How AI Legalese Decoder Can Help You Decide: Would You Get a Credit Card in My Position?
- April 30, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Considerations for Credit Card Usage
27F making $92k. I’m incredibly privileged to be in a position where I have minimal expenses, living with my parents and don’t pay for rent, utilities, or groceries. I am also a low spender by nature, and don’t pay for much outside Netflix/Spotify, my phone bill, and fuel that I spend maybe $300 a month on. I eat out around 1-3 times per week. I don’t really shop or make purchases very often, and prefer to save my money to go towards travel.
I have been considering the Amex Airpoints card to build my credit and to put the money I do spend towards Airpoints. But considering I’m such a low spender, I’m not sure it would be worth it? I have always paid for things in cash and am confident that I would always be able to pay off a CC on time.
The Amex Platinum card has a really great rate (1 Airpoint per $59 spent) and a signup bonus if you spend $1500 in the first 3 months… but I’m not even sure if I could hit that. The free Amex Airpoints card earns 1 Airpoint per $100 and the signup bonus applies at $750 spent.
Should I just stick with paying in cash and putting my earnings away in TDs and high interest savings accounts, or is there a credit card out there suitable for my situation?
TIA 🙂
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Considering your low spending habits and preference for saving money, the AI Legalese Decoder can assist you in understanding the complex terms and conditions of different credit cards. By analyzing the fine print and providing simplified explanations, the AI tool can help you make an informed decision about whether to opt for a credit card like the Amex Airpoints card. Additionally, the decoder can highlight any hidden fees or potential drawbacks of different credit card options, allowing you to choose the best fit for your financial situation.
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****** just grabbed a
Firstly, ‘building up your credit’ is not really a thing in NZ. Banks here do not really look at credit scores to determine if they will lend, they only check them to see if there is a reason not to lend (I.e if you have loan arrears, missed payments on facilities, money owing to debt collectors or bankruptcy).
So beyond that, it’s considering if it’s worth it for you versus the cost. You’ve said you’d pay it off in full each month, so the cost is just the annual fee probably. You could check through your recent bank statements to see all payments you’ve made over the past few months by card to find your average monthly spend. Calculate how many airpoints you’d earn per month/year and weigh that against the cost of the credit card. Consider that if you’re earning 200 airpoints but the card costs $150 say per year, it’s not necessarily better unless you’re going to actually use the airpoints. Having tons of airpoints banked up doesn’t help you if they are unused, so all you’d be doing is paying $150 real money to get $200 pseudo money that can only be used on flights
This is not financial advice, I’m not a financial advisor 🙂
You don’t need to build credit. This is an American concept that is not relevant in NZ.
Building credit isn’t really a thing. Get a free card if you want the points although you won’t accumulate many, AMEX also isn’t accepted at lots of places, eg Gull for fuel. Also find it often doesn’t work in some card readers.
If you pay it off in full then great but don’t spend more.
Also banks will look at credit limit if applying for a mortgage so would only request a low limit
Credit cards are great for the points as long as you pay them off every month and don’t incur interest. I use it for as many regular expenses as possible – groceries, power, internet, cell phone, insurances etc. I got $550 cash back at the end of last year, although I did some travel in that year so it was a bit higher than normal.
Given your low monthly spend I’d say it probably isn’t worth it. You need to be able to justify the yearly fees by earning more airpoints than the fee costs you. Like someone else said, maybe try to calculate how many airpoints you would accrue.
I use credit card to manage my expenses. The problem that i have with debit card is that it should always have some money in it.
Lets say i get paid $1000, at the end of the month after expenses i have $500. I can’t do anything with this left over $500 cause i might have more expenses next month. So i keep it there for precaution.
Now with a credit card, i pay for everything using my credit card and at the end of the month i pay off the credit card, and i can do whatever i want with the left over. If there is more expenses next month, credit card will handle it.
Rewards are cherry on top for me.
I use the CC for online purchases due to the additional safety. If there’s fraud an someone gets my CC details it’s MUCH easier to have the charges removed (and quicker) than it is getting them to put money back into a debit account.
This alone is why we have a CC for the family (airpoints are are bonus).
The dish cash back card may be worth a look as you are a low spender
AMEX is extremely frustrating becauseof high fees and not being as commonly accepted as visa/MasterCard.
I have a low limit cashback visa card, which I pay off in full every month. It makes more money than it costs me in fees and cc surcharges, but just barely.
If you are the type that absolutely would never be overdue in payments, credit cards have massive benefits.
Amex especially.
– Great airpoints and status point rewards
– Other rewards like special offers
– Much better protection from fraud etc than debit cards
– Essentially an advance month of credit
I have the Amex Airpoints Platinum and the ANZ Airpoints Platinum.
Amex takes most expenses, and the ANZ is used for the rest.
It’s a no-brainer imo. Never had to pay interest and the value of the benefits over time so far is likely to be very high.
I pay my cards off WEEKLY (when I get paid) and I stick to my budget.
I’m about to upgrade my Amex to The Platinum Card (get Amex points rather than Airpoints) and that’s going to be amazing with its perks.
For you, the Amex Platinum might be ok, or might be a bit high for a low spender.
You might consider going for the tier below (just the Airpoints Card at $0 fee). Or you might go for something like ANZ or Kiwibank etc if you just want one card (which makes it slightly easier to track spending).
If your spending is sufficiently low that you’re not confident you’d hit $1500 in three months, should probably give any card with an annual fee a miss. Very likely the fee would be greater than the rewards for restrained spenders.
For cards with no annual fee, if you’re certain your spending habits won’t be impacted (can encourage overspending for some), then getting a card is an understandable decision. A few rewards, and can help with a credit score if you’re moving somewhere where that matters.
As someone with similar spending habits, I personally still wouldn’t get one though. Prefer cash or debit cards. Nobody gets a credit card thinking they’ll be one of the ones who can’t use one responsibly, don’t want to risk being wrong about my susceptibility to consumer psychology. Also don’t like Visa/MasterCard/Amex taking a significant cut from the retailer’s end.
I looked at a points credit card recently for same and to even get the annual fees worth ($40) you’d have to spend an immense amount… $11,000 worth of points gets you a bag of coffee beans…
So I imagine the free cards have even less pay off for people who aren’t massive spenders like us..
To be fair i think the mental load of having to think “I have to transfer the balance before interest” and doing that… isn’t worth the potential literal couple of dollars worth of points it may yield
I do this. If I pay for everything a debit card, why not put it on the Amex and get points. And it can be handy to buy a large purchase at the start of thr month… I think its around 55 days interest free
Shopping at certain places have no AMEX surcharge… some of the ones I frequent but there are posts on here with more detailed lists
Z
Smiths City
Bunnings
M10
NW
Woolies
The Warehouse
Kmart
Skinny
I would just get the free air point Amex card. Say you spend $500 a month that’s 5 airpoints. In a year that’s 260 points. If there are no annual fees, that’s a free domestic ticket somewhere or can go towards flights overseas.
Just be vigilant with payments and you’re set.
Amex tends to be very picky who they lend to. Theres been plenty of threads here in the past few months asking why people have been declined with good income, good credit history but tended to have low expected use and minimum limit.
Credit score building here is not like it is overseas. Its used as a risk assessment primarily, you dont unlock special rates for having a high score, but it would likely impact the amount the max exposure they are comfortable with, meaning the amount they will lend you. Anyone telling you it does unlock better rates is full of shit.
Amex works for people who put their entire life on their card and pay off in full each month.
If considering the card, it should work for you on how you live already, if you have to rejig your entire spending approach just to try farm points, its going to be become quite annoying, and obsessive for some people as every decision is based around mix maxing rewards points.
Just my 2c
“Build my credit” — I was told this isn’t a thing in New Zealand. To add to that, when I applied for a mortgage banks didn’t look kindly in me having a credit card. I was advised to terminate it(so I did). When I did get my mortgage and reapplied for a card, I got denied. I come from southeast asia and have always used a credit card for financial protection (also helps to get a report each month aka bill that helps me track spending). Personally, as long as I pay off the entire balance each month and don’t go into debt – the airports and loyalty program does make sense. Good luck
I was wondering if using a credit card was a good way to stay a ‘step ahead’ of your pay check whilst at the same time building your rewards/cash-back? Often I find myself just holding on to only feel relieved when my monthly pay check comes in.
My initials thoughts are ‘if I just stay within my spending and pay it all back when my monthly check comes in’ I should be sweet? Easier said than done.
What are the pit falls one must consider if they’re to go down this path?
Amex often has a bonus of a couple of hundered airpoints dollars for joining which offsets the first year (as long as you plan to travel with air NZ and use them up). So in your position with low spend I would say worth it for the first year but cancel before the second year starts and the fee is deducted again.
So many restaurants and cafes now have surcharges for using credit cards, so you may find it difficult to gain much benefit if your expenses are mostly from eating out.
Get an Airpoints Visa and use this as your primary spending card.
It’s not really worth it unless you spend a lot of money on cards.
American Express Airpoints has no annual fee but a lower ratio. Might be worth looking into.
Absofuckinlutely
Get the free AMEX, it’s free and gives you airpoints, as long as you pay off in full you can’t “lose”. Also you get protection buying stuff online with credit cards. For places that charges a credit card fee then use your Eftpos/debit card.
Building a credit score is a thing in America, not NZ. Too much American social media content.
1 Airpoint per $59 spent simply mean you get 1.69% back for every dollar you spent or 1.69 A$ per 100$ spent.
If I did my math correct, you would need to spend $11,505 to break even with Amex Platinum annual fee of $195.
Stick with the free one!
If you have opportunities, get CCs in the US. Some of them can give you up to 5% cash back with no annual fee.
Everyone should have atleast 1 credit card!
There’s a fee free amex card that earns airpoints. Just get that.
https://www.moneyhub.co.nz/credit-cards.html
Any airports is better than no airpoints!
If I was you, in your position I’d get AMEX (I’ve got 1), but always pay off what you spend immediately! Otherwise it’ll just mount up and lead to higher debt.
Also, there’s still quite a lot of places that don’t accept AMEX! So you may find it hard to spend on anyway – depending where you do your shopping and what you buy.
Nobody in NZ should ever get a credit card. If you don’t have the money you shouldn’t be buying it.
The only people who get credit cards are generally the people who definitely should not have them in my experience.
My GF for instance had credit card debt but was also trying to maintain savings. I did explain to her why she was a silly sausage.
After she paid it off, she cut it up.
I would say no personally remember you also get fees for using CC and those 1-3% surcharges add up. It also creates extra admin IMO.
I wouldn’t bother with an Amex. They’re not as widely accepted as visa/MasterCard and like you said you won’t really rack up a million points anytime soon so it’s a lot of effort.
I spend like 700-1100 a month on my asb true rewards. Considered going up to a higher rewards one but this costs $40 a year, I don’t think I would get much more value out of a platinum card
You will be declined i reckon even with the low expenses. I earn 150k my partner 60k and we got declined on a joint application and we both have very good credit scores
I wouldn’t get a credit card for any reason. Either you have the money to spend, or you don’t. Very, very rarely, people are able to use cards responsibly and pay off the balance each month. Most of us will fall in the spending trap eventually.
Have you considered offering to pay your way with your parents? You’re 27 and happy to just keep taking from them – recommend learning what costs of living really are before you’re off overseas and completely out of your depth
Talk to a bank, jesus christ
Is this a real post
Privileged, LMAO.
What’s the opportunity cost of living with your parents?
Avoid if you can. Your savings history will provide a better indication to the banks than any credit score that you try to develop via use of a credit card. By the sounds of it you are putting quite abit away in savings so it shouldn’t be an issue. I have never thought highly of credit card rewards. $1 back for every $100 spent. That’s like a 1% return/margin. Stick to your current savings habit. The one thing I will add is term deposits aren’t great for the long term. So consider what you can do with your savings for the long term.
> I have minimal expenses, living with my parents and don’t pay for rent, utilities, or groceries
Do you… even offer to contribute?
I personally wouldn’t be able to take all that without contributing at 27. Would make me feel icky.
AMEX sucks. I cancelled mine as I could rarely use it. Any of the air point ones are better. I exclusively use my cc for all expenses and pay myself at the end of the month. I never let any cc debt roll over. If you can budget and manage that way then it’s useful.