Have you been caught out by your credit card?

I use a credit card for convenience – not for getting into debt. It saves carrying too much cash and at the end of the month gives me a tally of my spending, which I then pay off in full. It seems to me we regard debt as a right – and credit as a means of buying things we cannot currently afford – or may not buy if we thought harder about it and had to fork out hard-earned cash. How to promote a culture of saving to buy might be a better use of time than promoting easier credit – that only serves to get the “vulnerable” into more debt.
The trouble is, reducing credit quickly will damage the economy we have gradually created that depends on spending money we don’t immediately possess.

APRs should be capped and not doubled overnight.

CLEAR warnings should be given on significant changes such as bringing forward the due date or reducing the limit (Both techniques to induce charges)

I’ve had credit cards for years and only once have I paid interest, but that was because I didn’t read the statement correctly and sent the payment 3 days late. Needless to say when I realise my mistake when I got the next bill I overpaid it immediately and have paid all bills via direct debit since.

I did find it odd that they’d kept upping my limit without me asking but it never made me spend more than I wanted to anyway. Only once have I asked to have my limit up, enough to buy a car and have the previous outstanding on it at the same time. So I now have a card with a £20k limit and I’ve been unemployed 3 + years. Which means I have almost no chance of getting a new one. So I’ll just keep the other 3 cards just in case 🙂

Convenient though credit cards are, both the banks and the credit card companies use outdated computer systems that are unable to keep up with credit card usage. These systems also use unsophisticated algorithms that keep blocking cards on the grounds of “a security concern”. I cannot remember how many times I have been in a foreign country and had a payment by credit card refused and asked to call the card company because it could be a fraudulent transaction. And this is despite having called the card company in advance to provide precise dates and countries being visited. The other nonsensical excuse they give for blocking a transaction is “other customers have had their cards used fraudulently, so we we thought we would assume yours had been stolen too!

Its all too pathetic. Perhaps if we paid the credit card executives higher bonuses the situation might improve.

Like many people, I use credit cards because they are a convenient form of payment, they offer can offer protection on certain purchases and it gives me time to ensure that the bill will be paid on time. All this costs nothing if I avoid using a credit card if a company makes a surcharge to offset what the credit card company charges them for providing payment services.

On the other hand, my bank would charge me a fortune if I borrowed the same amount of money that I routinely spend on my credit card. The bank has the benefit of a regular monthly payment (at one time my salary and now my pension).

We live in a crazy world. 🙁

I have three cards, an excellent credit rating and have been pestered by Barclaycard and HSBC with 0% Balance transfer offers. Earlier this year I wanted to pay for a holiday but did not want to take investments out to do so as the Stock Market was down. I weighed it up and applied for a “0%” deal with HSBC for 20 months, knowing that there was a 2.9% fee. They even rang me to check ID etc. in view of the amount. What no-one told me was that any subsequent purchases on that card would not have the usual interest free period until the whole balance was paid off. It is not at all explicit in their T & Cs; it is even difficult to locate the obfuscated paragraph. I think people should be made more aware of this and agree with Which’s campaign re. banks hidden charges.