Credit Card v's savings

[CARNAT22]

I have two CC's one with a few hundred quid on it that I clear every month and the other has nothing on it.

I was thinking in my last 3 months of mat leave when I get nothing that it may be an idea to put a few expenses on the CC I don't use and then do a balance transfer when I go back to work.

I am def going back so paying off CC wouldn't be a problem?

I am pretty good with money, don't have any debts.

We do have some savings though, would it be better to use them?

xxxxxxx

 

[scn]

You'll have to pay interest on your credit card or lose interest on your savings! And pay the fee for balance transfer. Work out which one would cost you more money xx
IMO using your savings would cost less and you can just pay your savings account back when you return to work

 

[littlemonkey]

Unless you have a 0% rate credit card, or an amazing interest rate on your savings, you will end up paying more interest on your credit card than you would earn on interest in your savings. Personally I would use the savings first. I'm in a similar situation, we have savings which we will be using if short and I have a large overdraft we can dip into incase of emergencies.

 

[CARNAT22]

Sorry I didn't explain myself properly.

I'd use CC between end Jul and end of Oct, then do a balance transfer when I am earning again but I'll go for a 0% interest. There are always companies offering deals so I'd aim to do the transfer to a co. offering quite a long term '0% interest on balance transfers' offer and pay off balance before any interest kicks in.

My savings don't earn a huge amount of interest but I am trying to keep them safe for when we move / have number 2

xxxxxxxx

 

[Robyner]

If it was me my first feeling would be to use savings, purely because its there and the future can be so uncertain. I've had two major unexpected situations happen in life, so now I try to be cautious. Putting myself into the situation you describe, I would be thinking - my intention is to definitely go back to work but if something unexpected happened, I wouldn't want a credit card bill that I was struggling to pay off.

On the other hand I think what you are saying makes perfect sense, it's a really sensible way of doing things. I'm just more cautious than most now. I would have definitely considered this before iykwim x

 

[Little_angel]

The way interest rates are at the moment, I really can't imagine there's much to gain from keeping your savings, even if the credit card borrowing costs you nothing and it all pans out exactly as you say. That being the case, it's a personal preference, because it's just money shuffling.

Personally I would prefer to use the savings, because it keeps things simple.

 

[mrswoody]

I would use the savings as it saves the faff with transferring cc balances etc
There isn't much interest to be had on savings these days sadly.
Once I am back on full pay whatever is left of my savings will be paying off my cc and ill start to save again x

 

[CARNAT22]

Thanks ladies

I know it sounds silly but I worked so hard to save it seems almost a shame to use the money just to 'live'

We managed to get everything we needed for baby and pay it off whilst I was still full time. James has his own savings account so any big purchases for him will come out of that (I am thinking when we move he'll need furniture?) but other than that there shouldn't be much he'll need.

OH's work is fine at the moment, I guess I am just worried that work will dry up and we'll have no income at all?

I budgeted for using x amount of my savings in the last few months of maternity leave (I did an Excel spreadsheet and everything LOL) the CC was just an idea.

xxxxxxx

 

[babybee]

You can get really good credit cards with low interest rates and which give you back 'rewards' when you use them. We have a Natwest 0% credit card and one of the Amex Avios cards and we have direct debits (household bills) going through them (rather than our current accounts) which we clear every month. We've so far received enough points on the Natwest card to earn £350 of vouchers which we can spend in supermarkets/amazon etc and with the Amex we have earned enough to receive two return flights to a zone 1 country which for us is Italy.

Id recommend finding a deal like that because you pay no interest, you don't fall into debt as you're paying it off monthly (or in your case a few months later) and you get the extra benefits.

As long as your very cautious and dont let your cc bill get more than whats in your savings then using a cc instead of savings can really have its benefits.

 

[littlemonkey]

The way interest rates are at the moment, I really can't imagine there's much to gain from keeping your savings, even if the credit card borrowing costs you nothing and it all pans out exactly as you say. That being the case, it's a personal preference, because it's just money shuffling.

Personally I would prefer to use the savings, because it keeps things simple.

I think this is the way to look at it, it is just moving the same money around at the end of the day. You will still be spending equivalent to what's in your savings whether it's by just spending that money outright, using it to pay off the debt later or by not saving when you're earning and paying it off. Does that make sense? I've probably not explained it very well!

Unless you do have a card where you get rewards as mentioned above, there doesn't seem to be much point in the credit card idea to me.