Any benefit to use a credit card for living?

Discussion in 'Money Management & Banking' started by lazyhorse, 11th May, 2020.

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  1. lazyhorse

    lazyhorse Active Member

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    Hi All,

    Just wondering if there are any Pros' or Con's to paying for living expense from a credit card and paying the credit card with the offset linked to the PPOR?
    I have heard that it can save you on interest? but wouldn't it just be for the first 55 days? or whatever the interest free period on the card is?
    I fear that I may not be as disciplined with a credit card.
    Who on here takes this approach, and what has been the experience?

    TIA
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    saves interest, which compounds, and points.

    Interest is calculated daily so you save interest on interest. If you spend a consistent ant $2000 per month and your rate is 4% that is $80 savings, at least per year.
     
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  3. 2FAST4U

    2FAST4U Well-Known Member

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    I've never owned a credit card in my life. Debit card does everything I need.
     
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  4. Niche

    Niche Well-Known Member

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    I use credit card for all my set costs that I won't accidentally overspend on for exact reason that Terry mentions. The money stays in my account for an extra 30 days plus though points may not add up to much it is still a nice little bonus
     
  5. wylie

    wylie Moderator Staff Member

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    We put most things on our card to get the points. We've cashed the points in for many different things over the years. I don't pay the surcharge if there is one (unless it is very low) and I've also swapped the points for cash back which comes off the monthly balance.

    And you do have to be disciplined.
     
  6. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member Business Member

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    You're less likely to catch a virus from handling a credit card than you are from handling cash.
     
  7. The Y-man

    The Y-man Moderator Staff Member

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    You can't buy petrol with cash around our area.

    The Y-man
     
  8. datto

    datto Well-Known Member

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    I put everything on the visa card. All IP outgoings (except for strata levies), maccas, kfc, massages etc

    Recently I earned enough points for $200 worth of fuel for the commodore. Lasted about week and a half.
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    In some places you cannot use a debit card. Once in Japan I only had a debit card and wanted to rent a mobile wifi, but they couldn't let me as they needed to charge the card with a suspended payment or something and it wouldn't work with a debit card. Similar with renting cars etc
     
  10. The Y-man

    The Y-man Moderator Staff Member

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    I was about to ask "whose?" :eek::eek::eek::D:D:D:D

    The Y-man
     
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  11. The Y-man

    The Y-man Moderator Staff Member

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    Same with checking in at a hotel in many places like Indonesia.

    The Y-man
     
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  12. Biggbird

    Biggbird Well-Known Member

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    Yep, if you know you are good with not overspending and good at paying it off regularly, why not benefit from the interest savings in your offset and the points you can accrue?
     
  13. AndrewM

    AndrewM Active Member

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    Also can make it a lot easier to manage your budget and work out where you are spending.

    I pay all my fixed costs and bills etc through my transaction account then all my regular living expenses through my credit card which is paid in full automatically. Makes transactions easier to sort through in my main account and helps track spending without having to sort through my transaction history.
     
  14. jared7825

    jared7825 Well-Known Member

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    It works well providing you can control spending and pay off the card each month.
    I put aside a set average amount each month from pay check for the coming months credit card expense and pay for everything I can with it, pay it off as the bill is due to maximise the interest free period benifit

    I usually get credit cards that are offered sign on bonus for free first year, or very low first year rate with bonus Qantas FF points and save these to use for flights
     
  15. Mark F

    Mark F Well-Known Member

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    For me everything goes on the credit card and gets paid off every month. I have a no annual fees Mastercard and a Visa to keep the ff points rolling in. It also saves me excess transaction fees on my no no monthly account keeping fee Pensioner Security debit card account. There is also the issue with online shopping of having some redress with charge back when using a credit card if the transaction goes sour.
     
  16. albanga

    albanga Well-Known Member

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    +1 for everything on credit card and accrue points whilst saving interest with cash in the offset for longer.

    Only 2 weeks ago I remembered I had not cashed in points for a long time. Turns out I had $850 cash conversion! Used it to pay of the credit card. Wicked Cycle really.

    What I would say though is whilst the strategy in theory is great, you must ensure you pay off the CC or the cost of interest eliminates any savings quick smart.

    A couple of times in the past I simply forgot to transfer and copped massive interest. Luckily each time this happened (3 times in maybe 5 years) I called them and explained and they wiped the interest. The last time they said NO and I emailed them and say please cancel my CC. Funnily enough nek minute they refunded the interest.

    The other advice I would give us make sure the rewards program has a cash swap option. My previous card was QFF so whilst the conversion rate is better for flights, you end up using them to take an unnecessary holiday or upgrade you don’t really need and hence it actually ends up costing you money.
     
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