Teach me about credit cards

How do they really work? I know that you get a limit. Lets say $2000. If I only spend $450, do I have to pay back that $450 in the next month to beat the interest, or only when I reach the $2000 limit?

What is an APR?

How does the interest work? If you pay the balance before the end of the month, you don't pay interest?

How can you make it work so that you don't end up in debt?

What are rewards cards like? Are banks better or other credit card providers?

I have no idea! I am thinking of getting a card, as there are things we are thinking of getting pretty soon, but don't have the money yet. We can save but one of the items is needed pretty darn soon.

With our credit card we have 50 or 60 or something like that interest free days on purchases and if we don't pay the balance of the purchase in that time we get charged with interest.

Most store cards have interest rates close to and some OVER 20% :o A lot of banks offer interest as low as 9-10%. It's worth shopping around, as some have interest free days, other have low or no account keeping fees, others offer rewards but no interest free days, some have low rates on cash advances, and some are low interest and etc etc (rarely do you get a card with the lot!!!).

Personally the best for us that I found was the NAB Low Rate card, as it offered 6 months interest free on balance transfers (and we used to have a Coles Group Sourcecard that was slogging us 21%pa!!!).


Oh, and APR is the annual percent rate I think? I'm pretty sure its just a way of describing the interest rate on a card.

Credit is exactly that. It is like a short term loan from the bank that is pre-approved.

The interest is the way they ensure that they are not out of pocket if you don't pay them back.

I'd go a bank credit card, Leasha is right the store cards can be huge and the interst often starts from the time of purchase.

Have a look at the annual fee for the card, Many of the reward cards have a fee of up to about $300-$400 a year.
(That said I have a Westpac Altitude card and I use my reward points to pay the fee $300 each year)

To make it work. Never accept the upgrade of credit limit the banks will send, if you need more credit consider it then call the bank. ALWAYS pay the card off in full when you recieve the statement.

If under any circumstances you start to spend beyond your means cut up the card on the spot.

If you stick to this, the convienience of credit will work for you.


Hope this helps.

Yes, I agree with Mel, it helps to look at it like its a loan. You don't spend as much if you think "do I really need to get a loan in order to buy these jeans? Or can they wait until I can actually pay for them?" ;) But we have recently needed to buy a washing machine on extremely short notice as ours just died unexpectantly and are grateful to have the credit card for that! But we don't use it for anything below $500 unless its an absolute emergency.

I aggree with Leasha (So much agreeing here)That is a great way to start.

I use mine for everything. This leaves my pay sitting against my home loan for as long as possible. I have a budget and I don't buy anything that is outside of that unless i've discussed it with my DH first and visa versa for him. That way we know exactly how much out credit card will be each month, and we know we can pay it off as it is all food and bills.

I found this website that compares the rates of credit cards. The one with the lowest interest rate was Aussie. Would that be a good thing? They aren't a bank as such.

If I were to apply for a card, would they send me one? Or would I be approved and then have to fill out more forms to get the card? I want to know if we qualify for a card or not. We are low income earners, we live comfortably with no current debt. DF is very hesitant, but he is the one who wants things we currently can't afford, and he is a terrible saver. I am trying hard to save but he's making it difficult. With a CC, perhaps we can get the things we need and pay bills more easily, and just keep paying back the CC to keep on top of the balance.

With interest free periods on purchases, is there say 50 days for each purchase? So if I bought a computer on the 12th of the month, and a freezer on the 20th, would the interest free period start from the first purchase?

Thanks for your help so far, this whole lot is so confusing!

Ausie is pretty good, YOu may need to have an account with them to get the cardnot shure.

The Interest free period starts from the day of purchase (for most cards.) Be really careful with paying each of on the 50 day mark. You can't tell the bank which purchase your paying off, so they will probably still charge you interest if you don't pay off the full amount on your statement regardless of when the last purchase was. Also the CC is in one persons name, that person is fully responsible for the card. If DF is a bad saver then don't give him a card.

So could I get a card when I only get Centrelink payments? DF could co-sign. I've heard you can get cards in two people's name, in a relationship?

Thanks for telling me of interest free periods. It does make sense that they would not know which purchase you are paying off, so best to go from the first one, until balance is back to 0 (nothing owing) and then a new interest free period starts from next purchase?

How do they really work? I know that you get a limit. Lets say $2000. If I only spend $450, do I have to pay back that $450 in the next month to beat the interest, or only when I reach the $2000 limit?
Yes, you have to pay back the total value owed each month or you get charged interest.

What is an APR?
Annual percentage rate - the higher this figure, the more interest you potentially pay on your purchases.

How does the interest work? If you pay the balance before the end of the month, you don't pay interest?
Most providers give you a statement, a total to pay, a minimum payment, and a date to make payment. If you pay off in full by the due date, no interest. Make less than the full amount but more than the minimum payment and you are charged interest - check your provider as some charge interest on the remaining balance but most on the full balance. The due date is usually towards the end of the month but could be the start of the month or the middle... check the provider.

How can you make it work so that you don't end up in debt?
Only spend on the card what you have in the bank already and ALWAYS pay off in full.

What are rewards cards like? Are banks better or other credit card providers?
Depends what you want. I have a card with low APR (very low - 7.9%) and 1% cashback. This is because we only pay off the full amount 90% of the time so low interest is important and 1% of all monies back every year is a nice little bonus! An extra 75 quid or so doesn't go amiss. I also get instant cashback deals which change every now and then, so using one particular chain of petrol stations means I get 3p a litre straight back credited to my card every time I buy petrol there! Some people prefer air-miles or vouchers for a high-street store, check what you want first. I'd always say cashback and a low APR but you may not.

If I were to apply for a card, would they send me one? Or would I be approved and then have to fill out more forms to get the card?
You have to be approved first: I tend to apply on-line to avoid waiting and delays. It's a very simple form about income only.

With interest free periods on purchases, is there say 50 days for each purchase? So if I bought a computer on the 12th of the month, and a freezer on the 20th, would the interest free period start from the first purchase?
It's a potential interest free period: basically your statement starts on the 1st of the month and payment is due on the 25th of the next month (for example). So if you buy something on the first of the month, you pay no interest until the 25th of the next month (up to 56 days interest free in a 31-day month). If you pay in full, no interest. If you pay part of the balance, interest is charged. If you buy something on the 11th, you have only 46 days interest free. Watch out for the sneaky "up to" statements! Pay off the balance in full every month.


So could I get a card when I only get Centrelink payments? DF could co-sign. I've heard you can get cards in two people's name, in a relationship?
Depends on the creditor if they'll give you a card or not, you may need to apply to a few different places. Each application gives you a credit score though - a high score means you'll find it harder to get credit. Find out first if the creditor will give a card to a centrelink payment person before you apply. You can get cards based on a couple, we've been offered them before, but usually it's one person is the main person and responsible and the other just has access to the credit. Not good if your DF is impulsive and not good at saving. You can maybe get two cards as a couple but keep DF's in the freezer trapped in a litre of water's worth of ice - by the time it has thawed out of a block of ice he may not want to make the purchase any more! I've heard that works sometimes for impulse buyers.

HTH!

Thanks RF! I'll see how I go about getting approved first. I know that I shouldn't get a card and use credit if I don't have the money, but if I had the money I'd buy it anyway, without credit. But we have things we'd like now, and if I find a low interest card, I could handle the interest payments. I guess I'll just pay it back as fast as I can, and keep it in a place not easily accessible.

Our C/C is in the freezer!!! LOL!

Well if I plan things ok, we have a wedding early next year (I hope) and a baby after that (I hope). So a credit card will help me get things over time, and I will put every spare penny into paying it back. And once a new baby arrives, all of those maternity payments will pay the last bits off. There isn't much new stuff we'd need for a new baby. A car seat, a bassinette, clothes, nappies (sposies until bub fits into my current clothies). I got all of my DD's things very cheaply, I can do the same again. So I'll keep the CC on ice or I'll leave it with FIL for safe keeping.

I am trying hard to save but its not going well, I really think getting a CC would enable me to get the items I need and then I can focus on paying it off.

Am I being stupid, or do you think I could manage well?

Honestly, we're crap at saving too, so when we bought our fridge interest free on a c/c - it was like forced savings. But you have to stick to your plan, the second you treat it as if its money to spend another day, is when things go downhill.

Honestly, i wouldn't recommend it. If you're going to give it to FIL to look after, why not give FIL $100 every week or fortnight and he can save it for you? It's hard to save, we struggle too, but so worth it if you can make it work.

I've had a CC for 10 years now and i still have a ?0 balance every month. I've paid interest once, when mum was dying and i had to buy 2 open-end train tickets on 20mins notice, and could only afford to pay half off when the bill came in because it happened to be 3-days before the end of the balance "month" when i bought them - i think i paid about 14GBP in interest that time. The rest of the time i have always paid it off immediately - i am so organised!

I got it because i was going abroad backpacking and it was still hard to use debit and UK bank cards abroad in those days, so i got a Visa and transferred 600GBP onto it BEFORE i went away, so i could spend 600 before i was borrowing anything. In the event i think i had 50 left on it when i got home, so i didn't actually "use" the credit, just the mechanism. The only regular purchase i've ever made was Broadband, right after i moved when i was on welfare and couldn't use direct debit to pay (because every company in the UK does it's direct debits monthly, but the UK government pay their benefits 4-weekly, so you can never use the direct debit payments and are effectively charged, since you don't get the DD discounts, for being poor - RANT!) and i knew i could always definitely pay by the end of the month. Again, i never paid a penny of interest.

When DP and i moved in together recently we used his CC to buy our suite - 1500, and again, paid immediately. We used the CC because so many companies are going bust just now and his CC guaruntees our money back if the firm goes under before the goods arrive...

It is VERY VERY easy to get into a mess with a CC. If you're not good at saving it might be better to be realistic and sort that out than get a credit card. Even very cheap purchases at the time can spiral once interest begins to be calculated. I have a friend who was known in uni as a bargain queen but used a CC. I can remember once she was boasting that she'd bought a pair of jeans in a sale, 23GBP down from 75GBP. But later on when she saw a financial advisor about her debts he calculated how long it'd taken her to pay off the jeans then worked out and added the interest and those 23 quid jeans actually COST her 191 pounds! So bear that in mind - if you want a $800 washing machine, do you want to pay $1200 for it because you couldn't keep on top of the interest? Or would you rather save up and get the $1200 machine in the first place?

Credit cards can be very useful, but they are an incredibly short term solution to the problem. Learning to budget and save well will mean you'll almost never need that short-term solution anyway.

Bx

I agree with Bx. CC's are very useful if you can budget and are great to have around in case of emergencies but as an alterative to saving they are deadly.
Saving is a fantatsic life skill that will serve you well if you can get on top of it.

I'll talk to DF about saving again. I am trying my best but because I pay the rent and a few other things and his bills are food, electricity, water (waiting for that one to arrive), internet and phone, they are all monthly or quarterly, except for food. Mine is weekly and fortnightly, and its hard to keep up when he's not giving me enough money. I think I currently have about $50 in the bank and I don't get paid centrelink for another week. I'm not going to get a CC until I am able to pay it back. I will talk to DF and hope that he sees where I am coming from.

Thanks for all of your help.

If you are good at paying off the card each month you might like to get a rewards card, these cards generally have a 55 day intrest free period and you get reward points for spending, they also have a HIGH intrest rate, so if you don't pay it off every months you will pay a large amount of interest.

If you are not able to pay off the card every month, you should go for a LOW interest rate card, you won't get reward point and there is no intrest free periods, but s long as you are generally paying off more than you spend, you will be paying the minimal amount of interest.

With my CC we have 55 days interest free to put back what we have spent.

u just have to do ur homework and make sure u get one that is right for u

You have to be careful! Some cards that offer a interest free period have a quite high interest rate if you don't pay it off in FULL.
If you know your not going to pay the full amount its better to opt for a card that has no interest free days but a low everyday interest rate.
Look at the annual card fee, over limit fee & late payment fee.
You can get cards that have a low limit of $500 in case of emergencies aswell if you wanted one for that reason. then you can always up the limit instead of starting out with this huge limit.
A good website to compare financial products is ratecity.com.au there you can compare all products and they give a star rating out of 5.

I talked to DF and he said that we can get one. But the first time we aren't able to make minimum payments, he's cutting it up. No matter who it was who caused it to be unaffordable. I tried applying for just me (and a secondary card for him) and I was declined. We'll try again in DF's name, with me getting a secondary card. Plan C is for it in FIL's name and one of us getting the secondary card, but we are responsible for the bill. Hoping that we can get one in DF's name.

Going to get a limit of $500-$1000 only. That's enough to get us things we need. We moved into our place less than 3 months ago, and are still setting up.

Echidna please bear in mind that depending on your APR it is perfectly possible to pay the minimum amount FOREVER and NEVER pay back all you owe. If you cannot afford to clear the full amount, including interest accrued, within the time it would have taken you to save for the item, then you will be getting into financial hot water right away.

My APR is 16.9% and my minumum payment is 2.5% or 5GBP, whichever is more at the time of the issuing of the statement. I have a maximum 56 day period of onterest free (that's the day after a bill is issued until the day payment for the next billing period is due).

(Using a $ now because the GBP comes out as a question mark, and rounding up and down so i might be out by a cent or two here...)

Month 1: I have borrowed $500, and i pay my minimum payment which is $12.50.

Month 2: My statement would be $500-$12.50+interest (my APR works out as 1.31% monthly) which is $493.88. My minimum payment would then be $12.35.

Month 3: Once i paid that i would owe $493.88-$12.35+interest, which is $487.83. My minimum payment is $12.19.

Month 4: My statement is $487.83-$12.19+interest which is $481.36. My minimum payment is $12.03.

Month 5: My statement is $481.36-$12.03+interest which is $475.48. My minimum payment is $11.88.

Month 6: My statement is $475.48-$11.88+interest which is $467.67. My minimum payment is $11.74.

Once i pay that $11.74 my new balance will be $461.90.

So after 6 months paying the minimum payment i have paid $72.69, but i've only actually reduced the original debt of $500 by $38.10. Meaning i have paid almost as much, $34.59, JUST to have the item 6 months ago, an item i have not yet paid 10% of the cost of.

Only paying the minimum payment it would approximately (can't be bothered going through every single sum...) 80 months to repay $500 and in that time you'd pay about $325 just in interest. Is your $500 item worth $825 and 6 and a half years of debt?

Paying back $1000 in the same way would take 12 years and cost about $980 in interest.

If you plan to get a card, it's best to figure out the REAL cost of the item you need, then work out how much it will cost to actually buy it on a CC using the above maths, taking into account how much your APR is, what the monthly rate translates to (the bank can usuallt tell you this) and how much you can really afford to pay back onto the card each month. The "minimum payment" is sold as a means of making debt affordable, but really it's just financial quicksand for the unwary. Every time you make the minimum payment while interest accrues the handcuffs the CC company has on you tighten.

I'm not saying don't do it, just think VERY carefully about it, PLAN what you will spend, PREDICT what you will actually have to pay and BUDGET to always pay the amount you have decided on to keep to that final amount. Calculate what it will cost BEFORE you spend any money and go into it with your eyes wide open. Best of luck.

Bx

ETA - how depressing. After all my number crunching with a mobile phone calcultor and writing all over the back of the gas bill envelope, here is a website which will do it for you - tell it how much you want to borrow, the interest rate of your card, how the minimum payment is calculated and how much you can afford to pay each month and it will tell you how long it's going to take you to pay and how much it will cost you in interest. It doesn't do partial rates (couldn't do my 16.9%, only 16% or 17%) so round UP to make sure you don't underestimate.

Actually, on the card I just got rid of...

I owe $500
Minimum payment is $20
Interest is $25

OUCH! So by paying the minimum only I owe $5 more a month! (That's an example, it wasn't those figures but you get the idea.)

I treat saving as a bill. I pay my savings account just as concienciously as I pay my CC account - and I borrow from the savings less on a day-to-day basis! I would seriously consider doing this rather than a CC if you know you're not going to be too great with it.

I also hide some money in another joint savings account. It's joint so DH can access it, but he forgets about it, so the money there is for the emergencies that we put on the CC last month!

I'd probably pay about $50 each week or fortnight, depending on the balance of my bank account after bills. That's just me, DF could pay the same too, if not more.

What do you think if we put all the bills onto the credit card to consolidate them, and just have the one thing to pay each week/fortnight/month?

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I'd probably pay about $50 each week or fortnight, depending on the balance of my bank account after bills. That's just me, DF could pay the same too, if not more.

What do you think if we put all the bills onto the credit card to consolidate them, and just have the one thing to pay each week/fortnight/month?

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DON'T DO IT! If you already owe on the bills then call the people you owe money to and work out a re-payment plan - as long as you are up front, contactable and open with them they will not charge you interest and you will be paying them back WHAT YOU OWE without the added interest a credit card will cost.

Prepare a spreadsheet which has all your incomings (all money earned or from c'link or wherever) and all your outgoings (rent, rates, food, clothing, living expenses, travel - include EVERYTHING) and see how much you actually HAVE that's available, then divide it into portions decided by the amounts you owe. So if you owe
rent: $300
electricity: $200
water: $100

you would use the $50 to pay $30 to rent, $20 to electric and $10 to water. Does that make sense? You would call them, explain your situation and your intentions and it is very unlikely they'll reject your offer since the bottom line is that however they get it, they want their money back. Debt only gets you into trouble when you ignore it.

If you don't owe money yet but want the simplicity of one amount going out for bills you need to look at all your bills, work out how much each one costs a month (bearing in mind that heating will cost in the winter and air con (if you have it) in the summer and so on, plus any other variables) and figure out how much each week you need to put away.

For example say your gas and electricity was $450 last quarter, divided by 12 that's $37.50, so you need to put $37.50 away every week. Put it all into a seperate account, one which you ONLY pay bills from.

We have 3 accounts. One is DP's current account. Into it comes his wages, the money for all our monthly bills (rent, council tax, phone/broadband/tv, his mobile phone, gym membership etc. etc.) stays in it. The money for our day to day living, for petrol and any spare money which isn't allocated yet goes into the joint current account, which is what we both "spend" out of - i also put the child benefit and anything i earn in there when it comes in. The money for our quarterly and annual costs (gas and electricity, tv licence, car service costs and tyres costs, car insurance etc.) plus a set amount of savings every month goes into a savings account. Once the savings account has 3 months worth of living expenses in it (enough to cover ALL of the above except the full amount of "spare money") we will begin to move the excess into a high interest savings account which we can't touch.

If you want to PM me your email addy i can email you an example of an excel sheet with a household budget on it which you can alter into your own figures.

Bx

Oh I have at least $50 to $100 left over each fortnight after paying all of the bills. DF can have the same, less or more, depending on whether he gets extra work and whether a big bill arrives. With the other bills, we are on time, and have no current debt at all.

What I am thinking, is if we pay all of the bigger bills on the credit card (electricity, water and phone), and can also can get the odd larger purchase, and pay all the regular bills from our bank accounts. So the rent, internet, health fund, pay TV (for the next few months then contract ends) are the same value each regular time to pay. Whereas the phone, electricity, water fluctuate and don't come on the same date each time. These are the bills we're not really able to predict. I'd pay with these with the credit card and as soon as we both get paid, we pay it right back.

Sometimes we have to pay a bill or make a purchase in between paydays.

I'll talk to FIL about it too, perhaps with the few bigger purchases he could buy, and I will set up a payment plan with my internet banking and pay him back asap.

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Oh I have at least $50 to $100 left over each fortnight after paying all of the bills. DF can have the same, less or more, depending on whether he gets extra work and whether a big bill arrives. With the other bills, we are on time, and have no current debt at all.

What I am thinking, is if we pay all of the bigger bills on the credit card (electricity, water and phone), and can also can get the odd larger purchase, and pay all the regular bills from our bank accounts. So the rent, internet, health fund, pay TV (for the next few months then contract ends) are the same value each regular time to pay. Whereas the phone, electricity, water fluctuate and don't come on the same date each time. These are the bills we're not really able to predict. I'd pay with these with the credit card and as soon as we both get paid, we pay it right back.

Sometimes we have to pay a bill or make a purchase in between paydays.

I'll talk to FIL about it too, perhaps with the few bigger purchases he could buy, and I will set up a payment plan with my internet banking and pay him back asap.

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I don't understand why the bills would come at different times? All companies have some patterns to their billing. They might bill after 4 weeks or every 90 days, rather than on the 3rd of each month or the 3rd of every third month, for example, or they might have a set credit limit, such as never letting you owe more than $100 in any billing period, but there WILL be a predictability to their nature, because they have to have a system to operate - an arbitrary or random billing period would be totally chaotic and make their internal financial systems a nightmare.

It is always hard to set up a budget system as i described because say you are saving for the electricity bill, you have to find the money to pay the current bill AS WELL as saving for the one after. However once you're saving ahead of time you never get caught out again, and if you put it on a credit card you haven't ACTUALLY paid it, you've just put it off.

You can predict your electricity bill amount by reading your meter every day, week or month (depending on how stable your use is) and using the info off the last bill (it will tell you how to turn the units on the bill into kiloWatt hours and how much those hours cost you in real terms, and how much VAT or other tax you might have to pay) work out the cost of the next bill. You can also use your readings to reduce your useage (and see how much it's reduced). Same with water if it's metered. With the phone we just keep track of our calls in the sense that we have free evening and weekend calls for the first hour, so we limit calls as much as possible to free times, time ourselves and after an hour hang up and redial.

Either way it is only going to cost MORE to pay bills with a credit card because you aren't actually paying them, you're just swapping the person you owe and not in a good way.

We save 170GBP/month for gas and electricity. In the winter the bill usually costs every penny of that, in the summer nothing like it - in the summer we have extra cash to spend or save. I would suggest you work out the maximum each bill will cost and save that much and treat anything you don't spend as a bonus. I used to always save 30GBP/month for my phone and it was NEVER more than 60GBP/quarter but it was very handy having the extra cash the day after i'd paid the bill every quarter, like a great prize for being sensible :)

If FIL has money you would be far better to borrow from him and work out a re-payment system and set up a standing order to do so than get a CC to do it. FIL will not charge you compound interest!

Bx

You can come to all sorts of agreements with the utilities people. Some of them will arrange small payments from your DSS payment so that you aren't hit with a big bill. I've seen other members here talking about schemes where they pay them a set amount weekly or fortnightly so that when bill time comes they just get a tiny bill or even a credit to the next bill.

ETA - like this one http://www.originenergy.com.au/2391/...u-to-pay-bills

Well the phone is monthly, but I don't know the exact date it will come out of direct debit, it could come on a low wage week or right after we pay bills. Same for the electricity and water, which are quarterly. We are waiting for the water bill, we don't even know when that is, we haven't gotten one since we moved in in November. With the electricity bill, we have peak, shoulder and off peak periods, all with different cost rates. So I can only work it out by the maximum, but its all so confusing.

Can you prepay a credit card? Like pay money to it when you aren't owing anything?

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Well the phone is monthly, but I don't know the exact date it will come out of direct debit, it could come on a low wage week or right after we pay bills. Same for the electricity and water, which are quarterly. We are waiting for the water bill, we don't even know when that is, we haven't gotten one since we moved in in November. With the electricity bill, we have peak, shoulder and off peak periods, all with different cost rates. So I can only work it out by the maximum, but its all so confusing.

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You will be able to work out the rates hun or else how could THEY work them out to bill you? I had economy 7 in my old place which means 7 hours at night have a different rate. Here the first 670 kWh of each quarter are 7.5pence each and all the rest are 3.5pence each. It IS confusing but it is totally doable and once you're on top of it you'll feel much better and more in control.

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Can you prepay a credit card? Like pay money to it when you aren't owing anything?

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You can yes, but they won't pay you ANY interest - you'd be far better putting the money into a savings account where it can accrue interest and having the direct debits going out of that.

Bx

Well I do know the electricity bill is coming sometime in March. I'll get DF to get the receipts/emails from the last bills, so I can add it to the calendar on the fridge where I work out the finances. I guess I got a bit slack in the last couple of weeks, probably since I went to the doctor and went on antidepressants. I'll get back into keeping track of things, but DF really needs to save or give me money and I can save.

WRT prepaying on a CC, it would be when I don't quite have enough money before the bill is due, and the owing part would be on the CC. Say the electricity is $300, and I have $170, we put $170 on the CC and pay the bill with the CC, of a $1000 limit we'd only be owing $130 plus interest.

I think I'll leave the credit card until later, and just preplan all the finances. DF thinks I stress about money too much. For good reason! He doesn't worry at all! And I keep telling him and trying to get him to know what is happening with our money.

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Well I do know the electricity bill is coming sometime in March. I'll get DF to get the receipts/emails from the last bills, so I can add it to the calendar on the fridge where I work out the finances. I guess I got a bit slack in the last couple of weeks, probably since I went to the doctor and went on antidepressants. I'll get back into keeping track of things, but DF really needs to save or give me money and I can save.

WRT prepaying on a CC, it would be when I don't quite have enough money before the bill is due, and the owing part would be on the CC. Say the electricity is $300, and I have $170, we put $170 on the CC and pay the bill with the CC, of a $1000 limit we'd only be owing $130 plus interest.

I think I'll leave the credit card until later, and just preplan all the finances. DF thinks I stress about money too much. For good reason! He doesn't worry at all! And I keep telling him and trying to get him to know what is happening with our money.

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As Dach said above, almost ALL companies will enter a re-payment or pre-payment agreement with those who are living on restricted means. It would be better to pay the electricity $170 and then agree with them the schedule on paying the further $130 because they WON'T charge you interest for that. You could even arrange to pay the set repayment amount EVERY week as Dach suggested, so that when the bill next comes it is already half or mainly paid.

As a general rule you NEVER accumulate debt to pay debts unless you are forced to. And when i say forced to i mean you will be homeless unless you pay a whack of rent right NOW. Utility companies only charge penalties when you don't tell them what you're doing (i.e. when you neither pay the bill nor tell them when and how you plan to). Overall it will be far cheaper to pay the electricity company what you owe than risk oweing it longer and accumulating more debt on a CC.

I'm sorry about the depression. I had depression for several years about a decade ago and i found that the 2 problems of 1) feeling so overwhelmed by simple or not-so-simple tasks that i ended up avoiding or ignoring them, and 2) feeling utterly out of control with everything, fed into one another so the more overwhelmed i felt the less i did and the less i did the more overwhelmed i felt. I think that whatever your DF thinks you are both wise and mature to be really thinking about your money situation. The difference between struggling and managing is just what you DO with your money. I have friends who don't manage their money and no matter how much they have it's not enough - they just manage it badly and never QUITE get on top of the things they need to pay.

Bx

I wouldn't get a credit card - they only mess up the budget and get you into more debt.

Most electricity providers allow you to make a fortnightly payment, so if your electricity bill is $300 a quarter, just divide it by the number of pays you get over a quarter ($50 a fortnight) - then you don't need to worry about paying those bills. I think you need to need to get a float up in the account to cover the full amount of the bill (depending when you start).Telstra used to do it, but I think you have to ask them about it.

Everytime I've got a credit card and bought things I thought I needed, its just turned out to be a nightmare trying to find the extra money to repay the debt. I would save money every time - although like folks have said if it is an emergency, they are handy in that respect.

The only way to be a saver is to save money and go without until you can afford it. It is surprising how little you 'really need' when you have to save up for it.

Some credit unions do christmas club accounts, where you can put in x amount a fortnight for a year (which might help you budget for your wedding). Of course you can access the money early, but it can help you save.

My experience with reward cards is that they are crap! You need to spend up big to get any 'rewards' and by the time you have done that, with the interest you could have just gone out to the shops and bought exactly what you wanted (rather than just got what brand the credit company had done a deal with).

Go for a no frills card if you need to, with the lowest annual cost, and then put it in a HUGE block of ice in the freezer and don't go near it! Why give some large company your hard earned cash, in the form of interest! Put it in your pocket!!

From the sounds of it, I'd say you're doing the right thing in not getting a card and saving instead. Some people can work CCs and others can't. Sometimes it's circumstances (as in your case, from what I understand) and sometimes it's people - DH can't work one well. Which is why I have one and keep it hidden from him.

The crux of the matter is, if you impulse buy and can't pay off every month then DON'T get a card. The few times I haven't been able to pay off my card is because DH found it and spent it! It's hidden and passworded even more now.

If you do daily shopping with a CC but pay it off in full every month and it helps your budget (ie I pay mine off when I get paid and so don't have to worry about a food budget - and earn interest on the savings and current account without having to transfer money out all the time) then get one. But if you want it for something big and pay it off later - tbh if you really can't save then a bank loan is better for you.

I'd say if you have the money to pay bills in the bank, then by all means pay them with a CC if it makes your life easier - but ALWAYS make sure you have the money in the bank before you put it on the CC! Then DON'T spend that earmarked money. I can do that - I earmark five hundred pounds a month for the CC and any extra I put in the savings. DH can't do that: he sees we have seven hundred in the bank and he spends seven hundred. Which is why I do the finances and he isn't allowed to check the balances any more, especially not just after payday but pre-direct debits!

Can you organise all the finances in your house? Even if it means only letting your DF having a set amount of cash a week and that's it rather than a card for a bit, it may be a good thing. Get on top of the finances and they run fairly smoothly.

Best of luck to you.

I have talked and talked and talked to DF and he just doesn't understand what the big deal is. I can budget much better if I pay all of the bills on the CC and just have that balance to pay back. It makes it easier, because everything comes at a different time. Rent is a Wednesday, health fund is every second Monday, my pay is every second Monday, DF gets paid Tuesday nights, engagement ring payment is the 10th of every month, electricity isn't for another 8 weeks, internet is around about the 14th of the month and phone is around about the 16th. Its all over the place, making finances so hard to keep on top of.

FIL said that he will loan us money when needed and we will pay him back. He proposed we set up a regular savings and also send him a small amount each pay to accumulate and we use that when we're desperate. But I tallied up all of our finances and it would be worse to do that, as we don't have much room to move. Having a credit card means we're able to use that money then and there if we're desperate, rather than waiting a few days for a bank transfer.

I emailed FIL about it all (talked to him this morning too) and I'm sure he will figure out what is best. DF and I both failed to qualify for a CC, but together our finances cover it. So FIL would get one in his name and I will get the secondary card to pay the bills. I am not treating it as free money though, as almost all of our wages would go onto the CC to balance out the bill payments. Currently, when we don't have enough finances to cover a direct debit, we get overdraft fees with our banks. That is much worse than paying interest on a credit card. Mine is $30 a day when I'm in the red. I have already paid three overdraft fees in the last few weeks, and its really upsetting me.