Approach to warchest building up

[d000hg]

There is a risk that credit card companies will cut your limit as you pay the cards off or immediately reduce you limit once you stopping paying off a card in its entirety.

Keep using the card for your grocery shopping and then paying it off. It depends what you count as a decent limit - 5 cards with £5k limits is not difficult.

As for the 0% thing - yes that's a special case.

[NorthWestPerm2Contr]

There appears to no logic in this thread.

I worked a few months in a Barclaycard call centre many years back (in my student days) and that taught me everything I needed to know about credit cards.

Rule 1:
If you have a brain then you should never pay any interest - I have been in debt for 6 years now and have never paid any interest on a credit card

Rule 2:
If you use credit card for purchases then make sure you always pay that off at the end of the cycle

Rule 3:
If you want to keep debt on a credit card then ALWAYS have it on a 0% Balance transfer deal and make sure it is the best one available at that time i.e. I have a few k of debt on a Virgin Credit Card with 18 months of interest free and I paid a fee of 3% on that.

Rule 4:
If you ever end up in a situation where you are out of work then don't keep debt on a high interest account, simply open a new one and transfer over.

I am saving a warchest up now but I have a credit card on 0% until end of next year - so what's the problem here? I am paying off the debt with minimum payments (1% of balance) and not paying any interest. At the same time I have money being saved up. Result = win win

Main thing to do is avoid paying interest and save that money you would otherwise be paying. At the end of the term you then have the option to save/invest that money or pay off the debt without losing anything

[psychocandy]

There appears to no logic in this thread.

I worked a few months in a Barclaycard call centre many years back (in my student days) and that taught me everything I needed to know about credit cards.

Rule 1:
If you have a brain then you should never pay any interest - I have been in debt for 6 years now and have never paid any interest on a credit card

Rule 2:
If you use credit card for purchases then make sure you always pay that off at the end of the cycle

Rule 3:
If you want to keep debt on a credit card then ALWAYS have it on a 0% Balance transfer deal and make sure it is the best one available at that time i.e. I have a few k of debt on a Virgin Credit Card with 18 months of interest free and I paid a fee of 3% on that.

Rule 4:
If you ever end up in a situation where you are out of work then don't keep debt on a high interest account, simply open a new one and transfer over.

I am saving a warchest up now but I have a credit card on 0% until end of next year - so what's the problem here? I am paying off the debt with minimum payments (1% of balance) and not paying any interest. At the same time I have money being saved up. Result = win win

Main thing to do is avoid paying interest and save that money you would otherwise be paying. At the end of the term you then have the option to save/invest that money or pay off the debt without losing anything

Yes true but with 0% they're not forever. I know its getting better recently but they were scarce a few years back too.

And of course every time you switch to a new one its 3% or so (MBNA charge 5%) on top....

I've got a decent lifetime of balance with M&S for 2.9% so I think thats much better.

[psychocandy]

Keep using the card for your grocery shopping and then paying it off. It depends what you count as a decent limit - 5 cards with £5k limits is not difficult.

As for the 0% thing - yes that's a special case.

Im knocking on a bit now mind and some of the cards like my amex Ive had for years and years. Had back in the day when they used to throw money at you.

I added them up the other day and I think it came to over £100K of available credit. Scary.

[MarillionFan]

There appears to no logic in this thread.

I worked a few months in a Barclaycard call centre many years back (in my student days) and that taught me everything I needed to know about credit cards.

Rule 1:
If you have a brain then you should never pay any interest - I have been in debt for 6 years now and have never paid any interest on a credit card

Rule 2:
If you use credit card for purchases then make sure you always pay that off at the end of the cycle

Rule 3:
If you want to keep debt on a credit card then ALWAYS have it on a 0% Balance transfer deal and make sure it is the best one available at that time i.e. I have a few k of debt on a Virgin Credit Card with 18 months of interest free and I paid a fee of 3% on that.

Rule 4:
If you ever end up in a situation where you are out of work then don't keep debt on a high interest account, simply open a new one and transfer over.

I am saving a warchest up now but I have a credit card on 0% until end of next year - so what's the problem here? I am paying off the debt with minimum payments (1% of balance) and not paying any interest. At the same time I have money being saved up. Result = win win

Main thing to do is avoid paying interest and save that money you would otherwise be paying. At the end of the term you then have the option to save/invest that money or pay off the debt without losing anything

Absolutely spot on thread. You pay everything on credit card. Every little thing.

I've had an average balance of around £30,000 per year owed to credit cards for the last 13/14 years ever since I started contracting. In the past balance transfers at 0% were free. During the credit crunch they disapeared and for about a year I reduced them. At one point I paid them all off because the cost of the transfer 3% for six months was a waste of time. Most I've owed has been £50000.

Now they're offering 2.5/2.9% for 18 - 22 months.

During the early years I used the £30k in my offset balance. Now I have it in a 5.05 savings bond. Including cash back in 13/14 years I estimate I've made about £18000 - £22000 on credit cards.

That's how you build a warchest.

[NorthWestPerm2Contr]

One thing I forgot to mention was to close any unused credit cards down immediately, that way you can open it up again in 12 months. I just keep rotating amongst the best credit cards paying an average of 2% Per year. Really not bothered about that debt anymore as it is setup on direct debit. Just make sure you restrict your debt to 1 or at most 2 credit cards.

[northernladuk]

useful stuff

Thats a nice post. I also used the 0% interest with a vengence when it was free. Bought two houses using the credit. Had to knuckle down and pay it off when the charges started but had some good deals so was happy to use it. Nowadays I stay away if I can. 3% is peanuts but more peanuts than nothing.

Just bringing this back to OP's post. I fully agree with never using a credit card if you can help it but one of the main ways out of debt... whatever kind of debt you have... is to have a blanced and manageable income. People get in to debt when their costs fluctuate and income changes. In Psycho's case by not building up a warchest and being sensible with paying it off she could get in to the case where she has no income and has to go back to this debt so defeating the object and potentially having to pay the 3% charge again or whatever the circumstance.

A balanced approach where every penny is accounted for and you have a steady flow is much better for debt contol than banging it all in to one area then struggling in the other IMO.