Monday, 24 March 2014

We Use A Credit Card

There you have it. Shock and gasp.

In July 2003 when we started to get our financial lives sorted I read all the old stuff, Tightwad Gazette etc and tried virtually all of the tips. We got rid of the credit cards, I had one, Dan had a few. It was fine, we paid them all off, cancelled them and life was grand. Then, we bought something and like good people we paid cash all was well. In the time it took for us to pay for it and wait in for delivery, the company went bust.

I was distraught. Were it not for the fact that the administrator was very approachable, our item was in the storeroom and one ex-employee was amazing enough to bring the item to our house and fit it, on a Bank Holiday Monday, without being paid we'd have lost the item and our £1541. It would have been a very painful case of "stupid tax" and was sheer good fortune that it worked out in our favour. 

Never again. Dan got a credit card soon afterwards and we use the card for any larger purchases that we're not taking with us there and then, so we have Section 75 protection (at the time our debit card providers were a bit sketchy about the reclaiming process so we went for the easy option). We paid cash for the car though. That was an amazing feeling, well worth the additional two years of saving after debt freedom, I thought buying a car would take ages, I'd hardly had time to finish my free caramel latte before we were driving through the dales back home. 



  

8 comments:

  1. It is easy to 'throw the baby out with the bathwater' in the 'Frugal People and Credit Cards' debate.
    We have two cards which we pay off in full every month - one is our 'personal' one and gets us the protection for larger purchases. The other is for things we have to buy 'on expenses' in connection with work stuff.
    My best friend contatce dmy husband for advice about buying a new computer and he said 'use a credit card' - she said 'but I have the money saved in the bank'. He explained why ...so she used CC, and we are so glad she did - the firm went bust, and she got her money back. Cash would have been lost

    good post, thanks

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    1. Thanks Angela. I think you're right, it's so easy to get carried away with the newness of all the ideas and the desire to feel feel like you're doing something when getting started with the money stuff. That can lead to mistakes and dead ends, but we all find our balance in the end.

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  2. I might have paid off my credit cards recently, but there is no way that I would cut them up. They are really useful, especially if you want to buy something online and don't want to use your current account details on the internet. You are completely right to have one and to use it for consumer protection purposes. It makes absolute sense.

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    1. Good point. With internet banking being so simple these days it's no problem to pay the card off asap.

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  3. We have a credit card which we keep for the same reasons as johnnyjumpsup has outlined. I use it when making online purchases such as my prepayment prescription certificate. I've had my credit card compromised in the past - someone took a £1000 holiday on it, which caused me very few problems- a couple of phone calls and it was sorted ( being a fraud investigator in a previous life helped). If my debit card had been compromised it would have been a completely different kettle of fish and would have caused no end of problems.

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    1. Wow, that could have been a lot of fuss had it been on a debit card. Thanks.

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  4. We also have a credit card for purchases that we make that we would want to insure against. Although we could pay cash it makes sense to take advantage of the better side of credit cards. Similarly we would always take advantage of interest free credit offers and keep our money in savings a bit longer gaining interest.

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    1. Thanks. I'd forgotten until you said about interest that ours is a cashback card too, as we only buy things when we have the cash for them it's an added bonus. As you say, it's the better side of them.

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