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Guide to Credit cards.

Discussion in 'General Chat Forum' started by $lim$hady, Sep 12, 2008.

  1. $lim$hady

    $lim$hady Member

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    Hi Guys,

    In the awake of the ****** news about the collapse of XL airline and millions of customer losing their money. I was very interested to hear that customer who paid by credit card will get a refund and customer paid by debit card have lost everything.

    I have heard this in the past relating to many other circumstances, as someone who does not have a credit card and always uses debit, can someone explain how “credit card users” benefit in these situation and whether I am disadvantaging myself by using debit.

    How does the credit card work, sorry to ask a basic question but I have never never paid any attention to “credit cards”

    Thanks
    S
    Last edited by a moderator: Sep 12, 2008
  2. figoagogo

    figoagogo Active Member

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    With credit cards you get protection, I think the are 50/50 liable along with the retailer/seller. If something goes wrong then they can "charge back" the money and refund you.

    There are T&Cs, e.g. £100 minimum spend for protection, and other disclaimers.

    Even if you don't borrow money it worth having a credit card, I always use one online etc, you can setup direct debits to fully pay of each month bill so not to worry about payments.

    You could also join one that gives cash back (egg) or discounted fuel (asda) - so you actually benefit.

    I get about £50 cash back a year from my C/C, its not earth shattering, but better than a kick in the teeth :D
  3. Hitby

    Hitby Active Member

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    afaik if you pay using a credit card the issuing company will pay you the money back should something like this happen and then attempt to get the money back from the company that has gone bankrupt/ripped you off etc. I'd imagine they're insured for this. It's worth paying for stuff on a credit card and clearing it every month for this reason alone.
  4. Iccz

    Iccz Active Member

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    I'm not totally sure but with a credit card it's the banks money as they pay for it then you pay them back, where as a debit card is your money straight out.

    I guess the bank holds more power or something when it comes to getting money back or something :confused:

    im sure someone will correct me :p
  5. andykn

    andykn Active Member

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    When you pay for something by credit card, the credit card company is effectively treated as if they had sold you the item as well as the retailer. I think its the Consumer Credit Act 1974.

    In practice, if you pay for anything over 100 pounds on a credit card you can get your money back off the credit card company if anything goes wrong the same as from the retailer. This doesn't necessarily apply in the same way if you use a credit card to pay for stuff via paypal.

    I just always use credit cards and pay the balance in full every month by direct debit. There's much better ways to borrow money.
  6. figoagogo

    figoagogo Active Member

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    Just one annoying point to add. Increasingly (budget) Airlines, Ticket sellers, Travel Agents are starting to charge for using Credit Cards - which is a real pain in the ass and makes you think twice about using a C/C or debit card :mad:
  7. Kebabhead

    Kebabhead Active Member

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    The 2.5% charge for using a CC is Visa/Mastercard companies handling fee charge.

    Most big companies absorb this cost
  8. nheather

    nheather Well-Known Member

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    Not true for the holiday companies. Every package holiday that I have booked in the last 5 years or so has required an extra premium (usually 1%) if paying by card.

    This is usually waived for the deposit (to get your business) but enforced for the balance.

    As a result I have always ended up using my debit card to pay for the balance (bulk) of my holiday.

    Cheers

    Nigel
  9. Kebabhead

    Kebabhead Active Member

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    Booked my holiday for Turkey next year just 4 weeks ago paid the deposit via CC was charged 2.5% additional for the privledge
  10. figoagogo

    figoagogo Active Member

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    Most, but more and more are begining to charge.
    Holidays are worse when they ask for multiple payments and try to charge each time!
  11. DJT75

    DJT75 Active Member

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    Easyjet took around £70 off me for using a credit card when booking 8 people on the same flight. It was over £20 just to use a debit card.
  12. $lim$hady

    $lim$hady Member

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    Wow, thanks guys for alot of information in a short time.

    Trying to understand this in practical example:
    Eg1 say I bought air tickets £500 i pay it off end of the month and the airline goes bankrupt 3 months later do i always have protection or only before i pay the end of month balance?

    Eg2 some fraudsters gets hold of my card details and spends £500, i guess I am protected and don’t lose any of my money? Whereas on DC I lose?

    Out of interest with CC I just googled say Capital one card it says:
    0% balance transfer rate
    Fee 3%
    APR 15.9%
    And the odd extra premium i.e. 1% as mentioned above….
    What does all this mean if I for eg spend 200 on CC each month?

    And is there a general rule (if one) when do you use a CC or DC as I use DC for everything (spending, online, bills).
  13. figoagogo

    figoagogo Active Member

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    see BOLD

    Also, goto MONEYSAVINGEXPERT and look at the money/CC section, will show you the best deals...

    I like Egg, easy to manage, cash back, more cash back on Virgin Wines + others, excellent customer service - and solve one problem I had very quickly
  14. figoagogo

    figoagogo Active Member

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    I gather that was a C/C charge per person, which doesn't make sense - buying concert tickets is worse, booking fee, C/C fee, answering the bloody phone fee ;)
  15. DJT75

    DJT75 Active Member

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    You're always covered, doesn't matter if you've paid it off or not. Any purchase you make on a CC is actually a contract between the CC company & the vendor - so it's actually the CC company buying it on your behalf.

    I use a CC for everything online always - just far safer - I would much rather someone got hold of someone elses money (the CC company's) than mine.

    I now also buy pretty much everything on CC & move the exact same amount of money from my current account to an e-account online - earning 5% interest until the CC bill turns up & I always pay it off in full before the date it's due. It avoids scams, earns interest on my current account money & rewards me with BA & Virgin miles.

    If you pay off the £200 you mention above when the bill arrives, you'll never pay a single penny in charges. It's basically a free 15-30 day loan.

    CC companies hate people like me as they never make a penny out of me, however there's millions of people they do make out of when they don't pay what they owe off in full every month.
  16. DJT75

    DJT75 Active Member

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    Yes, C/C per person, as if the £3000 wasn't already enough for 8 cheap flights on the day of release. Budget airline my arse..
  17. figoagogo

    figoagogo Active Member

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    SCAM - these budget airlines are clawing it back any way they can... still if they are cheaper it perhaps still worth it.
  18. KoThreads

    KoThreads Active Member

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    I pay for everything i can via CC, but as said more than you realise now charge for this. Orange for Mobile/home phone/broadband and Scottish Power being two i've used recently (or i've only just noticed) I don't think it will be long before everyone charges.

    When was the last time anyone gave a 2.5% discount for cash?

    Don't the banks charge companies for debit card transactions?
  19. krish

    krish Well-Known Member

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    I also posted at the XL thread that Visa debit card holders can claim chargebacks if they've been charged by a merchant who has gone bust without delivering the goods

    Anyway, I never ever use a debit card these days, apart from when paying off CC bills online ... I feel more secure using a CC, and its more convenient

    If fraud occurs, then your current account is compromised with a DC and it may take a while before the matter is resolved, at least with a CC if that happens your bank balance is fine .... and the issuer suspends the allegedly fraudulent transaction(s) until they've accepted they are indeed fraudulent
  20. $lim$hady

    $lim$hady Member

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    THANKS ALL, YOU GUYS ARE FANTASTIC!!!!!!

    I will at MSE and bits and bobs and get a CC, i am a fairly simple guy and manage money fairly well so could do with security and would pay on time so "not paying a penny" sounds GOOD!

    Thanks guys.

    Bloody XL, i bet the boss will get a bonus from somewhere.
  21. figoagogo

    figoagogo Active Member

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    Get a C/C that allows you to pay be Direct Debit. Save the hassle.
  22. $lim$hady

    $lim$hady Member

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    WooooW it was let loose in the credit world...
    I just did some googleing on credit cards and saw so many types and offering things and figures i didn't understand, just so i stay on the right path, can someone send me links on the type or card i should be looking at:

    My card usage/situation:
    I will pay off on time every month by Direct debit.
    probably spend £600 a month
    It will be joint account or card
    could do with cash back
    Nothing flashy

    Any suggestions.
  23. Phil57

    Phil57 Active Member

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    I am sure what are meaning to say is the retailer and the CC company are equally liable
  24. Phil57

    Phil57 Active Member

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    I do recall in the past that if you purchased an item say for £1000, if you paid say £100 using the credit card and paid the remainder using another method, the credit card company would still be liable for the whole amount.

    Please correct me if I am wrong.

    That said, I would never purchase an item-service costing more than £100 using a payment method other than a credit card or a visa debit card.
  25. wormvortex

    wormvortex Active Member

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    If your going to pay it off each month look for one the rewards you with cash back or money of places. Also the APR rate won't be overly important as you won't be paying interest.
  26. KoThreads

    KoThreads Active Member

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    An EGG cards ok if they let you have it. All online, cashback, be lost without mine.
  27. figoagogo

    figoagogo Active Member

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    EGG! Thats my choice...
  28. figoagogo

    figoagogo Active Member

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    yes !
    • Thanks Thanks x 1
  29. $lim$hady

    $lim$hady Member

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    Ok Peps,

    I have got myself a Egg Money credit card.... should get it in a week or so, just wanted to check it was the right thing to do...

    I have set up DD and so it will just pay off in full the credit card end of the month..?
    I should be charged no interest what so ever?

    There charge me to withdraw money, is that usual?
    and finally how do i check if companies charge me to use the CC?

    Any tips for a new CC owner.....:rotfl:


    Ahh forgot to say, i oftern get cashback from say Tesco.. can i do the same with a CC? and is there any charge for that?

    Spend Spend Spend $$$$$$$$ wisley.:devil:
    Last edited: Sep 16, 2008
  30. mentalpen

    mentalpen Member

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    If you have set up a direct debit to pay it of in full every month you won't pay any interest.

    One thing i wouldn't do is withdraw money on it from ATM as i it will cost alot on interest. I would check the terms and conditions to see how much it is
    Last edited: Sep 17, 2008

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