Credit card idea

[BobbyBobBob]

Can you tell me whether this sounds like a good idea please!

My partner and I have combined our incomes which goes into our joint account. We also still have our own separate accounts which we pay a set amount a month into to do what we want with.

In my name I currently have 2 credit cards. One which has a balance of about £600 on and is being paid back using the joint account. This credit card is due to lose it's 0% next month so I am awaiting another credit card in the post to transfer the balance. The other in my name is my own which I very very rarely use.

With Christmas coming up I was originally going to use the money we each get of our own from the joint to pay for her Christmas presents but I'd have nothing left for that month if I did, so I had an idea of getting another credit
card which has 0% on purchases for 14% months to pay for her presents and thats it. ( this would be in place of my current credit card I mentioned above, that i barely use. So I'd still have 2 at this point as I'd cancel my other one)

Effectively, all I'm doing is getting two new credit cards, and cancelling the other two. One to swap a balance and one to use for presents and pay back over the months. This way I'd be saving a bit of cash for that month. Does that make sense?

Thanks

[boxtops]

It makes sense in that this is exactly what I would have done in the past, keeping on swapping from one 0% to another, but it catches up with you in the end. It does your credit rating no good, either (I learned only recently) to keep moving the money from one card to another - you never actually address paying off very much of the money you've borrowed, and the lenders have no way of knowing that you're not going to spend up to the max on all your cards each month.

You'd be better off getting a bank loan from your bank to pay off the £600, and borrowing a bit extra to pay for your partner's Christmas presents.

We stopped buying each other Christmas presents when we couldn't afford it - we were only adding to our credit debt to do so, it just wasn't worth it.

You will also find that at some point you will be rejected for a new card, if you keep getting new ones just for the zeroes - it's not worth it.

[BobbyBobBob]

I should add that we aren't in that much debt and are actually quite comfortable with finances. I wouldn't be spiralling into more debt because of it. The idea was simply to have the extra let's say£150 for that month to keep instead of it going on presents and to use the card. And that's all I'd use the card for so I'd be paying 10 a month to pay it back off.

I do appreciate what you're saying though boxtops.

[pretty_snowdrop]

I agree with boxtops. Do not get caught in the 0% balance transfer trap. It will all have to be paid off at some point. Apply for a small loan and forget the credit cards.

[micmak]

I do not have a credit card. Nor do I want one. I was brought up to save up for what you wanted, it makes you appreciate it a whole lot more. May I add I have never had a bank loan either. Maybe if people did save up the country would not be on its knees. I did have a mortgage though,and put every spare penny into paying it off as quickly as possible.

[boxtops]

I wish I'd never had one, micmak - but in the eighties, the Spend culture beguiled me....

[dasherman]

Nice one micmak! Personally I have got a credit card, I think it's sometimes easier and safer to use one, but I always pay it off in full every month! And it helps to keep my credit rating up!
But have never taken out any other sort of loan including mortgage, as I saved up to buy my house.

[MarkRae]

There was a thread on a similar subject a few weeks ago.

I would agree that getting a small loan to pay off the credit card is a good thing, not only because you'll probably save a little bit in interest in the long run, but a small amount of managed debt is extremely good on your credit rating.

In some ways, having no credit cards can be detrimental in terms of credit rating because it gives companies like Equifax et al little or nothing upon which to calculate a credit score. Of course, if you will never have need of credit, then it doesn't matter.

[sidkid]

I've also read somewhere that those who pay their cards off every month and therefore pay nothing to the CC companies also get marked down as they are not 'good' customers from the CC company point of view.....

[micmak]

Don't give a fig what my credit rating is. Saving hard and not wasting money has put me in a very nice position. That makes me sound tight, bit I'm not. Several foreign holidays every year (until ill health stopped them) I buy what I want when I want it.

[MarkRae]

That's correct, Sidkid, but there's also nothing wrong with not having (or needing) credit. Credit card issuers need us far more than we need them!

[sidkid]

Fair point Mark, but don't they check your credit rating when you request a mortgage...?

[DaisyNonna]

For goodness sake buy her a Teddy Bear!