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Credit cards?

vanish

vanish

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Today I applied and was approved for a credit card from my bank.
Are they worth having? Thoughts?
 
LORD BURT

LORD BURT

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I maintain a credit card. I have a small balance. It has it uses as an emergency backup, or I want to spend now, save later.
 
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ramboghettouk

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i worry about getting into debt, despite my savvngs i'm a massive spendthrift, the psychiatrist said the main thing is whether your happy, i said according to mr micawber income exceeds expenditure happiness expenditure exceeds income misery, in the book they visit him in debters prison
 
fazza

fazza

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They are good for emergency and if you are going to use it try to pay off the balance in full each month to stop the intrest adding up.

I am not sensible enough to have one anymore as when I did I went crazy and went on a massive buying spree which I could not afford to pay off.
 
neorealism

neorealism

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When I used to work, I used to have a credit card with £1,500 monthly limit... on top of £2k of overdraft. I don't know whether sounds like much but in my early 20s it seemed like a lot, and was a lot more than most people my age had. At that point I was building up my credit score with hope of attaining a favourable interest rate for a mortgage in the future. I was sensible and responsible and paid off the balance in full every month.

Unfortunately my depression got the better of me and I had to take a year out of university. At that point the council informed me that I would be entitled to housing benefit and council tax benefit, but it would be backdated as a lump sum once I returned to university and resumed my studies. I had it in writing, in black and white. So as you can understand I had to survive somehow for 12 months, working only part-time earning a wage that didn't even cover my rent. First I burned through my savings, then my overdraft, then I started borrowing from my mum to get by. I returned to University, brought the council a letter dating the period of when I wasn't attending the university and thus was entitled to benefits. They said, after all that, I wasn't entitled to anything and that the letter they issued to me previously was erroneous.

There I was about £7,000 out of pocket, any recovery I made during the 12 months went out of the window. I took up gambling in attempt to make up the money I lost. And despite putting in the time and having many winnings, as soon as I'd lose any money - I'd start chasing losses and gambling irresponsibly. I think I probably don't need to paint the picture further to suggest that I've lost several thousands doing that. By that time I was borrowing from my mum to gamble and gambling on my credit card too. I did take my case to a lawyer who said I definitely had a case that was worth pursuing, but by that time I was too ill to carry on with it.

Eventually my mum took me out of university (my final year), as I was no longer attending, not eating or drinking - that's how bad it all hit me. I didn't share the full extent of my debts with her and carried on gambling whilst living with her. Hiding bank statements under my pillow. Eventually my direct debit to pay off my credit card bounced as my overdraft was maxed out. I made up some lie to my mum to cover it and paid it off that same day at my local branch, but I think that must've affected my credit score negatively.

I tried to get my debt under control, shared my experiences on gambling anonymous types of forums. In that time I was obviously not spending anything on the credit card and one day I got a letter from my bank saying they were taking away my card from me due to lack of spending activity. I protested and argued but they said, I could reapply again. By that time of course I had no job and wouldn't have gotten approved anyway.


I would love to get a credit card again. I wouldn't recommend it to anyone (especially on benefits) as a form of borrowing. The only correct way to use a credit card is to use it as a debit card and pay it off in full at the end of each month. There are of course credit cards that offer 0% interest rate for 12 or 24 months, but you are unlikely to ever get approved for one unless you are in a stable employment earning a decent wage. At best you can get approved for one of those 36%-40% Aqua or Vanquis cards for people with bad credit score. Although I recently read an article that suggested more and more banks were approving cards for people with 0 employment income.

Credit cards do offer additional buyer protection, that debit cards simply do not. If you are fortunate enough to enjoy a foreign holiday (I am not) - then there are cards that don't charge you for foreign currency transactions. There are also cards that offer benefits such as 0.5-1% cashback rewards on your purchases, and so on.

I would urge a lot of caution and self-control when it comes to spending on your credit card and making sure you pay it off in full by direct debit at the end of every month.

Apologies for hijacking the thread, hope some of the info was useful. Feel free to ignore the personal account in grey.
 
Fairy Lucretia

Fairy Lucretia

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i got into debt with a credit card
and had to have a DRO which has severely damaged my credit rating

somebody else got me into debt with it actually by taking advantage
please be careful x
 
Not_Crazy_Yet

Not_Crazy_Yet

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I have gotten into trouble with credit cards over the years. I do plan to get another for emergencies. As Burt said its good to keep a balance. Charge say, £50 a month on it then pay back £45 at the end of the month. Don't buy luxury items with it. Pay your electric bill, or your cell phone bill with it. Keep doing so but once you reach maybe 15-25% of your available limit pay off nearly all of it and continue that process for a while, but don't charge anything else unless its an emergency. Its important to pay your bills with it so that you already have the budget to pay each month. It will cost you a few dollars or pounds to do it this way but your credit rating will improve DRASTICALLY as you're seen as very little risk.
 
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ramboghettouk

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i think with credit cards it's easy to forget to pay off the months balnce and then incur bank charges, that after all is why banks offer them they're out to make a profit
 
Not_Crazy_Yet

Not_Crazy_Yet

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i think with credit cards it's easy to forget to pay off the months balnce and then incur bank charges, that after all is why banks offer them they're out to make a profit
Very true. But if you use it to pay your household bills and make a habit of paying the cards balance it can improve your credit score quite a bit. Oddly enough just having a card and not using it doesn't really improve your rating.
 
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ramboghettouk

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you americans and your obsession with your credit rating
 
Prairie Sky

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I couldn't buy a house because I didn't have a credit rating. But, everyone strongly advises against credit cards. The only real benefit I can see other than the credit rating is in buying things online, and you can do that with PayPal.
 
Not_Crazy_Yet

Not_Crazy_Yet

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you americans and your obsession with your credit rating
You should see my credit rating. Lol. Its increasingly important as some jobs require you to have good credit, also more and more landlords require a good credit rating to get an apartment. So you cant get a good job or a decent place to live without good credit. My last job did a credit check on me, the job I was applying for wasn't as a manager, stocker, or even cashier. I was applying to be the dishwasher. That's F'ed up.
 
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ramboghettouk

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You should see my credit rating. Lol. Its increasingly important as some jobs require you to have good credit, also more and more landlords require a good credit rating to get an apartment. So you cant get a good job or a decent place to live without good credit. My last job did a credit check on me, the job I was applying for wasn't as a manager, stocker, or even cashier. I was applying to be the dishwasher. That's F'ed up.
i never said it wasn't understandable

i', spending more on fuel and food at the moment than i've got coming in,they talk about those on universal credit having to choose betweej heating and eating, it is winter and i've got my savings float, anyway the last thing i need is a credit card
 
Not_Crazy_Yet

Not_Crazy_Yet

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i never said it wasn't understandable

i', spending more on fuel and food at the moment than i've got coming in,they talk about those on universal credit having to choose betweej heating and eating, it is winter and i've got my savings float, anyway the last thing i need is a credit card
Its good that you have your savings to fall back on, I would like to do the same but once I get my benefits I'll only be able to have 2 thousand in assets so I'm gonna leave a grand in the bank for unforeseeable expenses but keep a credit card for emergencies. That should build my credit quite a bit so in the future maybe I can get a home loan. Oddly enough you can own your own home and its not considered an asset for benefits.
 
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ramboghettouk

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Its good that you have your savings to fall back on, I would like to do the same but once I get my benefits I'll only be able to have 2 thousand in assets so I'm gonna leave a grand in the bank for unforeseeable expenses but keep a credit card for emergencies. That should build my credit quite a bit so in the future maybe I can get a home loan. Oddly enough you can own your own home and its not considered an asset for benefits.
your allowed so much savings then every 250 over you lose a pound a week benefits to 16k when they're stopped completely, you can have twice as much if your in residential hostel

seems i'm not in a hostel that hasn't stopped the housing assoc putting up official looking fire notices, wouldn't impress visitors, my neighbours just pulled one down
 
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