Credit Cards

Discussion in 'Finance & Pensions' started by slim, Oct 21, 2007.

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  1. I have one credit card and my maxim has been for the last 20 years or so, If I am unable to pay the full amount owing at the end of the month, I can't afford what I am buying.
    Credit card interest is astronomically high.
  2. Credit card!
    The name says it all..

  3. Credit cards are a convenience tool. Used properly they give a lot of
    protection to the mail order and retail buyer. Also its probably better to have than a permanent agreed overdraft due to the no interest from time of purchase to statement required payment. Its also a quick way of getting a loan without the hassle
    However monthly repayments are slightly over the top for interest charges its only dodgy when you pay the minimum required payment for a long time.
    I use mine for the simple fact that I do not have to divulge my bank details in transactions.

    :nemo: :nemo:
  4. Agreed the credit card does give protection from loosing money on transactions in the UK.
    The no interest deals are also useful, they are however a useful tool used by the industry to get you to keep putting items on your card. At the end of the free period.......................
  5. With some judicious planning, credit cards are a way of making money. Say you have a £2000 bill on your credit card. By switching it to a 0% on balance transfers for a 12 month period, and saving the £2000 in a high interest bearing savings account, you make money, even with transfer fees. For instance, if the fee is 2% of the transfer balance, your paying £40 on the £2000 bill. If you save £2000-£40 = £1960 in a 6% AER account, you make about £117 overall. All the while, you've bought whatever it was you earned the bill for.

    Of course, this requires discipline and planning, but that shouldn't be a problem for the disciplined readership of RR, right?

    The same canny thing is done with the 0% to pay offers on furniture. Divide the total bill be 12, pay that 1/12th into a savings account each month and you get the balance to pay off the bill at the end, and the interest pays for a meal for you and the missus. Quids in!

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