money sense?

[tigwig]

my work colleagues and I were having a conversation today about credit cards. I have always been lead to believe that they should only be used if absolutely necessary and if you can pay the balance off each time without incruing interest but one of my friend said she uses hers to live on practically keeping her own money in the bank and putting everything on a no interest credit card. I was quite astonished at this and thought it was a bit daft. Surely if you have money in the bank you should use that to buy stuff unless its for something really expensive? Also, once an offer comes to end on one card she just transfers the balance and puts it onto another meaning she has a new card at least every year without ever paying anything off except the minimum. She also uses credit card cheques instead of drawing out cash. I am exactly the opposite and only use my card if I have no cash! What do you think, who is right?

[Hawkwalk]

no one is right as you must do what you feel comfortable with. Your friend gets money on credit and pays no interest whilst gaining interest on her own money in the bank which makes good sense. The only problem with that is, one day it will need to be paid and if she does not have the finances to do so she will pay a very high interest rate.

Her system is good if well managed. Your system is sensible and safe.

[Ethel]

I use my Tesco credit card for everything I possibly can - even some regular bills.

I pay it off in full every month - meaning my money is earning interest in my current account AND I get over �300 worth of Tesco vouchers each year.

There are advantages to buying goods with credit cards - the main one being that if the goods are faulty or not as described, I can recover the money from the credit card company if I can't get it back from the trader - s.75 Consumer Credit Act (providing goods cost over �100). It is essential to pay for major purchases, flights and holidays with a credit card for this extra protection.

I would never use credit card cheques - they are expensive! Interest starts accruing immediately and there is a fee attached, and s.75 does not apply.