Limits on total debt across multiple credit cards...?

[IanSmithCSE]

Good afternoon,

I got rid of my credit cards when I retired, just pay cash for everything. About the only thing that makes me think about getting one again is the slightly better protection you get from them. But I can use Paypal for similar protection.

I understand the lack of need but I have a credit card that I put almost everything I can on to and then pay off the statement blance at the end of the month.

The card is with Captial One, they are so used to dealing with high risk customers that in general their service is brilliant.

The sole purpose is to retain a proof that I exist and if something really unexpected happens then there is a credit history. On one of the COVID threads I got quite a lot of abuse for saying that I am not and never have been registered with a GP as an adult.

Both current and previous governments have become obsessed with online proof of ID and organisations have taken this even further. I once took an employer up on his misguided notion that I had to prove my right to work, they were flabergasted when I said no and took up their offer of if you don't prove it by Monday....

I had a bad time through COVID, no work and no furlough payments and this made me look at my bank again, basically they seem to say if your current account ever drops under £5k they won't offer an overdraft regardless of any amount in a savings account.

With banks having delegated responsibilty to computers it seems to me that it is worth it to play their game in case things go wrong.

Bye

Ian

 

[Ian H]

We, on the other hand, use the Credit card for almost everything beyond very small purchases and places that don't take card. We do carry some cash, just for those, but not very much.

We pay it all off every month by direct debit, it is about convenience, not debt. We could use the debit card instead, but you do get a little bit more protection by using a credit card. And if we make a purchase that would exceed what is in the current account, it gives us time to traansfer some from the savings account (very are, money usually goes the other way, whenever it builds up a bit in the current account).

When I say cash, I don't mean actual coins and notes, just not credit.

 

[Alex321]

Both current and previous governments have become obsessed with online proof of ID and organisations have taken this even further. I once took an employer up on his misguided notion that I had to prove my right to work, they were flabergasted when I said no and took up their offer of if you don't prove it by Monday....

I don't know when that was, but it is certainly a legal requirement now that they get evidence of citizenship or other right to work in the UK. So it not be a "missguided notion" now.

I'm not quite sure when this law came in, but it was certainly pre-2019.

 

[Gunk]

I got rid of my credit cards when I retired, just pay cash for everything. About the only thing that makes me think about getting one again is the slightly better protection you get from them. But I can use Paypal for similar protection.

I‘ve not used a credit card for years, I’ve spent my entire life being financially over cautious and avoiding any real risk, but I think that comes with 20 years of running my own business. However at the age of 60 I’m semi retired now with no mortgage or debt so it was probably a reasonable strategy.

 

[kynikos]

... I went with a 2 year baseline as that's the point at which you'll likely run out of your 0% offers based on experience.

The strategy of open the account/take the credit/pay it off at the end of the interest free period/close the account has worked well for me. You usually find that most institutions will then let you start all over again, often after only six months.

 

[wafter]

@wafter I have an account with Experian, it's free. Many years ago government websites were using Experian for identity checks. I signed up then. I've kept the account as it's useful to check my credit rating and credit offers.

By household expenses I've presumed you mean utilities, council tax, food etc? I prefer to pay household expenses as they become due. I feel if I can't cover these without credit I'm going beyond my means. I recognise it's a personal choice. For me the interest would need to be very substantial to make the exercise worthwhile. I view credit card spending as far too easy and only use it when I need the consumer protection offered. I always pay off the full amount unless it's the type of purchase I mentioned earlier.

I've only ever done balance transfer, never 0% spending. I do use PayPal credit for the interest free four months. It simply helps my cash flow. On a pension spreading, for example, £120 on a pair of bib tights helps cashflow for that period.

I like to keep an emergency amount of credit available. My CC debt is only 38% of the credit I can access on cards.

Thanks - that's an interesting approach with the expenses; surely since you've got to pay these anyway you might as well chuck them on a card and earn a bit of interest on the cash retained?

I have DD's setup for most stuff that I can't pay for with credit (mortgage for example) and pay the rest on demand with credit - especially because avoiding monthly payments keeps the money in your pocket for a bit longer.

Thankfully as wonky as I am at managing many elements of my life, impulsive / unnecessary spending has never been something I've had a problem with, and I certainly never turn to debt to finance purchases that I could otherwise never afford from accessible funds. This is probably because being perpetually saturated with anxiety has made me extremely risk-averse..

I've never tried Paypal credit but tbh couldn't be bothered as the interest free period is that short that it doesn't suit my nefarious ends. All good if it works for you though of course

Pretty much meant an extra part time job, be it uber or working in a shop part time. I've done it before to boost income but no reason it can't be done to boost savings - especially if you invest all of it, you'd only have to do 12 hours a month to beat the additional income at the two year mark - and invested it all you're doubling up effectively. And the upside is it is almost no risk.

Edit to add: I've boosted my regular saving by using the round-ups on my card transactions. Natwest takes each transaction and rounds it up to the nearest £ and adds it to a savings account. They let you double the round up too. Just ensuring I pay for everything I can with my card means I'm saving up to £20 a week extra. Not hugely noticeable day to day but it adds up fast.

Ahh, OK. Tbh I'm less keen on more work as what I have is sufficient (both to cover my costs and leave me physically and mentally knackered at the end of my short working week).

That Natwest card sounds pretty good if they're chucking something extra into the pot

I got rid of my credit cards when I retired, just pay cash for everything. About the only thing that makes me think about getting one again is the slightly better protection you get from them. But I can use Paypal for similar protection.

A perspective I can certainly appreciate. Viewed under normal usage I see little point in them (other than the level of consumer protection they can provide) while I'm very dubious of the effect cheap / freely available credit has had on our economy, people's personal finances and the cost of goods.

This of course is also part of my motive to borrow at their expense and invest to my advantage, as a way of gaming the rotton system a little.

Rumour is the cash ISA annual limit will be reduced to 10k in the upcoming budget sadly, shares will likely stay at 20k

Thanks and yes - I've heard similar... although again with my finances this is of little concern to me personally. Potentially crap for exposing people to more risky investments / the creation of asset bubbles though.

Don't worry about your credit score, it won't have much effect. Keep on applying and be sure to have funds available when 0% rates expire. I'm retired and a long time stoozer with £90k+ on 0% and a similar amount invested which is giving me £5k+ a year income I wouldn't otherwise have. Latest offering is from Barclaycard 15 months balance transfer @ 0% with no fee.

Wow - you're really hammering that - great, aspirational work!

How are you managing to roll that from one card to the next - spending or balance transfers?


Since this thread has given me a lot to think about I've investigated a few more avenues.

My credit rating has actually gone up a little since I joined Credit Karma, so no obvious damage there.

It is lagging somewhat on my credit utilisation / the credit cards I hold and does make the point that card providers don't like full credit utilisation... so I'll keep an eye on how things look as I borrow more.

That said I maxed out my previous one before paying it all off and closing the account which didn't seem to affect anything; although it wasn't as flagrant as I plan to be in future.

 

[Ming the Merciless]

I don't know when that was, but it is certainly a legal requirement now that they get evidence of citizenship or other right to work in the UK. So it not be a "missguided notion" now.

I'm not quite sure when this law came in, but it was certainly pre-2019.

Pre 2015.

 

[briantrumpet]

I‘ve not used a credit card for years, I’ve spent my entire life being financially over cautious and avoiding any real risk, but I think that comes with 20 years of running my own business. However at the age of 60 I’m semi retired now with no mortgage or debt so it was probably a reasonable strategy.

My parents had no credit rating whatsoever, as the only borrowing (£2000 in 1960 for their lifelong marital house) was from my gran. No HP, no credit card. Literally nothing.

 

[kynikos]

...How are you managing to roll that from one card to the next - spending or balance transfers?

If you're dedicated and want to run up high balances you'll want to be doing both. Also be aware of other opportunities - I needed a new kitchen last year and, whilst I had the cash for it, I took £17k @ 0% over 3 years from the kitchenco and left the cash invested.

Keep an eye on the market, especially for BTs - you can often get 12/15 month transfers @ 0% with no fee.