I agree with charging everything if you can manage your credit card bills.

I have a cash rewards visa card and I am using it to charge everything. The trick to that is the things I charge are things I have the money for. So my cable bill is budgeted for and I use the card to pay for it,then immediately send the payment to the card.

That way I do not carry a balance on the card, and I get the cash rewards.

You have to be disciplined and on top of your finances to make this work...but it CAN be done.

what percentage do credit cards charge retailers for processing payments? if charitable donationd are paid by credit card does the charity receive the full amount? and is the payment done in this way accepted for tax allowances by the irs?.

I do all my shopping and one off payments with visa and pay off full amount every month, I have been doing this since seventies.
However, I do not like to pay direct debit with card, because it is too dificult to cancel when you want to.

This absolutely, only, ever is a good idea if the FULL balance is paid off EVERY month, without exception!

And yes, with that proviso, it's a great idea.

I'm surprised you didn't mention Cashback cards. Not everyone is a frequent flyer, but we can all spend cashback. I think the best one is Egg Money, or Amex Platinum is better if you don't mind using American Express.

--Redmond; it varies depending on the card provider. With some it's a flat fee (around 50p), with others it's a small percentage (incl Amex which is why some retailers don't take it). I don't know about the tax and the charity questions sorry.

I don't understand the comment regards 'building up a great credit rating'. Spending £1000's of pounds on a credit card is not going to boost your credit rating. It only helps your credit rating if you pay it on time each month not how much you spend on it. Maybe if you go to the card issuer to get a loan it may help but if you always pay the balance off each month I don't suppose the would be too interested in you!!

very useful guys...and what credit card offers the best cash back reward?
Dan

Leeds & Holbeck Mastercard administered by goldfish also gives cash back.

Some years ago, I went through heaven knows how much bother to set up a direct debit to my credit card provider which would automatically pay off my full balance each month. Needless to say the provider didn't want to do it but they saw it my way when they received back my cut up credit card when I lost patience. My problem then was that because I was working away form home all week I couldn't pay on time. After the initial fuss, this system has worked well for me and I think I'll pay more items by credit card having read this report.

I live and work in the Cayman Islands. The CI$ has a fixed exchange rate with the US$. I use a UK credit card to purchase everything here - and I mean everything. That way GBP1 is worth US$2.04 to me, at a fixed rate of 0.82CI$. (work that out if you can)! Means I cash in and spend less on my purchases, and with paying it off each and every month which I have religiously done for the last 25 months, I only pay 54p a month in credit charges - yes, 54p! Meanwhile, my wages earn a whopping 11.54% from my savings account in Jamaica. Now, what could be better than that!

However, making payments by cash means that it is far less easier for your movements to be tracked than when you use a credit card.

I look on it as a means of maintaining my spending and locational privacy from my bank/credit card provider. Don't get me wrong; I usually make large purchases on my credit or debit cards. However, for everyday expenses, I prefer the spending annonymity afforded to me by cash.

Believe me, although it's not yet happened, all that information could be available to the highest bidder one day, and is already potentially available to the Government now. I don't see my personal spending being anybody's business but my own.

It's no big drama to vist an ATM at the end of the day.

The other major benefit from paying by credit card is that the card provider is in the contractual loop and in the event of anything going wrong you have recourse to them for repayment in addition to your rights to claim back from the seller. The same doesn't apply to debit cards.

You are taking the ultimate P***. What a load of hogwash and irresponsible twaddle. There should be some sort of penalty for writing the most amount of crap you've just written. I feel sorry for the thick people who will act on what you've written.

It's a real shame because you normally have some great articles. Oh well.

p.s please don't send me the Money Hospital newsletter ever again.

I do not understand Ann Powell. This is classic criticism without justification, otherwise known as prejudice. What precisely in the article is hogwash and twaddle and why?

I use my card for every purchase possible. Especially for high value transactions, over £100, the card provider is jointly liable,
I never buy what I cannot afford and pay the balance by direct debit, thus I get up to 56 days interest free credit but never pay any interest.

The icing on the cake is that, at 3% reward, bonuses and special offers, (this was 5% until 2004), I have received nearly £10,000 from the card provider over the last 12 years for simply buying essential goods and services.

I do not think credit ratings are likely to be enhanced at all. My husband and I have paid off our credit card balances at the end of each month for very many years. However on applying for an American Express Card we were turned down because our credit rating was not good enough - even though we have no debts at all and never have had, except for a mortgage, now paid off.

Ann

You did read the note at the bottom of the article didn't you?

Oh , clearly you didn't...

Can you pay your mortgage using your credit card

June -- it might be some other factor too; I've been declined for some things for mystery reasons, whilst being offered £9,000 credit elsewhere. I think all lenders have different qualifying levels for different products. One year my strong credit record vanished simply because of moving house, with no other change whatsoever.

It's a funny old world, credit ratings. But having a strong on-time repayment record definitely is a helping factor. Take a look at your Experian / Equifax report; it's the main thing a potential lender will see.

Ann -- I too don't really understand what's upset you. I don't think the article is suggesting you borrow money on credit cards; merely to put everyday spending through that account rather than your current account.

Interesting read and some of it makes a lot of sense, I will try that for a 3 months time and see if I have the same control over my finances like now. Will post the results for it here as well.
Fred

I fully understand the position of Ann Powell.

She must be working in a Senior position for the Credit Card Company.

If everyone follows these advise, she will have a small bonus this year.

Ha ha ha . LOL........

Thank you, very helpful information and blog was insightful.

Wow Ann that was really harsh. Money Hospital was not saying that people should go out and spend recklessly. The tips here are saying that if you have the money to pay off the purchases then it is a wise idea to use the card.

Money Hospital advocates being responsible with your credit cards, not just going out and swiping for fun. If you pay off your balance in full and act maturely with the card then there are many benefits to gain.

I have one card that I am using for everything. I pay my internet bill and then I have Electric Orange send the amount of the bill over to my credit card. This money is budgeted for and I gain the points from using the card.

I have a budget of $100 for groceries and that is sent off monthly to the card as well. When I shop I carefully track my purchases just as if I were going to write a check and could not go over $100 for my groceries. It takes discipline and that is what Money Hospital was talking about.

Money Hospital....I'll take the newsletter that Ann does not want.

I love your blog.

I really think that the article was very useful and so are all you guys comments. I'm not very good with repayments, but it's true all you need it's discipline.
I think I will be more careful from now on and I'm going to pay off my credit card and start using it instead of my debit card!

Surely everything in todays world is about being aware and budgeting? It's so easy to be caught up in the new sky high credit limit/interest free hype that the basic fundamental logic, is that you just need to be aware. (Aware of the date that inerest free credit ends, shopping for the best card, budgeting and spending to what you can afford etc).
I got caught up in the credit card cycle of debt when I left University, was young needed cash/credit in order to survive. I had no idea at the time you could shop around for different types as generally only the higher charging credit card companies usd to come to our uni. They give you the chat but gloss over the fact that what feels like the day you graduate the interest rockets! You then get caught in the paying Peter to pay Paul!
Any thing that makes people aware and educates them is beneficial in my book.