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Other Credit Cards(?!)

Discussion in 'General' started by Bogomip, 16 Mar 2012.

  1. RevDarny

    RevDarny Member

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    This part isn't strictly true as some credit card companies allow you to transfer credit to your bank account. But they usually charge a higher interest rate or this is seen as a cash withdraw on the credit card. It's not in your best interest to do this.

    In the case of credit card transfers. Once you've moved your balance to the new card, (You usually to this to benefit from a lower interest rate) Do not use that new card to buy anything until you have paid off the balance on that card. If you start spending on that card the interest is calculated on the full balance of the card and not on what you just spent on the card recently.

    In short, what ever you buy on a credit card make sure you can pay it off at the end of the month. This way your charged nothing.
     
  2. Jaffa5

    Jaffa5 New Member

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    Wuyanxu, IMHO credit cards have 2 advantages over debit cards. Firstly, you have access to spending power that can be used as a flexible short-term loan. Secondly, items purchased on a credit card are usually insured against certain problems like non-delivery.
     
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  3. dynamis_dk

    dynamis_dk Grr... Grumpy!!

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    Although understanding your wish to get to grips with all the details. For you situation I would say 3 things

    1) Buy items on the credit card that you only have the money to pay back fully.
    2) Buy things you would buy anyway like petrol, weekly shopping etc
    3) Always pay the monthly bill on time. Ideally, fully but if not ALWAYS THE MINIMUM ON TIME

    Do the above and the card will work to help ease up your credit rating with very little risk to your finanaces. Great to have the money in genuine emergency situations / times of need - but try not to use it to buy items you otherwise wouldn't (i.e. latest GFX card just cause you have the credit card - I did that while I was younger and replaying is no fun).

    Also, if purely to boost your credit rating, its worth getting something like a littlewood cataloge account etc. They are credit accounts so help your credit rating, most items can be had for 20 weeks intrest free (more on different items depending on value). Same applies, maybe buy the odd pair of trainers or coat etc and pay the repayments via direct debit. Another little credit rating boost :)
     
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  4. Atomic

    Atomic Gerwaff

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    You'd be mad to withdraw money on a credit card if you have that money if your current account. There are additional charges for withdrawing cash on a credit card unlike a debit card.

    Getting out Cash = Debit card
    Purchases = Credit card (assuming you can pay it off)

    Aside from building up a good credit rating, the credit card offers additional protection on purchases as the issuer takes the risk if the items never show up - you won't be charged and have to get the money back unlike a debit card where you're out of pocket until the bank reimburses you.
     
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  5. Jaffa5

    Jaffa5 New Member

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    Good advice from Dynamis.

    Always try to spend within your means!
     
  6. Bogomip

    Bogomip ... Yo Momma

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    It helps being able to contextualise my own situation, even that site I went on and didn't quite know where to click (and after looking around for a bit it didnt really help anyway).

    Here however we have maybe helped more than just me (which we have :)).

    My credit rating isn't bad and I wont want a mortgage for a few years so I will try for something like a tesco card I think, that way I get additional clubcard points :)
     
  7. suenstar

    suenstar Collector of Things

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    This is incorrect, it only applies to certain credit cards. Most cards supplied by a bank will allow you to transfer credit into a current account.

    I constantly transfer the odd bit of money from my credit card into my current/savings account if I'm going to get a bill that my account doesn't have enough to cover.

    Edit:
    Didn't notice that RevDarny already mentioned it.
     
  8. LJF

    LJF Modded

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    It's definitely worth applying for a Tesco Credit Card or similar with a rewards scheme. However there is a chance that your application will be unsuccessful, particularly if you've never had a credit card before, as they base their decision on your credit history too!!

    If you are unsuccessful then the next place you should try is your bank. Provided that they can see that you're not overdrawn and you have a regular income then they'll pretty much certainly give you a card.

    After a few months of problem free usage on your banks credit card you'll likely find that any other bank will be happy to offer you credit.

    This is all based on my experience. MBNA wouldn't give me a Play.com Visa Card at first so I went to my building society, Nationwide who instantly accepted my application and gave me a gold card! As there was no reward or cashback I still wanted the MBNA card and six months later my application was successful.
     
  9. Bogomip

    Bogomip ... Yo Momma

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    I applied already and was accepted with a rather large credit amount :S But yeah it was a bit risky, as being declined from one provider can hurt your chances with others I think.

    All done now though, I just have to wait :)
     
  10. talladega

    talladega I'm Squidward

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    Sometimes if I have a large amount owing on my card (always gets paid off in full by due date) I will get charged a couple bucks for what seems to be life insurance on my CC. Which means if i die then my CC is paid off. I suppose I could opt out of that but I think its good to have.
     
  11. TraumaticHug

    TraumaticHug New Member

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    Hey, I realise this thread finished about 12 hours ago, but I spend a part of most days recommending credit cards to those who need them so wanted to add one or two points.

    1.
    Credit Cards have a purchase rate, a cash advance rate and a balance transfer rate, applying to each relevant use of the card. These are calculated separately and should appear as such on your bill.

    2.
    Balance transfers are intended for those who are paying a higher rate on another credit card(s), to better manage their debt by moving it to a lower rate. If you don't have another credit card elsewhere then this won't affect you.

    3.
    Don't draw cash from a credit card. Drawing cash from a credit card is one of the the most expensive ways to borrow (aside from maybe the mafia). You not only pay a cash advance fee up front, but the interest rate on the cash borrowed tends to be around 30%, even if your purchase rate is only around 18%. Also, this is the last part of the bill your repayments pay off.

    So, say you spend £100 on Amazon, then take £100 cash out at an ATM bringing your bill to £200 (+ the small cash advance fee). Using the previous rates, you pay 18% on the Amazon purchase and 30% on the cash advance.
    If you then pay £100 back into your credit card, you clear off the lower rate first and are still paying 30% interest on the remaining £100.


    4.
    As tends to be mentioned to students or those just graduating, credit cards are a fantastic way to build up your credit rating quickly, provided that you never miss a payment or go over your limit. Most banks tend to let you away with having a rare late payment, but don't push it. Set up a direct debit for the minimum payment so you never miss it.
    EDIT: however, don't pay just the minimum payment. Paying just the minimum payment on a debt of £1000, with an APR of 18%, will take 18 years and 3 months, costing an additional £1200 in interest.

    5.
    When buying online, only use a credit card. Even through PayPal it is recommended that you use a credit card. I deal with a lot of fraud on customers' accounts. Those who used debit cards online are lucky if they get their money back, while those who used credit cards almost always get it back.

    5 1/2.
    Then you have purchase protection, the best example being when holiday companies in the UK started going bust a few years ago. Customers who paid cash or by debit card were very lucky if they were covered for money lost or if they received help if already abroad. Customers who used credit cards were refunded or brought back home without issue.
    Purchase protection is also good for when you receive incorrect goods. Not getting anywhere with the seller? Call your credit card department.

    6.
    You start paying interest on the day your credit card bill is issued, and it is accrued daily. Paying a bill as soon as you get it will still incur some interest. Most credit cards now accept Faster Payments*, so paying towards a credit card as soon as you use it through online or telephone banking is no hassle.

    7.
    From seeing how a lot of people use their accounts, never, never think of your credit card limit as your money, but as a safety net. Being able to afford something and having access to the money to buy it are two different things. If you have the money in your current account, use your credit card and pay it off straight away.
    Unless it is an emergency, such as your washing machine breaking or, God forbid, computer part breaking.


    blah



    *Faster Payments - the system used to transfer between different banks, for free, within 2 hours (or, in rare cases, next day). This can be up to £99,999,99, but most banks limit this to much, much lower. Note that transferring from a bank's current account to that same bank's credit card is still considered transferring between 2 different banks. No idea why.



    TL;DR - I like honey. I put it on everything.
     
    Last edited: 17 Mar 2012
  12. Mister_Tad

    Mister_Tad Super Moderator Super Moderator

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    :eyebrow:

    This is either wrong, or unclear in its wording - I have a credit card and a charge card. With both cards, payment is due within a certain period of the bill being issued (~30 days for the credit card, ~10 days with the charge card). I've got direct debits to pay in full at some point within this period, and have never paid any interest on the bill.

    I've never had a credit card that has been any different to this, from my very first student card without any perks and a paltry credit limit to the whiz-bang charge card I have today.
     
  13. thehippoz

    thehippoz New Member

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    checked the fico and over 800- actually 805 here

    to get it to come up.. just get cc's with the biggest balance possible- without yearly fees of any of that crap.. now buy everything with those cards- the bigger the balance the better.. always nag them up increase your balance

    but you have to pay it all off every month.. that along with utilities on autopay will get you there.. try to pay off all your cars/school loans too throwing extra money at it.. minimum payments will kill you over time
     
  14. Matticus

    Matticus ...

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    Just a random question about credit rating to throw into the mix.

    Does it decrease over time if "untouched"? So say I build up my credit rating now to an excellent level then don't use a credit card etc for 5 years, does my rating go down?

    It seems a simple question, but I can't seem to find an answer or any real mention of times impact on credit other than old cards will eventually "fall off" your file (being stated as a reason not to cancel them to improve rating), but whether this affects the overall score I don't know.
     
  15. Krazeh

    Krazeh Well-Known Member

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    You don't have a 'credit rating' as such. Each lender will make a determination based on the information contained in your credit file which details the credit-related actions you've taken over the last 6 years. Some lenders may rate you lower if you don't have a recent credit history while others may not be as bothered.
     
  16. MrDomRocks

    MrDomRocks Well-Known Member

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    Another thing to note, when buying anything whether it be goods in store or online you are very much covered if the goods are faulty and the retailers isn't being forth coming in giving you the money back.

    Example - It has been reported that a woman claimed back the money from a breast ogmentation. As the implants where found to be faulty and had to be removed and the company she had them done by no longer existed. In this case there was no one to get the money back from.

    But in the case of Credit Card you are very capable of regaining the monitary value of faulty goods etc.

    Some cards offer long term no interest periods these are probably the harder ones to get when you have little or no credit rating.

    Also every time you apply and get rejected due to poor credit rating it hits your rating even more. I have no crdit card because of no credit rating. The short term no interest cards are easier to get as is the high interest cards.

    It is always best to pay the outstanding balance or that months required payment on time. Else large interest payments get put on top.
     

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