I think it all depends on your income levels to be honest , if you have sufficient income to service your credit card “debt” its probably a good way of accruing benefits, if you don’t have the income to service the potential available debt I think they are a terrible idea - all to often people get the impression that because they don’t have to cover the cost of the purchase immediately its free money and will carry on spending way beyond their budgets / means
Sorry, that’s a valid point and I should have clarified…
I never use a credit card as a way to spread payments (or borrow more than I have) - If I can’t afford it, I can’t afford it. Or if it is a large purchase and they offer interest free… It would be rude not to take them up on that offer.
So yeah, you need to be disciplined when it comes to spending - But I find that if you treat it as a debit card, it will be OK.
So if you are spending money anyway… why not spend it on a credit card, and then pay it off straight away?
I don’t think it’s income level that matters, more self discipline. All I’m suggesting is moving your normal spend onto a credit card - no debt needed.
yes I agree , if you have self discipline and a regular unfaltering , guaranteed income they are a useful tool
One thing I really like about using emma to track my spending is that I can treat credit card purchases as occurring in the month they happen rather than the following month when they get paid for. That way I can see if my spending meets my income in real time.
How much do you spend on your card a year? If you really can make £10k from spending what £40k? on your card then well good on ya, that is a mad return. In practice I find I could get up to 500 back but the hassle of switching cards and managing reward points becomes too onerous. I can easily save that in fx by using Monzo for travelling and monitoring my spending.
I’ll leave Dave to answer that specific question - But for me, I don’t use my amex any differently than I would use my Monzo card.
I keep on top of what I spend, I budget, I know what comes in and what goes out.
So… getting something back for spending what I’d spend anyway… Why wouldn’t you?
Note - I also use Monzo or Starling for foreign spend.
I put pretty much all my spending through either the Amex Costco card (1-3% cashback) or the Amex BA Premium card.
On the latter, once you hit £10k spend, you get a voucher, valid for two years, that effectively doubles the value of your airmiles. On £10k of spend you get between 15k and 30k airmiles depending on where you spend it. Add in various promotions (see headforpoints.com for options) that add airmiles and travel on BA generating miles, and I generally hit enough for a business class ticket to Asia. The voucher turns this into 2 tickets.
Pure hassle. Life admin. Multiple cards. Hidden charges. Ideally I would have one card end of story. Good first world problem.
I’m sceptical as to what credit card companies are doing to give free cash back. They are probably hoping people don’t pay balances and pay high interest with the offer of rewards making people sign up. I am similar to you in paying balance back in full and budget so not an issue for me. Effectively the worse off are subsidising this.
It’s personal preference of course.
Even with the financial aggregators like EMMA, I still find myself manually checking everything anyway - I guess I don’t trust those system to work it out perfectly yet.
That 5 mins of admin per month, is all it takes to reap the rewards (I saved £1500 alone on flight tickets last month).
Taking nothing away from what Monzo is doing, which I think is bloody marvellous, and will help a huge amount of people with their finances.
If ease of use is your number one priority, it’s hard to look last Monzo for everything.
The interchange fees were paying for it. No need for any agenda.
Actually they are subsidising in the way of sky high charges to catch out the undisciplined. It’s just like the free current account model…Someone has to pay and if they do how?
So what level of charges do you think is fair, bearing in mind business running costs, profit margin, provision for bad debt, providing a credit line on demand, admin, 24 hour staffing, product R&D, legal costs, due diligence etc?
How long or short is this piece of string I am holding up? You can see it can’t you?
Joking aside, yes there should be charges but not those that are specifically designed to punish the many just for the lucky few to benefit.
I like the idea, mentioned by a few in this thread and also brought up in the Q&A yesterday, of having 3rd party credit card transactions show up inside the Monzo app via open banking connections.
To be most useful it would require credit cards that could supply real-time spending data. I understand Amex have this in their app. Do any other credit cards have it in their apps?
Capital One show it as pending within a couple of hours (haven’t looked before that so might be sooner) but payments can take 48 hours to show, never less than 24hours
I am completely the same. Spend literally everything on our BA premium Amex cards, get 2 241s a year, fly to India first class usually. Once achieved the spend, churn a few gold cards for the extra points. Great return for the spend!
Capital one now instantly credit your card if you pay by faster payments, you get it instantly as available balance. Just thought I’d mention incase anyone didn’t know !
How do you do that? For direct debit they only ask for card number and additional payments the app only has pay by card option, no bank transfer mentioned anywhere
Put the reference as your long 16 digit card number
Simplified credit card payments