Debt

sf101

I only use my credit card for online shopping, much better protection, and set up to pay the balance every month.

Yes, this really is the sensible way to shop. I very rarely use my debit card at all now, and do most of my grocery shopping online too. My credit card statement gives me an exact list of all my monthly spending. I do occasionally do bank transfers to pay for things, but only when I know the payee well enough to trust them.

Paperbackwriter

Why have a credit card if you pay it all off every month? Air miles!

Air miles, free flights!

Luckygirl3

*If you can pay it all off on the due date why do you need a credit card?*

I too do this because it provides better safeguards in relation to refunds if you are the victim of fraud.

I do the same. I have 5 credit cards that I use regularly and another couple that are rarely used. The ones that are used make me money, because each one is paid off monthly by direct debit and I get cashback and special rewards for using them.

Why have a credit card if you pay it all off every month? Air miles!

Back in 1968 my Husband left me with a debt of £10 for some books he bought, I remember it as if yesterday and the shame I felt. Never been in debt since and I can't imagine some of the tales here. Debt was a number one shame back then.

We pay the balance off in full every month. The credit card gives you better protection if anything goes wrong PLUS we get cashback on all purchases. Win/Win

The National Curriculum for teenagers is already very crowded. I agree that some simple economics would be useful, but I think that the teaching of fiscal responsibilities is the duty of parents. Any child will have absorbed how their family manages the incomes/ outgoings from an early age, anyway.

Madeleine45 - you were absolutely correct to give them lessons like this and put in a way they could understand.

Looking back all those years to my schooldays - and the lessons that stick out in my mind were the ones where they were teaching us practical "life management" type things (like contraceptive lessons/a film on giving birth/debating society and mock elections/analysing adverts). So certainly money management is one of the most fundamental things imo.

I would say the most useful course I did myself was economics O level and that certainly taught some basic lessons about finances and has proven useful to me practically since. I still remember the basic gist of the "laws" of supply and demand - all that "How much are you prepared to pay for that second punnet of strawberries?" stuff - answer = "Rather a lot less - as you've already satisfied your basic craving for strawberries".

I have had to go the other way around. My way was to save and pay for items as I went along. If I couldnt afford it I went without, or bought second hand etc etc. However a few years ago, when I was looking at changing my car, found that I didnt have a credit history, and instead of that looking good, that it actually went against me as they had nothing to compare.

I then started to use a credit card for a few things, but with it arranged to pay off in full each month, so that there was no interest to pay. As far as I am concerned , it still remains the same as I used to do, I dont take on any debt I cant afford, but now I just make sure that I have enough in the current account to pay the credit card. As others have said it is safer anyway for higher level spending, and I now have a bank account that actually gives me something for things I have on DD etc., so that it actually covers the cost of the account too.

I still think in terms of what I can afford, and saving for it, but for me the credit card is more for any unexpected problems such as the washer going wrong or a problem with the car. That gives me a sort of safety net feeling, but thank goodness , have never needed to use it. Have very little pension etc., and it is important to me to keep myself out of debt, but with the cost of everything going higher, it is a constant worry, especially as I do not have a lot of luxury that I could give up. No one knows how life will go and sudden illness or loss of a job can plunge people into debt, but it can be difficult to save up any money even for emergencies, if everyday costs rise and you do not feel secure in your job.

There are so many things that have to be put into a school timetable, but I do think that perhaps in the maths area, some time spent explaining such things as debt, the difference between direct debit and the cost of credit and how to control it would be worth while. Even simple maths of children comparing the actual cost of buying for cash, saving a certain amount of money a month, comparing how the price might rise over the saving time, but comparing it to the overall cost if you buy on credit ,would be worthwhile.

When I was teaching junior children I used to do a couple of things with them to show them roughly how this worked. So they would have pieces of lego of different colours, representing money. Then we would have an item that they wanted to buy, and they had to choose how they would buy it, straight away or over time etc. In the beginning of course they mostly wanted to get it straight away, but didnt have enough lego for it. Then we worked out how to pay so much per month etc. We did this with several toys and I gave out more lego , and so we saw at the end of the time, that those who had paid monthly still owed lego and did not actually own the prize, but the one or two who had saved actually owned the prize. I removed the prize from those who had paid in bits and they were quite shocked to see that I could take the prize back when they had paid for some of it. It was quite a good way to show them how it worked, in a way they could understand. Some of course were still baffled by the whole thing but I felt sure that the lesson was learnt by others. If we can explain in simple terms that children understand then it is up to them , of course, what they do with the information.

It’s common sense to use a credit card for purchases and pay it off in full each month.
Why wouldn’t you want the protection it gives you?

We use a JL credit card for everything, earning £200-£300 in their vouchers every year. Free money!

M&S credit card and some other cards give you rewards for using their card so there is a financial incentive, albeit small these days, to use your card. Also since Covid when most places would only accept card payments and not cash, and so many banks have closed so you can’t get your hands on cash anyway, it’s just as easy to use a contactless cards. It’s easy however to run up debt if you don’t keep a strict eye.

I suppose we all manage our finances differently but paying for things on credit when you can pay for them yourself still makes little sense to me.

It makes perfect sense, especially when interest rates were high, because borrowing money at 0%, if you could, meant you could leave your savings where they could gain interest.

Only if it was at 0% or you paid off the balance monthly and promptly.

I'm still not getting it.
I took out my first credit card to pay for flights because my debit card wasn't accepted- that was about 30 years ago.
I then used a lot of 0% card transfers to pay it off, which took several years because it made sense to me as I was paying no interest.
I have since used credit cards to pay for purchases abroad because it is cheaper than withdrawing money from my bank account when overseas.
I have never made big purchases by card for furniture, cars or other products, household improvements etc because I paid for them out of my bank.
For years I had no debt, and only recently took out a credit card for another overseas holiday, my first in seven years.
Now I am paying off that card at 0% interest. I don't intend to use it again.
I don't think I need any financial advice.
I suppose we all manage our finances differently but paying for things on credit when you can pay for them yourself still makes little sense to me.
I suppose I'm just a bit odd.

keepingquiet

So people buy with a credit card because their purchases are guaranteed?

Forgive me being dim- but how does that work?

Last time I used my cc was in M&S at Christmas because I realised at the till that I didn't have my debit card. It was a food puchase.

So if I found the food wasn't satifactory I could have got my money back?

Surely however I paid for it I have statutary rights that says I can return unsatifactory goods- why does the credit back make that better?

I don't use a credit card for food but I do for other purchases.

If you have a problem with an item, a supplier or are scammed in any way, you can access more help if you have used a credit card.

You can claim your money back through your card if the ompany goes bust or you are defraauded.

I did that several decades ago when I bought items online that were never delivered aand I could not get my money back from the supplier either.

keepingquiet perhaps you need some financial education. Any item costing over one hundred pounds paid for with a credit (not debit) card, has protection from the credit card company should it not arrive (if ordered), not be the item that was advertised, is faulty. So many companies try to wriggle their way out of guarantees or tell people that their item is 'outside of a short guarantee time', or just ignore customer's complaints. The credit card company can refund the customer and even larger companies are unlikely to argue with a credit card companies.
Lawyers and legal rights people always strongly recommend that larger cost items are paid for using a credit card, because of the extra and strong legal cover it gives to them.
If does not necessarily encourage debt, it is very easy to set up a direct debit payment of the entire amount in each month, which means that people know not to spend more money they have.

Oreo

CariadAgain well done as am sure it was far from easy.It’s always tempting to use a credit card and forget that debt is piling up.

Thank you.

As many of us know - it's huge sigh of relief time when any debt has gone and mortgage paid off. In the event - I managed to pay that 25 year mortgage off in about 15 years. As each lump sum bit got repaid I gave myself a little "reward" for having made the effort to do so (I've got a couple of nice little bits of Victorian/Edwardian jewellery that were "rewards" for effort). I was encouraging myself to "keep at it". My job was absolutely horrendous and it took an enormous amount of willpower not to just pick up my bag and walk out the door - and I had to give myself frequent reminders that I couldnt afford it and it was just what my employer wanted me to do (they were past masters at constructive dismissal type tactics - but I managed to hang on in there till retirement and just walked out the door at lunchtime - but then walked back in again after lunch).

I was always very conscious of the fact I'd landed up unemployed 3 times - and for over a year in total. So the thought I might get thrown on the dole queue again whilst I still had a mortgage and they had started cutting what they gave people for that was more than a little scary. I definitely slept that bit better at night once I'd got rid of the last bit of that mortgage. It's a huge relief to know the roof over your head is "bought and paid for".

Look at section 75 of the consumer credit act

keepingquiet

If you can pay it all off on the due date why do you need a credit card?

I didn't use one for years but last year realised I was missing out on some good deals so I used it for my holiday.

I pay it off at a little over the regular monthly payments and so it is manageable debt.

My son now lives with me partly due to his credit card debt. He thinks people just give him money! He is now paying them off but it takes years. He will probably never have his own home.

People borrow money all the time- to buy cars and houses for example. It is just a way of life for many.

Welcome to the real world!

You should always use a credit card for large purchases and for travel ( flights hotels) ...far easier to claim if there's issues

32Sago

Financial management should be part of the curriculum.

I've always said this. Taught mine how to be financially aware when they were 15yrs old. They weren't keen at the time but have since thanked me for doing so and all are now very money savvy. As a side note, it was very refreshing to hear a shopper explaining to a teenager (probably her daughter) to check the prices per weight on the food labels rather than the shelf price.

Credit Cards can be a problem, we have one joint account we both pay into but its a Debit account so no borrowing.
We both have Credit cards in our own names and other accounts separately.

You never know what the future holds so plan for the worst

If you buy say for example furniture and something goes wrong and the retailer or manufacturer dispute it or go bankrupt you may get redress through the credit card company when otherwise you may be out of pocket.
It is only with a credit card and not a debit card I believe.
It also has to be above a certain value.
This is a simple explanation but covers the basics.

So people buy with a credit card because their purchases are guaranteed?

Forgive me being dim- but how does that work?

Last time I used my cc was in M&S at Christmas because I realised at the till that I didn't have my debit card. It was a food puchase.

So if I found the food wasn't satifactory I could have got my money back?

Surely however I paid for it I have statutary rights that says I can return unsatifactory goods- why does the credit back make that better?

CariadAgain well done as am sure it was far from easy.It’s always tempting to use a credit card and forget that debt is piling up.

Sallywally1 The cost of living crises is all too real.

The cost of living crisis may be real for some people.

credit card debt at the amount people take on like, for example, £20,000 is not indictive of the cost of living crisis.

Spending without enough income or savings caused the cc debt.