Need a credit card for anything these days?

jjnaas

Travel is my one luxury/vice. Don't drink a drop etc twice a year I buy business class flights and a very nice 5 star hotel and the AIB daily debit card limit is never enough so I need a credit card. I usually rent a card when in the US too.

I suppose I could move to BOI where the daily debit card limit is 25K but I'm too lazy!

I also have the AIB platinum so the cashback covers the 30 euro and then the AerCard which gives me travel insurance and 2 free flights a year in Europe.

I was in the US on the way home when Thomas Cook went bust. There were a lot of British families in MCO hysterical. Their hotels would have blocked 100ish a day as a security deposit x 14 days so they had 1400 'frozen' that they couldn't use and no money until they got paid into the account again. They were in bits and waiting for the airline to sort them out which I'm sure it did and all was okay but no way would I travel abroad with a debit only unless I had a large reserve in the current account or in savings that could be immediately withdrawn. Preferably the second option because I'd be terrified of losing the debit card if i had thousands sitting in the current account.

Jim_Hodge

Whoa up there a sec!

https://www.boards.ie/discussion/comment/120444875#Comment_120444875

Care to explain? I've found Debit Card protection to be just as advertised.

ELM327

https://www.boards.ie/discussion/comment/120440156#Comment_120440156

That's not true. If you file a chargeback on a debit card you get provisional credit until the issue is resolved. This happened me last year. (Revolut issued Visa debit).

I had a 12k limit credit card, which I gradually maxed out. Once I cleared that off I cut it up and got rid. I then vowed never to have a credit card again as I'm too impulsive. I've rented cars, stayed in hotels etc without issue.

XsApollo

Credit card always for online purchases , deposits and large purchases and stuff like that.

any shenanigans from the service provider and you can always issue a chargeback from the Credit Card company.

Glaceon

https://www.boards.ie/discussion/comment/120447107#Comment_120447107

I'd rather not chance it. I've never once accrued interest on a credit card so I'm fine with having one.

ELM327

https://www.boards.ie/discussion/comment/120447157#Comment_120447157

That's the great thing, no one is going to force you, if you're able to (unlike me!) control your use of the card then more power to you! The only reason I commented at all is to show that debit cards have the same protections as credit cards. Chargeback rights.

iwillhtfu

https://www.boards.ie/discussion/comment/120447107#Comment_120447107

That's the main thing to watch with a credit card, running up bills like that on a credit card is madness. No offence meant Elm.

In my eyes a credit card should be used and balance cleared each month or so. A high limit is fine to cover for those moments where you're caught out. The one thing you do not want is credit card collections chasing you as they will absolutely hound you till you're fit to crack up.

Is there a place for them? Yes, they're handy access to instant credit. Are they a requirement these days? No, not at all.

Do they get some people into more financial trouble than they're worth? 100%

Clareman

A credit card should just be a way to pay for things, not a loan facility, it is 1 of the highest rate of interest of any credit facility, your limit shouldn't be a target, just something.

For me a credit card is a secure way of paying for stuff in a virtual world, if you don't think it's worth €30 a year for the convience, then don't have 1.

dotsman

https://www.boards.ie/discussion/comment/120447072#Comment_120447072

While we use them in pretty much a similar way, the reality is that, in the background, they are polar opposites (hence the "Debit" and "Credit" parts).

A Debit card is simply an electronic way of asking your bank to transfer money from one account to another (from your account to the retailer's account). And that's it. If there are any problems, the issue is between you and the retailer, not the bank (other than you hassling them and they, maybe refunding you out of goodwill). A credit card, on the other hand is derived from charge cards which, in turn are derived from "tabs". A credit card is an electronic way of asking your bank to buy you something and "stick it on your tab". It is the bank who buys the item. If there are any problems, the issue is between the bank and the retailer, not you.

While banks "offer" a similar dispute/protection policy, it is only an "offer of goodwill" and is down to how good the bank's customer service is. With a credit card, the bank is legally on the hook, not you. The other big difference is, with a debit card, the money leaves your account straight away, whereas with a credit card, the money doesn't leave your account for 4-8 weeks after (and longer if you desire). Not only does the "possession is nine tenths of the law" phrase apply here, but it also impacts the inconvenience of trying to get a refund.

Classic examples are where, during the Great Recession, lost of people had problems when buying furniture (where you typically purchase a sofa, but it doesn't get delivered for several months) and the company went out of business prior to delivery. People who paid with a debit card lost their money and were simply added to the list of creditors for the bust company. People who paid with a credit card simply had the charge removed from the credit card account and the bank got listed as a creditor. More recently, during the pandemic, people had similar problems with hotel and airline bookings as well as concert tickets etc. With a credit card, there was no problem. With a debit card, people were at the mercy of their banks customer service policy (which varies considerably depending on the circumstances).

You indicate you have had an experience and the bank did well by you. That's great. But the problem is - do you trust your bank will always do "right by you" when they don't necessarily have to?

There are other cons regarding using debit cards in lieu of credit cards. If a criminal was to get your debit card details, they could clear out your current account. Let's say that happened yesterday (Holy Thursday). While you may have contacted your bank and the card is now cancelled, your current account is empty until your bank investigates which won't even begin until Tuesday. Even if they do find in your favour, it could be the end of next week or even the week after before the money is refunded to you. in the meantime, you have no money and direct debits/standing orders going unpaid as well as no money to buy food/groceries etc. On the other hand, if your credit card is compromised, and the criminal uses it to buy things all the way up to you car limit, you are not really impacted unless you had planned to purchase some expensive item in the coming days. You ring your bank, they cancel the card, and later next week, the fraudulent charges are removed from the credit card account. But, in the meantime, your current account is still fine - you still have all the money at your disposal that you otherwise would have.

OrangeLavender

Great explanation. I used a credit card for almost every large purchase because of security, cashflow and rewards. One question - I always transfer money immediately after a purchase so my credit card balance is always 0 or sometimes even in the positive. Would that be an issue if I queried a charge as I would have technically already paid for it by transferring money to the card even if that month's bill hadn't arrived yet?

PommieBast

https://www.boards.ie/discussion/comment/120452416#Comment_120452416

Bit of a grey area that. Dunno about things in Ireland but under UK law (S.75 Consumer Credit Act 1974) they are very explicit about the credit card company being liable for supplier failure. It is a major reason that I used a UK credit card even when living in Ireland.

elperello

Credit card is a good standby for emergencies.

If you set up a direct debit to pay the full balance every month there is no danger of paying interest.

JTMan

https://www.boards.ie/discussion/comment/120452416#Comment_120452416

Why transfer immediately after purchase? Your credit card provider will give you 30-60 days free credit. Just pay via direct debit so you don't forget.

As to whether credit cards are worth it ... I have used a credit card for the last 20 years and paid it off each month. I much prefer a credit card over a debit card. AIB give me 0.5% Cashback via Platinum Card on purchases over 5k per annum, I only have you deal with one payment per month rather than constant amounts going out with debit cards and I pay off in full each month via direct debit. If you are disciplined then a credit card is worth it.

OrangeLavender

@JTMan I got into the habit of transferring money to my card regularly because I like to know exactly how much of my own money I have left at any given time during the month without having to do mental gymnastics - my AIB platinum takes a good few days for the balance to update. I agree that the cashback is a nice little bonus but the banks obviously rely on a proportion of people not paying off in full. I also find cards handy for work expenses. It's nice just to be able to throw them on the card knowing I'll be claiming back in a couple of weeks.