Emergency Fund - Credit Card

[Pho3nix]

Hi all,

Have some saving put aside but it's all in a notice account.
Colleague mentioned something about a Virgin Credit Card that is interest free for the first 55 days.
Know a couple of you guys have the card and wanted to get your reviews.

Figured if something came up, I'd use the card.. Put in notice and pay the balance before the interest kicks off.

Thoughts or suggestions in this regard?

 

[Ecco]

Dont see any issue with that. Provided you dont abuse the card and can pay it of with the money in the notice deposit

 

[Dubes]

Why not consider investing your savings in a collective investment? You're looking at most 8 days to access the money and probably far better returns than your notice account. There are minimums applicable in most instances though

 

[HavocXphere]

Seems fine

 

[PsyWulf]

Good workable idea if you have the self-control

 

[Pho3nix]

Dont see any issue with that. Provided you dont abuse the card and can pay it of with the money in the notice deposit

Usually give me cards to my mom to keep to prevent some un-needed spending.

Why not consider investing your savings in a collective investment? You're looking at most 8 days to access the money and probably far better returns than your notice account. There are minimums applicable in most instances though

Notice account is 32 days :\. Started saving with the intention of moving the money into a MoneyMarket account which I'm aiming to do early next month.

Thoughts on which investment vehicle will provide better returns?

 

[Pho3nix]

Seems fine

Good workable idea if you have the self-control

Is Virgin the best CC provider for this though.
No monthly fee's ?

Don't want to pay if I'm not using the damn thing.

 

[froot]

Good workable idea if you have the self-control

A credit card requires discipline and self control to be a useful tool.

I use mine, I can max it out if I want, but I always have money to cover it. I just don't use my cheque account for in case I need that money.
On payday I simply pay off my CC again.

 

[Topdoggdbn]

Yep virgin money works well.

Asked to close mine due to my bad behaviour, they politely didn't. No monthly fees so no real problem, just happy I cut the card up.

 

[Baba Vakai]

Discipline

 

[Franna]

Pho3nix: With which bank is the notice account? What is the invested amount, monthly bank charges and interest earned?

Hope it is not ABSA. Their bank charges is almost always more than the interest received, so your money will get less every month, not even taking inflation in account.

Open a Capitec account and put money into a separate account for emergencies.

 

[Pho3nix]

Pho3nix: With which bank is the notice account? What is the invested amount, monthly bank charges and interest earned?

Hope it is not ABSA. Their bank charges is almost always more than the interest received, so your money will get less every month, not even taking inflation in account.

Open a Capitec account and put money into a separate account for emergencies.

Notice account is with Standard Bank. No monthly charge for the account. Interest is a measly R9 a month currently. Think it's capped at 3.75% for the money I have in the account.

 

[Pho3nix]

Yep virgin money works well.

Asked to close mine due to my bad behaviour, they politely didn't. No monthly fees so no real problem, just happy I cut the card up.

Any reason they didn't cancel it?

 

[Dubes]

Thoughts on which investment vehicle will provide better returns?

Almost any portfolio in a collective investment (unit trust) will achieve better returns. Your choice of portfolio would depend on your investment time horizon, as well as your needs and risk aversion.

There are costs involved but with the returns you're currently getting you'd still be far better off!

How much are you adding on a monthly basis? And what is the current balance?

EDIT: Some ideas of returns on some Stanlib (as an example) unit trust portfolios (Note: that past performances do not guarantee future performances)

Fund	1 year	3 years	5 years
Stanlib Equity	23.21%	23.56%	20.76%
Stanlib Balanced	17.55%	18.11%	16.82%
Stanlib Conservative FoF	9.03%	9.44%	9.75%
Standard Bank Money Market	5.42%	5.34%	5.87%

You do need to bear in mind that chance of higher returns usually comes higher risk. But even a money market fund is not without risk... ask those invested in Africa Bank. And the risk of inflation in those low return accounts is a guaranteed. A return of 4% with inflation sitting at around 6% means you are going backwards.

 

[Pho3nix]

Almost any portfolio in a collective investment (unit trust) will achieve better returns. Your choice of portfolio would depend on your investment time horizon, as well as your needs and risk aversion.

There are costs involved but with the returns you're currently getting you'd still be far better off!

How much are you adding on a monthly basis? And what is the current balance?

Current balance is just shy of R20k (R18 750). R1k monthly contribution and R250 odd when I'm bored or have the craving to buy something .

 

[Dubes]

Current balance is just shy of R20k (R18 750). R1k monthly contribution and R250 odd when I'm bored or have the craving to buy something .

Man, you'd be so much better off with a collective investment. The reason I asked amounts is because of the minimum amounts needed. You are well above these.

Look at those returns I added above to get an idea. With inflation you are currently going backwards.

 

[mr_norris]

Is Virgin the best CC provider for this though.
No monthly fee's ?

Don't want to pay if I'm not using the damn thing.

+1 on this. I still can't wrap my head around all the other banks charging for a CC. I mean, I just moved to FNB (cheque account only) and saw that I'd have to pay R44.50 for the same setup. Disappointing. With Virgin I stay.

A credit card requires discipline and self control to be a useful tool.

I use mine, I can max it out if I want, but I always have money to cover it. I just don't use my cheque account for in case I need that money.
On payday I simply pay off my CC again.

I do the same. Although I'm slowly changing my habits. Had a bad experience where I transferred all my cash (to pay it off and then some) only to discover my card was cloned and they maxxed it out the next day :/

 

[Pho3nix]

Almost any portfolio in a collective investment (unit trust) will achieve better returns. Your choice of portfolio would depend on your investment time horizon, as well as your needs and risk aversion.

There are costs involved but with the returns you're currently getting you'd still be far better off!

How much are you adding on a monthly basis? And what is the current balance?

EDIT: Some ideas of returns on some Stanlib (as an example) unit trust portfolios (Note: that past performances do not guarantee future performances)

Fund	1 year	3 years	5 years
Stanlib Equity	23.21%	23.56%	20.76%
Stanlib Balanced	17.55%	18.11%	16.82%
Stanlib Conservative FoF	9.03%	9.44%	9.75%
Standard Bank Money Market	5.42%	5.34%	5.87%

You do need to bear in mind that chance of higher returns usually comes higher risk. But even a money market fund is not without risk... ask those invested in Africa Bank. And the risk of inflation in those low return accounts is a guaranteed. A return of 4% with inflation sitting at around 6% means you are going backwards.

Thanks for this. Going to look into these funds and do some careful thinking. Hope you don't mind if I PM you a little later this week.

 

[Dubes]

Thanks for this. Going to look into these funds and do some careful thinking. Hope you don't mind if I PM you a little later this week.

No problem at all, I'm more than happy for you to PM me. Remember that was just a random choice of funds to give you an idea of what is available, there are plenty out there. Also on different platforms.

 

[Topdoggdbn]

Any reason they didn't cancel it?

No idea, they were supposed. took ref for call to make sure etc. after receiveing the 3rd statement last week I meant to follow up this week but maybe next week will call and find out.