advice on multiple credit cards

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amtc

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I'm trying to figure out my credit cards - for right or wrong, my mother always told me to take out whatever credit I was offered (obviously as long as I could pay it back...better to use the bank's money than mine).

I have a number of cards.

BOI Clear Credit Card at 9% - about €900 on this. Credit limit 22k. Can pay off any time (paying 300 a month and have just cleared car loan so can pay off in the next two months). Could pay off no problem from savings. This is my main day to day card

AIB Card - no idea of interest rate, but comes out on dd every month - 17k credit limit - never any more than 100 on it.

MBNA card - 30k credit limit. Nothing on it.

Am I mad to have all of these?

The BOI one I use as a regular credit card
The AIB one I use like a debit card
The MBNA one is my running away money.

I don't mind paying the stamp duty.
 
Absolutely. If you don't intend on running yourself up a hefty bill of 69k then what is the point of it?
 
The point of it is that banks are not lending. If for any reason, one needs sudden access to a large sum of money, the credit line is already in place.
Applying to the same institution for a loan would probably result in a no...

I have several cards for the same reason. In this environment a line of credit is not to be sneezed at (obviously accepting there is an ability to repay).
 
Remember too that you are paying an annual fee on all three cards.
If you keep a balance on one or more you are also paying interest on it every month.
If you have the savings to clear it you should.
 
ivannomonet said:
The point of it is that banks are not lending. If for any reason, one needs sudden access to a large sum of money, the credit line is already in place.
Applying to the same institution for a loan would probably result in a no...

I have several cards for the same reason. In this environment a line of credit is not to be sneezed at (obviously accepting there is an ability to repay).
Click to expand...

It's probably the most expensive line of credit you can get though!
 
actually 9% is less than a personal loan rate at the moment.

And the point is that it is for emergencies.

As I said I don't mind paying the annual fee, for that peace of mind

Thanks
 
You might think about starting a proper emergency fund then, which is kept in whatever high-interest savings account you choose (or less high-interest accounts, stocks and shares, etc. depending on how easy you want access to be, how risk free it should be and all that). When that is done, if you have an emergency, you will be able to deal with it without getting into debt. Don't underestimate it. While there is a certain amount of comfort to be had from having access to credit in case of emergencies, if you do end up having to use that credit, the comfort will soon be replaced by the crushing burden of debt (I'm only very slightly exagerrating in my description of that to make the point :) ). And who's to say that the emergency would be one that would leave you able to pay back the debt at all.

As for how much your emergency fund should be, there are lots of different ideas. Six months salary, a round 10,000, enough to cover basic expenses for three months, etc, etc, etc.

amtc said:
... for right or wrong, my mother always told me to take out whatever credit I was offered (obviously as long as I could pay it back...better to use the bank's money than mine).
Click to expand...

Unless the savings you have are earning more interest than the interest you are paying on the balance you are maintaining (usually unlikely) then it is costing you and you should clear the balance to get rid of that cost, i.e. you're not really using the bank's money, you are using up yours because it's costing you to use the bank's money.
 
amtc said:
I'm trying to figure out my credit cards - for right or wrong, my mother always told me to take out whatever credit I was offered (obviously as long as I could pay it back...better to use the bank's money than mine).

I have a number of cards.

BOI Clear Credit Card at 9% - about €900 on this. Credit limit 22k. Can pay off any time (paying 300 a month and have just cleared car loan so can pay off in the next two months). Could pay off no problem from savings. This is my main day to day card

AIB Card - no idea of interest rate, but comes out on dd every month - 17k credit limit - never any more than 100 on it.

MBNA card - 30k credit limit. Nothing on it.

Am I mad to have all of these?

The BOI one I use as a regular credit card
The AIB one I use like a debit card
The MBNA one is my running away money.

I don't mind paying the stamp duty.
Click to expand...

If you don't mind the annual stamp duty and don't run up huge balances, then I don't think you are mad.

I also have 3 credit cards......

MBNA 8K limit - 7k balance o/s but this is interest free for 6 months and I am earning interest on the 7k

Tesco 1.6k limit - balance cleared every month - used regularly to get Tesco reward/clubcard vouchers

AIB 5K limit - balance cleared every month - really only used to top-up an online betting account
 
amtc said:
for right or wrong, my mother always told me to take out whatever credit I was offered.
Click to expand...

When I started reading this I thought it was a wind up. I give my kids the exact opposite advice. Do you pay interest, if you do then you are not managing your finances correctly.
 
I think he (or shee?) meant that he has 7k in savings, earning interest. When the interest-free period on the credit card is coming to an end, he can pay it off but in the meantime, he's earning interest on the 7k. That's what I understood anyway.
 
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