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Is it necessary to have a credit card??

Discussion in 'Property Finance' started by househuntn, 6th May, 2016.

  1. househuntn

    househuntn Well-Known Member

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    There's always talk of credit card debts, credit histories etc, and financial providers looking up people's credit history before lending them money. I've never seen the point of a credit card and always use a debit card.

    Obviously it's good to have a good credit history, but because I don't have a CC I don't have a history. I've been told it won't affect my home loan application, but is it a good idea for the future to use a credit card to build up history?

    I did get a no fee card last year but have never used it.
     
  2. marty998

    marty998 Well-Known Member

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    This is not the US...

    You don't need to build credit as such...
     
  3. MTR

    MTR Well-Known Member Premium Member

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    but hire car companies will only accept credit card, they won't accept cash. We learnt the hard way with this, I think it's about accessing funds if something goes wrong.
     
  4. wylie

    wylie Moderator Staff Member

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    It isn't necessary I guess, but if you are spending (and don't fall into the trap of making it too easy to spend even more than you would without one), then it can have benefits if you go with a card that gives points.

    We paid for $2,500 worth of travel using our points recently. You have to be disciplined and not spend, spend, spend on things you wouldn't normally buy.
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    A credit card (IMO) is best used for accumulating points while your savings sits in the offset. You then clear the credit card debt each month before interest kicks in.

    It doesn't help a great deal when applying for a home loan (it may help slightly with credit scoring if you've shown good conduct - and certain banks consider credit card holders to be existing clients so offer higher LVR loans - ANZ for instance)

    Cheers

    Jamie
     
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  6. Mumbai

    Mumbai Well-Known Member

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    They accept debit cards though.
     
  7. Ezzo

    Ezzo Active Member

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    I always thought the deal was if there was some unauthorised activity on your credit card, it is the banks problem and they take care of it.
    If it is on your debit card, too bad. You are out of luck.

    Always made me avoid debit cards.
     
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  8. househuntn

    househuntn Well-Known Member

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    I paid for hire car with debit card but there may have been a condition which I can't remember now...an extra bond or something
     
  9. Hodor

    Hodor Well-Known Member

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    As mentioned the existing customer thing can be handy.

    Also if you have gold or platinum they give travel insurance if you purchase the holiday with the card. Haven't read the PDS on the insurance...
     
  10. pinkboy

    pinkboy Well-Known Member Premium Member

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    How do you brag to all your friends your credit limit if you dont have a credit card?:D

    pinkboy
     
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  11. MTR

    MTR Well-Known Member Premium Member

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    who needs a credit card when you can show them the size of your wallet..LOL

    Seriously though, Hertz Hire would not take a debit card, I think it had something to do with the bond......and the credit card was overdrawn..... oops
     
  12. albanga

    albanga Well-Known Member

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    Just be sure to triple check when closing one. Walked into ANZ a month ago to close my platinum card after refinancing my loan. All sorted in branch and I went on my way.

    A month later I get a text saying card is overdrawn, yesterday I go in to close out my normal ANZ accounts and they said what about this overdrawn credit card. They couldn't even sort it in branch! Gave me a number to call, 4 transfers later they tell me it had pending charges and then because I didn't pay them they charged me.
    Safe to say I demanded it be removed which they did oblige but point being that could have gotten nasty if I just left that going.
     
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  13. MTR

    MTR Well-Known Member Premium Member

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    Don't you love credit cards, I know a couple of property investors who used their credit cards for deposits on units in Sydney, worked out very well, they were cash straped at the time. Those credit cards come in handy:)
     
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  14. MTR

    MTR Well-Known Member Premium Member

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    Touche, I love your avatar.... LOL.....copying is the highest form of flattery... :)

    How am I going to beat that one, let me think;)
     
    Last edited: 7th May, 2016
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  15. Marg4000

    Marg4000 Well-Known Member

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    Hire car companies we have used insist on credit card, debit card refused as they said they cannot pre-authorise the excess on debit cards.

    Cruise ship insisted on credit card or hefty cash bond.
    Marg
     
  16. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Credit cards have built in insurance that protects you, debits cards generally don't.

    As a general observation, you don't need to have a large limit on your credit card for it to be useful. Credit cards can be in surplus, so you can throw $5,000 on a $1,000 card if you're making a large purchase.
     
  17. Elives

    Elives Well-Known Member

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    random question. i went out last night and i was using my amex for the first time, every bar i went to the bartender said they accepted amex. but had me thinking maybe they were just charging me extra for using it and not telling me? / they didn't know / care. reason being amex is generally for bigger retailers?

    question being how would you know if you got charged extra for amex is it just added to the bill or can you see it on the receipt?
     
  18. MTR

    MTR Well-Known Member Premium Member

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    Generally there is signage stating extra fees will be incurred if using AMEX
     
  19. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    I have a 4k limit on my credit card and only use it for day to day living expenses. Like Jamie/Peter said, better off with money in offset and interest free, and just pay some $ onto it if needed for more than available limit
     
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  20. citystar

    citystar Well-Known Member

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    Having a credit card isn't necessary however it's nice to use the banks money for the 55 or so days interest free while your money sits in the offset account. On the condition each month the balance is paid out in full.