Rip Off card charges

R

ronk

Lifer
 Durham
I don’t use my credit card for “credit “ purchases fortunately and have just received my annual statement.

They say the Bank of England Base Rate is 0.1% and they show that they are charging 11.9 %
I’m glad I pay mine off in total each month If I do spend on it
 
I only use mine if I can pay it off too. I use it more for the consumer protection but you must have quite a good card. Most of the ones I’ve seen, and the two I’ve currently got, are around 18/19%
 
I feel genuinely sorry for people having to use them for credit
0.1 % to 11.9 % is a sizeable mark up!

Add to that if you were to make minimum payments each month you would be in debt forever and a day.
 
Mine was going up about 1% a year, year on year. But as it's only used to guarantee hotel bookings, etc. and I pay anything spent on it immediately, it doesn't matter what the rate is.

If I know I'm going to need it when I'm abroad (some foreign petrol stations won't take 3 of the 4 cards I carry, so one card is only use for that), then I've even been known to pre-load it before I go.
 
11.9% is cheap - most of them charge more like 20%!

I've always made a point of clearing mine every month they're just handy for payment protection, and I got advance purchase options for some gigs on my AMEX (back when there were gigs). Plus it was handy when abroad.

But if you work them right you can get 0% for a fixed period if you take out a new one - you just need to avoid getting carried away!

I had a Virgin One account run by RBS and they wrote to me late in 2019 telling me I needed to close the account by May 2020 because I had cleared my mortgage and the term would expire then.

Luckily I had a Nationwide ISA and they sent me an offer of £100 credit if I opened a current account with them, and interest on the first £2,500 credit in it. So I took up that option in January 2020 and while I was doing that they offered me a Visa credit card interest free for 15 months.
Then I used the credit to keep the current account over £2,500 and got about £10 a month interest on it all through 2020.

So between those 2 offers I've made around £220 in a year, which is pretty impressive given current interest rates on savings. :)
 
I have to agree that credit card interest is astronomical.
I also only use my credit card for eBay/PayPal payments or anything that could benefit from payment protection and then pay it off in full when due, what I find annoying is how they charge the full amount of interest even if you only pay one penny less than the total due, I’ve had to contact my credit card company a few times when I’ve miss paid the balance by a few pence, luckily a quick phone call got it resolved, I now have a direct debit set up so don’t have to worry about that interest charges.
 
Tell me about it, my youngest daughter got into terrible debt four years ago she has a good job, company car nice house etc. the only good thing it was not drugs. The Credit card bill was nearly 26k because she just paid the minimum payment she just sunk further and further until it came to a head where she was really ill. In the end I paid out and cleared it all and she pays me back £500 a month, just wish she would have come to me sooner.
 
Hilly30si said:
Tell me about it, my youngest daughter got into terrible debt four years ago she has a good job, company car nice house etc. the only good thing it was not drugs. The Credit card bill was nearly 26k because she just paid the minimum payment she just sunk further and further until it came to a head where she was really ill. In the end I paid out and cleared it all and she pays me back £500 a month, just wish she would have come to me sooner.
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I note that the warnings on the bill regarding that situation are quite brief and not well highlighted- but they don’t make money out of 100% monthly payments.
Isn’t it only a minimum 5% of the bill repayment each month?
 
I think my Barclaycard is under 3% min monthly payment so you’d never get out the bit if only making minimum payments
 
I had a very modest upbringing as my dad passed away when I was 13 so proper use of credit was something I learned by making mistakes in my early twenties. Now I only use a high reward Amex card (British Airways one for avios) and interest free balance transfer cards. The amex is used for every purchase including fuel, groceries and is linked to my PayPal and ultimately cleared every month. If for some reason I want to make a much bigger purchase I don't on the Amex and then do s balance transfer to an interest free card. Yes there may be a fee of 2.5% but the interest free term is normally 2 or 3 years so makes more sense to do this than any other form of credit.
 
I've never used credit in my life, I was brought up to only buy what I could pay for.

Hence a debit card is all I use, simple.
 
As stated if I use my card I pay it off right away. Usually only used if on travel and emergency expense comes up. That said IMHO our schools today need to stop this new "WOKE" cancel culture and get back to real education. They should teach a class on $$$ how to balance check books , what real items cost ie mortgage, food, heat etc. Also need to teach how to save for future expenses or retirement. I was at a local pastry shop sometime ago and there was a woman with her two small kids at a table. Guess they were maybe 4 and 6. She was actually teaching them to put half of what get for allowance away. Actually having a discussion on how to save. Now am sure she had to teach this over and over. But my point is more parents need to do this. Am not shy so I went over and praised her for doing this she was surprised someone would appreciate it.
 
ronk said:
but they don’t make money out of 100% monthly payments.
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Don't you believe it Ronk. The card companies charge the vendor everytime they accept your card, rememeber, regardless of what you do after!

18% is about average for someone with good credit score apparently.
I heard a few years ago that credit card companies then (and can't see why it would be different now) expected an average credit card balance, which was then an average of £4,000, to take 20-25 years to clear :o

When I had debt (mortgage etc) I used to get letters offering new credit cards all the time. Since I've had no debts I get none, not one! Anybody would think that they target the vulnerable, if you were cynical :wink:
 
rdm05z4 said:
Actually having a discussion on how to save. Now am sure she had to teach this over and over. But my point is more parents need to do this.
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I think one problem is that many parents don't know how to do this themselves, so can't teach their offspring. :o
 
dr_john said:
I've never used credit in my life, I was brought up to only buy what I could pay for.

Hence a debit card is all I use, simple.
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I can see the merit in this but at the same time with a little bit of discipline you can use a high reward credit card and never actually be in debt. It's effectively a bonus for you by paying for stuff you were already going to buy anyway.

As said I use the British Airways Amex for everything and clear it immediately. Just doing my normal spending on it has got me 2x 2 for 1 flight vouchers on any BA booking plus the accumulation of Avios points. Our plan is to book a trip to Japan so I will pay for my return flights, the missus will go for free and then use the Avios to upgrade my cabin class.

There are loads of other offers that become available too. During the eat out to help out scheme there was an offer or £5 back when you spent £20 and participating retailers. Loads of restaurants were included so you could spend £40, get £20 off from the government scheme and then just by using your Amex to pay you got another £5 off.

I know the BA version may not appeal to everyone but they have other types with different reward options.
 
We have a Tesco card and use it for most things. We get club card points on each transaction which we use for free hotel breaks.. when we can again.
It's always paid off each month, so don't get hit by the charges.
 
The modern banking system is there to make money for it"s share holders. But as Mr Tidy demonstrates if your shrewed and read the small print you can do fine out of it. If you borrow on most credit cards for a month, then pay in full. Then you get both a moths free lone and protection from many potential pit falls, such as firms going bust. Many don't and some can"t pay in full. Which means profit for the banks, but also allows the rest interest free loans and protection from fraud.

I still love cash though. :thumbsup:
 
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