Do I need to have a credit card?

ATC110

I've recently been billed for the €30 credit card stamp duty, which has prompted me to question whether having a credit card is necessary again.

I make one or two purchases a month, which are paid off immediately.

To date, my rationale for having a credit card is for two reasons:

To maintain a credit record if I ever need to borrow money again (unlikely)
For a preauthorisation when hiring a car

I would cancel the credit card if the above reasons were unfounded.

I have EUR and GBP Visa Debit cards and a virtual Revolut card.

Can anyone advise on this?

antimatterx

I just have mine for access to credit in the event I need some money and don't want to withdraw from my savings.

I always clear it come pay day, and have never paid any interest on it.

kenmm

I think you have answered your own question:

How often do you hire cars?

Only you can answer that one!

Although, some companies will accept a debit card (enterprise did at least) - but you need to jump through some more hoops (payslips, larger deposit or something - anytime I heard another customer doing it, it sounded like hassle). Most of them will require a credit card, so even if you do find one or two companies in Ireland, your choice will always be limited, and even harder if not at home (if we ever travel again).


Other advantages of a credit card
- some more consumer protection on certain purchases (may or may not be relevant to you).
- fee free transactions (for me at least) - saves a couple of quid on the current account fees now that AIB have changed the limits.
- some tiny amount of cashback

These last two are almost negligible - I guess they cancel out the stamp duty fee.

ATC110

kenmm wrote: »

I think you have answered your own question:

Other advantages of a credit card
- some more consumer protection on certain purchases (may or may not be relevant to you).
- fee free transactions (for me at least) - saves a couple of quid on the current account fees now that AIB have changed the limits.
- some tiny amount of cashback

These last two are almost negligible - I guess they cancel out the stamp duty fee.

If you mean Section 75 protection , that's UK only.

Not sure what you men by fee-free transactions.

And AIB have no account fees if a balance of €2500 is maintained.

kenmm

ATC110 wrote: »

If you mean Section 75 protection , that's UK only.

Don't ireland have an equivalent? They normal do for most UK things.. Plus chargeback process is different (to debit cards) - I am sure someone can clarify

ATC110 wrote: »

Not sure what you men by fee-free transactions.

I mean the per transaction fee (which is normally levied on debit cards, albeit currently refunded if you maintain a balance).

ATC110 wrote: »

And AIB have no account fees if a balance of €2500 is maintained.

As far as I am aware, this is changing. Plus there is an introduction of a per tap charge on the horizon. It's implementation was delayed because it was bad press to do it during COVID.

ATC110

kenmm wrote: »

Don't ireland have an equivalent? They normal do for most UK things.. Plus chargeback process is different (to debit cards) - I am sure someone can clarify

Chargeback only in ROI, the same as a debit card.

http://www.moneyguideireland.com/protection-when-buying-with-debit-or-credit-cards.html

kenmm wrote: »

As far as I am aware, this is changing. Plus there is an introduction of a per tap charge on the horizon. It's implementation was delayed because it was bad press to do it during COVID.

I think the €2500 balance requirement might be lowered but thought the "per tap" charge had been abandoned?

ATC110

ATC110 wrote: »

I've recently been billed for the €30 credit card stamp duty, which has prompted me to question whether having a credit card is necessary again.

I make one or two purchases a month, which are paid off immediately.

To date, my rationale for having a credit card is for two reasons:

To maintain a credit record if I ever need to borrow money again (unlikely)
For a preauthorisation when hiring a car

I would cancel the credit card if the above reasons were unfounded.

I have EUR and GBP Visa Debit cards and a virtual Revolut card.

Can anyone advise on this?

1. Maintaining a credit record is not to be sneezed at and in future could be much more valuable than the 30 quid stamp duty.
2. Should the unforeseeable happens, easy access to credit. For example:

This time last year, almost to the day in fact, I was returning from holiday, landing in Amsterdam to fly home. Schipol Airport developed a technical fault, 700 flights got cancelled, every hotel from Amsterdam to Rotterdam was booked out and in the chaos KLM lost my luggage(It arrived 6 weeks later). I was stranded in Amsterdam for 3 days trying to get a flight home. My credit card was a god send as I had to eventually book a hotel, buy a change of clothes and eat things.

I get annoyed with the stamp duty too because ultimately the money that pays it comes from my already taxed income. However, it took me a while to get the credit card, and now I wouldn't be without it.

JeffKenna

Handy if you shop in surpervalu as they give 2 points per euro spent on your credit card. Wouldn't amount to the €30 fee but if you combine with the need for one if renting a car it probably makes sense to have it.

kenmm

ATC110 wrote: »

Chargeback only in ROI, the same as a debit card.

http://www.moneyguideireland.com/protection-when-buying-with-debit-or-credit-cards.html

- nice.

ATC110 wrote: »

I think the €2500 balance requirement might be lowered but thought the "per tap" charge had been abandoned?

Who knows - and who knows what future changes, but for 30 quid a year, I don't think its worth the hassle of cancelling and then when I hire cars have fewer options.

Plus maintaining a credit card for credit records, why not - it just makes life easier in the future if you need such a facility.

punisher5112

Get a revolut prepaid card.


Credit card are needed for van or car rentals and some other things but if you have the money then don't really need one.

ATC110

Deleted User wrote: »

1. Maintaining a credit record is not to be sneezed at and in future could be much more valuable than the 30 quid stamp duty.
2. Should the unforeseeable happens, easy access to credit. For example:

This time last year, almost to the day in fact, I was returning from holiday, landing in Amsterdam to fly home. Schipol Airport developed a technical fault, 700 flights got cancelled, every hotel from Amsterdam to Rotterdam was booked out and in the chaos KLM lost my luggage(It arrived 6 weeks later). I was stranded in Amsterdam for 3 days trying to get a flight home. My credit card was a god send as I had to eventually book a hotel, buy a change of clothes and eat things.

I get annoyed with the stamp duty too because ultimately the money that pays it comes from my already taxed income. However, it took me a while to get the credit card, and now I wouldn't be without it.

I've just been reading that not having a credit record makes no difference when applying for finance.

I can see how it was useful for you to have a credit card in that airport scenario but I would have ready access to funds in a similar situation.

AngryLips

In fairness, there are diminishing reasons to have a credit card versus years ago. However I would still have a credit card for the following reasons:
- It helps your credit history
- Emergency credit facility for emergencies
- Most of all, with so much uncertainty at the moment, using your credit card to pay for products or services offers added protection. That flight you booked for the airline that's gone bust? Ya you'll get your money back had you booked it with a credit card, no hope with a debit card.

kenmm

punisher5112 wrote: »

Get a revolut prepaid card.


Credit card are needed for van or car rentals and some other things but if you have the money then don't really need one.

The OP already has Revolut.

The second part is not true - not all companies will rent without a credit card, even if you throw money at them.

ATC110

punisher5112 wrote: »

Get a revolut prepaid card.


Credit card are needed for van or car rentals and some other things but if you have the money then don't really need one.

As per my post I have a Revolut card.

When you say "have the money", how would that work when hiring a car?

kenmm

Some (very few) companies take a large deposit. Unless they meant if you have money in general you don't need a credit card (which ids the whole point on this thread, to see if you "need" one)

punisher5112

ATC110 wrote: »

As per my post I have a Revolut card.

When you say "have the money", how would that work when hiring a car?

They tend to put a huge hold on the card.
Could be up to €2k. Happened me with a van and then had no choice but to take their insurance too... Worked out much more expensive but my credit card wouldn't work so had no choice.

ATC110

AngryLips wrote: »

- It helps your credit history

Apparently this is not the case - I'd thought the same

AngryLips wrote: »

Most of all, with so much uncertainty at the moment, using your credit card to pay for products or services offers added protection. That flight you booked for the airline that's gone bust? Ya you'll get your money back had you booked it with a credit card, no hope with a debit card.

The same protection as a debit card (chargeback) in ROI unlike the UK's Section 75

http://www.moneyguideireland.com/protection-when-buying-with-debit-or-credit-cards.html

One other point, in the US, like renting a car here, renting a hotel room can be difficult if you don't have a credit card. I got stuck once because I didn't have one.

Graham

Car hire company would typically pre-authorise a chunk of money on your credit card at the start of the hire. Often in the region of €1,000 - €2,000.

With a credit card you wouldn't see the pre-auth as it's just reserved against your available limit. On a debit card you'd probably see the money deducted and refunded at a later date.

Similar for hotel bookings/room charges.

Can be very inconvenient if you've gone on holiday with €2k in the bank and €1,500 of it suddenly vanishes.

Creamy Goodness

I much prefer to have one than not.

Makes booking hotels and buying stuff online much much easier. When purchasing online I'll throw it on my credit card (if charged in €, Revolut otherwise) that way I've roughly 50 days to pay it off. For example a washing machine broke a few years back and it was ~ 2 weeks to pay day, I didn't have the funds available (for reasons) to outright purchase a new one. Placed the washing machine on the credit card, paid the bill when I got paid. If I didn't have the card I would have had to get a loan of parents or siblings which I hate doing.

Also if it gets skimmed/compromised online they're spending the credit card companies money and not what's in my current account this limits my risk of cash flow issues whilst I wait for a bank to refund the money after the skim (this has only happened once to me so not sure it's super useful but it's a peace of mind thing).

jack of all

I always find that €30 duty a bitter pill also but I've had a credit card for 20+ years and I wouldn't be without one now, for the following reasons

While I always clear the balance in full, it is a very useful cashflow tool when managed correctly.

Peace of mind- especially for emergencies and large unexpected bills (the washing machine goes kaput- replace that day etc), no need dip into savings if current account is low.

I've used it in the past for car and van hire, had to have a card at the time , no other options available ( a few years ago now though).

I like to use it for online purchases.

If used responsibly and cleared in full each month it's a great aid to managing our household finances.

That said I reckon there will be a lot of people struggling with credit card debit as a consequence of their frivolous online spending during Covid, judging by the amount of courier deliveries I see in my area. That's a subject for another thread I suppose.

coylemj

punisher5112 wrote: »

They tend to put a huge hold on the card.
Could be up to €2k. Happened me with a van and then had no choice but to take their insurance too... Worked out much more expensive but my credit card wouldn't work so had no choice.

How did you manage to pay them a large deposit and buy the rip-off insurance? It's normally one or d'other.

sonyvision

I had a credit card going on my J1 holiday in 2012.

Since then I changed backs to KBC and upped my limit to 5k and use my credit card as my every day card for items like food shopping, coffees, online orders etc. I always pay it in full 3 working days before the due date so I pay no interest.

It has 1% cashback on grocery shopping/online purchase so this month I earned €4.03. *12 for the year is approx €48 less €30 stamp duty still up €18.

It makes cashflow planning easy, instead of having loads of cash in my current account (it's near zero) all the cash sits in savings, when the credit card is due it has been 56 days from the first item purchased.

I wouldn't be without my card but then again i'm an accountant so I understand when interest kicks in, costs of credit etc.

meeeeh

I almost always rent a car with debit cards. I rarely use credit card (last thing I used it for were flights bought in January) and half of the time forget pin for it. Once you have enough for deposit there is less and less hassle using debit card.

Graham

Graham wrote: »

Car hire company would typically pre-authorise a chunk of money on your credit card at the start of the hire. Often in the region of €1,000 - €2,000.

With a credit card you wouldn't see the pre-auth as it's just reserved against your available limit. On a debit card you'd probably see the money deducted and refunded at a later date.

Similar for hotel bookings/room charges.

Can be very inconvenient if you've gone on holiday with €2k in the bank and €1,500 of it suddenly vanishes.

That was what I meant about hotels in the US, and else where. I was staying in the Ballybunion Bar and Grill in Dublin, California(I promise I'm not making this up) and had a thousand deducted from my debit card on day one of the trip. Half my spending money gone at the start of the trip. I came home from that trip and applied for a credit card. The girl in reception said with a credit card they take an imprint of the card which reserves x amount. With a debit card, they can only charge it so the money is gone.

kenmm

At least you were lucky to have that option - its rare for a car hire company to even entertain taking the deposit from an debit card. It has other legal implications, pre auth doesn't work the same and on top of that they seem to prefer the extra level of security a credit card provides them (i.e. not quite everyone can get a credit card, more people can gt a debit card).

meeeeh

kenmm wrote: »

At least you were lucky to have that option - its rare for a car hire company to even entertain taking the deposit from an debit card. It has other legal implications, pre auth doesn't work the same and on top of that they seem to prefer the extra level of security a credit card provides them (i.e. not quite everyone can get a credit card, more people can gt a debit card).

In the last year I rented cars about 5 times in four different countries and from different providers. Using debit card was not an issue any of those times.

kenmm

meeeeh wrote: »

In the last year I rented cars about 5 times in four different countries and from different providers. Using debit card was not an issue any of those times.

oh really? Anytime I've been at the counter and overheard someone doing it, it just sounded like a massive PITA - more instances of this in Ireland right enough.


How did it work? They took the money and refunded?

Delta2113

https://www.bunq.com/travel - This is my solution. I have not had a credit card for years.

This card is coded as a credit card so You will need to have money on it.

Wheety

You might as well keep it until March now. If you cancel, you will have to pay another €30. Set a reminder for the start of March next year and decide then whether to cancel it.

meeeeh

kenmm wrote: »

oh really? Anytime I've been at the counter and overheard someone doing it, it just sounded like a massive PITA - more instances of this in Ireland right enough.


How did it work? They took the money and refunded?

The last one there was a 1000 Euro security deposit. It was all done over the phone and person actually driving the van didn't even need a card in their name. Enterprise van rental is a bit more hassle. I don't even remember how much were security deposits for car rentals. I usually prebook car rental and buy insurance separately from someone like Blue insurance.

Anyway personally I wouldn't cancel credit card. There is additional security for certain transactions. If hotel or holiday booking company goes under you have better chance of getting money back.

Tork

I was glad to have one when Ulster Bank had that major outage some years ago. It went on for quite a while and my wages didn't come through for ages. Having a credit card saved me from having to take time off from work to go to the bank or credit union to take money out. It also gave me the flexibility to leave enough money in the bank account to cover the direct debits which still were working fine.

kenmm

kenmm wrote: »

At least you were lucky to have that option - its rare for a car hire company to even entertain taking the deposit from an debit card. It has other legal implications, pre auth doesn't work the same and on top of that they seem to prefer the extra level of security a credit card provides them (i.e. not quite everyone can get a credit card, more people can gt a debit card).

Talking to a friend of mine about this who is a hotel manager, he said then philosophy in the US, is that if you cause 5000 bucks worth of damage, they can charge it to the credit card. With a debit card they'd have to go chasing you for the money. Makes sense.

punisher5112

coylemj wrote: »

How did you manage to pay them a large deposit and buy the rip-off insurance? It's normally one or d'other.

They put a bigger price hold on the card.

NewbridgeIR

Definitely worth paying the stamp duty for all the reasons mentioned. I used a debit card c10 years when I checked into a hotel for a weekend and they pre-authorised the amount of the full bill. When I left, they put through a second charge which left my account straightaway. However the first charge remained pending for 10 working days which severely disrupted my cashflow.

sweet_trip

I've toured the world from asia to the US and russia and never once had an issue with not owning a credit card.
I've considered getting one, but I've never felt the need for it. Sure it might be handy, and I might not use it more than once a year, but in my eyes I think I'd be paying a CC fee just for leaving it sit idle.



Kind of a waste of money no?

ATC110

sweet_trip wrote: »

I've toured the world from asia to the US and russia and never once had an issue with not owning a credit card.
I've considered getting one, but I've never felt the need for it. Sure it might be handy, and I might not use it more than once a year, but in my eyes I think I'd be paying a CC fee just for leaving it sit idle.



Kind of a waste of money no?

I have similar sentiments.
Have you hired a car on your travels and if so how did it work out using a debit card?

sweet_trip

ATC110 wrote: »

I have similar sentiments.
Have you hired a car on your travels and if so how did it work out using a debit card?

I've actually never rented a car because relying on bus/train has always been the best method in every country I've visited, for what I was doing at least.



Honestly, I've still yet to hear a convincing argument for me getting one other than renting a car and maybe charging back on flights if an airline goes bust or something.

freshpopcorn

JeffKenna wrote: »

Handy if you shop in surpervalu as they give 2 points per euro spent on your credit card. Wouldn't amount to the €30 fee but if you combine with the need for one if renting a car it probably makes sense to have it.

They also do this with Visa Debit!

kenmm

sweet_trip wrote: »

I've actually never rented a car because relying on bus/train has always been the best method in every country I've visited, for what I was doing at least.



Honestly, I've still yet to hear a convincing argument for me getting one other than renting a car and maybe charging back on flights if an airline goes bust or something.

yes, but the OP mentioned car rental in the opening post.

Also - some people rent cars at home a lot as its often cheaper than running an Irish car for occasional use.

AngryLips

sweet_trip wrote: »

Honestly, I've still yet to hear a convincing argument for me getting one other than renting a car and maybe charging back on flights if an airline goes bust or something.

No one is trying to convince you, people have given loads of reasons why someone might want to have a credit card, but nobody cares if you choose not to have one.

Jim2007

sweet_trip wrote: »

Honestly, I've still yet to hear a convincing argument for me getting one other than renting a car and maybe charging back on flights if an airline goes bust or something.

The only one who can make a convincing argument for you to get a card is yourself. It entirely depends on you life style, if you can't see a need for one, don't get one.

I know a middle aged who insisted in paying for everything in cash, including putting down a $6,000 deposit on a car rental in the US. The guy behind the counter did not even know there was such an option, he had to check with HQ. They then made a nice little pile of the cash and called all the office staff out so they could see what $6,000 looked like.

Bob24

Graham wrote: »

Car hire company would typically pre-authorise a chunk of money on your credit card at the start of the hire. Often in the region of €1,000 - €2,000.

With a credit card you wouldn't see the pre-auth as it's just reserved against your available limit. On a debit card you'd probably see the money deducted and refunded at a later date.

Similar for hotel bookings/room charges.

Can be very inconvenient if you've gone on holiday with €2k in the bank and €1,500 of it suddenly vanishes.

I haven't rented a car in a while, but in my experience hotels in Europe don't always pre-authorise an amount (some are happy just to have a card on file), and if they do it is more in the region of 100 to 300 euros (I also travel to Asia regularly and same experience). US hotels tend to pre-authorise larger amounts though, but I don't think I have had more than $1000.

Having said that, yes it is a drawback. But I travel a good bit without having had a credit card in my life and TBH it was never a big issue for me (it would be different if I was a regular traveler to the US and staying at many different hotels during each journey - some US hotels are crap as they wait over a week after your departure to release the security pre-authorisation, and on top of that they process the actual room charge as a separate transaction - meaning that for a few days both the final room charge and the security deposit are counted against the card balance).

Bob24

ATC110 wrote: »

Apparently this is not the case - I'd thought the same

As far as I have heard, in the US you definitely want to have a credit card even if you never use it, as not having a credit facility and a credit score is seen as suspicious by some service providers and financial institutions (kind of tells you something about American society that not having a credit facility is weird :-)).

But yeah I've lived in a few European countries without having had a credit card in my life, and this was never an issue. If we are talking about applying for a mortgage in Ireland, having a credit card history definitely isn't a requirement (and I doubt it is either an advantage or an inconvenient - unless of course there is a bad debt history whereby it will be a problem).

Dempo1

I gave up on credit cards many years ago, I got a Viabuy prepaid credit card about 3 years ago and have to say its brilliant, there is a yearly fee of around €19, a new card about €60 but that's annual fees x 2 in advance. There's no other charges if you top up via sepa. Excellent app also and my card as a dedicated IBAN AND BIC.

Evertime I use it I get a free notification as an added security feature.

One thing that didn't occur to me is car rental, I doubt I coukd use it for that but I'm likely never going to rent a car.