Case study Do I need to have a credit card?

ATC110

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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?
 

Laughahalla

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205
I got rid of my credit card last year. I don't miss it one bit. I actually feel freer without a CC.
You don't need them. you can use your debit card. You will still have the same charge back protection as the cards are issued by Visa/MasterCard. I've charged back twice on a debit card with no issue whatsoever.
I have hired car with my debit card a couple of times without issue, If i remember correctly it might have been a Revolut card I used on one occasion to hire a car.

One or two moments of madness with a credit card can lead you to a lifetime of debt. They're a trap and It's called Mastercard for a reason - you don't need a CC
 

ATC110

Frequent Poster
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204
I got rid of my credit card last year. I don't miss it one bit. I actually feel freer without a CC.
You don't need them. you can use your debit card. You will still have the same charge back protection as the cards are issued by Visa/MasterCard. I've charged back twice on a debit card with no issue whatsoever.
I have hired car with my debit card a couple of times without issue

One or two moments of madness with a credit card can lead you to a lifetime of debt. They're a trap and It's called Mastercard for a reason - you don't need a CC
When hiring a car, was your current account debited by the amount which is usually a preauthorised hold on your credit card?

I believe credit stamp duty is levied in advance in April so would I be correct in thinking there'd be no advantage in cancelling it before March 2021?
 

Laughahalla

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I don't recall them pre authorizing /debiting anything. They just took the amount owed when I hired the car. (Auto Resisen Lanzarote)

If you leave it late to cancel they will talk you out of cancelling, if you try to cancel now they will say hold onto it until next March. They will also offer to pay the tax for you of you keep it. They will do absolutely everything in their power to keep you from leaving. They're very good at this so you will need to be strong willed if you want to leave them.
 

ATC110

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204
I don't recall them pre authorizing /debiting anything. They just took the amount owed when I hired the car. (Auto Resisen Lanzarote)
On that point, I hired a car with Cicar in Gran Canaria, who are an excellent company with no insurance excess but just checked and they require a credit card.
"Only payment by credit card in the name of the contract holder is accepted. Cash payments, travelers cheques and euro cheques are not accepted. An international valid credit card is always required for the deposit (2 credit card for group J - Mercedes Class C) of which will be held on the credit card until the vehicle is returned. A deposit of up to 150 euros - varies by vehicle group and the method of payment- will be taken at the time of the rental"
 

Laughahalla

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205
Each car rental place will have their own rules. Those that accept debit cards will have a competitive advantage over those who do not.
 

RedOnion

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I believe credit stamp duty is levied in advance in April so would I be correct in thinking there'd be no advantage in cancelling it before March 2021?
Yes, correct.

I have a credit card, but I don't use it. I've hired cars both here and in France using debit cards, but I've heard it can be tricky, and I appear to have got lucky.
It's straight forward if you use their insurance which works out more than the stamp duty you're saving!
 

Jayom75

Registered User
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Ok. Going to buck the trend here. Back in 2011, right in the middle of the financial crisis, my investment property developed a leaking roof which wasn’t covered by insurance. The tenant left (no more rent) and the banks wouldn’t lend money to me to fix the roof (it was a big job - €20k+). As a last resort I applied for a credit card with Avantcard which afforded me credit towards paying for a new roof AND at the time there was a 0% interest deal for 9 months if I transferred cash from the credit card to my current account. I’m no fan of credit cards but it dug me out of a major hole allowing me to fix the roof and get a new tenant in for more rent than the previous tenant had paid. I took a hit on the interest after the 9 month period but it was a price I was willing to pay as I had no other avenues. Bottom line: they worked for me as a line of credit of last resort.
 

skrooge

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196
Your spending habits plus the reward features of your cards are factors to consider. In reviewing if you need/can benefit from a credit card I'd first ask what are your total combined card payments (credit and debit)? Second, what value of these transactions could be put on your credit card rather than debit card? Third, how do the benefits (if any) of your debit card compared to your credit card? Through a couple of tweaks you might be able to optimise the benefits of having the right credit card.

In my case I've an avantcard credit card that offers "cashback" at the end of every month. I moved to it in an attempt to cover the cost of the stamp duty. I can get up to €12 back a month. Debit card has no such feature. I effectively don't use my debit card at all now. Based on my spending habits it took me 5 months to cover the stamp duty. The remaining 7 months rewards are a nice little extra. Covid had helped I use my card wherever possible. Haven't withdrawn cash stove December!

Based on Avantcard if you had an eligible spend of €80 a month you'd cover the stamp duty. I know KBC offer something similar (think it's 1% capped at €10) but you get the idea.
 

roker

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1,625
I had hassle getting my hotel booking back through covid booking. The VISA credit card was very helpful because the other party disputed it (that's another story) and it had to go to pre arbitration after which I got my full amount back €540.
Would a Debit card go to this trouble?
 

Brendan Burgess

Founder
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As a last resort I applied for a credit card with Avantcard which afforded me credit towards paying for a new roof AND at the time there was a 0% interest deal for 9 months if I transferred cash from the credit card to my current account
I think that this is a really important point.

There are lots of posts here advising people that they should have an emergency fund of 6 months' expenses. I don't agree with them as I think they would be better off paying down their mortgage or whatever.

A credit card with a big limit costing €30 a year is a great source of emergency funds. €30 is a very small premium to pay. I have a €12k limit on mine and I presume that if I needed to increase it, the bank would oblige.

It gives you breathing space to find a cheaper source of finance.

Brendan
 

RedOnion

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I had hassle getting my hotel booking back through covid booking. The VISA credit card was very helpful because the other party disputed it (that's another story) and it had to go to pre arbitration after which I got my full amount back €540.
Would a Debit card go to this trouble?
Your chargeback was under the Visa scheme rules. Visa don't care if it's a debit card or a credit card. The same rules apply.

In the UK there is extra protection for credit cards (section 75) but there is no such differentiation here.
 
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