Was it on a private Jet?


(Kristian Hoyle-Johnson) #46

If you just use it to build credit score by doing your regular payments and not spending more than you have, it’s a great idea since you can build your credit score! They also often have better payment protection on purchases


(Lewis King) #47

No, it was first class with BA. Obviously I wouldn’t have spent that much, but that’s how much they were selling them for.


#48

That’s insane, really - it’s terrifying that companies are allowed to charge this sort of money. However I guess that if someone is willing to pay it, why not! :man_shrugging:


(Splodf) #49

Talk me through the luxury levels?


(Lewis King) #50

I don’t know what you mean/want from that but you can see what BA first is like here:

https://www.britishairways.com/en-gb/information/travel-classes/first/first


(Micky) #51

I don’t see how you can recommend overdrafts whilst saying credit cards are bad. I’ve known of people that’s have spent years struggling to get out of their overdrafts.


#52

I’m assuming that was £147,500 each?

Also worth pointing out to anyone thinking it would be completely free, you still need to pay the taxes when you book reward flights.

In Europe, these taxes are negotiable (family of 4 to Lanzarote was £115).

To Mumbai, it would cost £1,100 for 2 people.

Which is still a decent saving of course!


(Lewis King) #53

Nope, used a 2-4-1 with Amex so 147,500 points total.


#54

Ah OK - But to the people who don’t have the 2-4-1 (which you don’t get with all the cards), it would have been 147,500 each.

Just setting their expectations before they come back to you in a year with a very disappointed partner they’ve left behind :joy:


(Lewis King) #55

Haha yeah, good point, thanks :smiley:


(Gavin) #56

Well, you can dig yourself a big hole with both, but who has an overdraft anywhere near as big as their credit card limit? An overdraft may well be in the hundreds, but a credit card limit will often be in the thousands.

An overdraft, being part of my current account, still feels like my money, but credit card bills are easily de-coupled from purchases.

Despite the changes plastic has made to the way we conduct transactions, few rigorous studies have been done to ascertain the impact the medium has had on our spending habits. Generally, figures show that plastic encourages consumers to spend more, especially credit cards. When McDonald’s started allowing credit card purchases in the US, the average spend rose from $4.50 to $7. This effect is contrary to standard economic theory which says that essentially people make rational financial decisions based on cost and that the medium of payment should not influence this. There are, however, several theories about why we spend more on plastic from the relatively new field of behavioural finance and economic psychology.
https://www.independent.co.uk/money/loans-credit/plastic-people-how-credit-cards-changed-our-relationship-with-money-8751075.html


#57

For someone who is advocating about getting out of debt, that’s one hell of a statement.

An overdraft absolutely isn’t your money - Whether it feels like it or not.

I imagine the reason why so many students (and adults) get into debt is because of this “feeling”.

It’s in my current account so it’s mine right?

Nope - It’s borrowed money.

It’s no different to a credit card or pay day loan - The only difference are the fees.


(Gavin) #58

What I mean is, if I have X amount in my account, but I know that spending X amount is going to put me into or further into my overdraft I’m less likely to do it unless absolutely necessary. I don’t get the same feeling with the credit card.


#59

I get what your saying and agree fully. Credit cards make spending money you don’t have so painless, until you get in too deep, then the pain begins


#60

That’s fair enough, and if it works for you - Great.

Sadly, a lot of people use overdrafts how you used your credit card, and end up in trouble.

Financial education is key here, and if everyone was financially savvy, we’d all use credit cards and be happy :wink:


(Gavin) #61

These days I would prefer to stay away from either and just use the money I have. The main selling point of Monzo for me was that I know instantly how much I have spent at any given moment. I don’t get transaction detail on the credit card until 3-5 days after. It’s fine in emergencies, but not for day-to-day spending.