Credit cards are easy to come by and easy to use, but can easily get you into big trouble. We are heading toward a cashless society, and almost anything can go on a credit card these days. Because you can put stuff on your card doesn’t mean that you should anyway.
Credit cards can tempt you to spend money that you don’t own and stress you for a huge portion of your life! Life is too short to spend it agitating over debts that are hanging over your head and stealing your joy.
At the same time, credit cards are convenient and can offer easy operating processes. But here are six things you should never use your credit card to pay for.
6. Mortgage Payment
Although most home-loan lenders won’t accept credit cards as a mortgage payment, there are many third party money hackers who will happily assist in this area. For a hefty fee, of course.
If you go this route and cannot pay off your credit card balance at the end of the month, you will be compromising your mortgage debt and eliminating your available credit. This will impact your credit score.
If you are investing in a home, it means that you want to be comfortable. You probably do not want to be harassed by credit card companies looking after their bottom line. Make the correct decision that won’t leave you miserable.
What if you are slapped with a tax bill that you did not expect? The temptation may be there to use a credit card to pay, but it is best not to use a credit card for this expense. The Internal Revenue Service will charge you up to 2% for using money that you don’t have to pay your taxes. That should be a deterrent!
If you did happen to use a third party billing software, you end up paying even more. It is crazy to pay interest on taxes owed. We recommend that you consider instead, a short term personal loan from a lending agency. Or, you can ask the IRS to work out a payment plan for you.
4. Medical Bills
Health care costs keep escalating, no doubt. And yes, we all want the best health care possible. But using your credit card for a health emergency can set you back leaps and bounds.
Instead of running up your credit card balances because you may not be able to afford treatment, consider other options, such as other medical providers who offer low or no interest payment plans.
They can also negotiate with you for lower bills altogether. It is stressful enough to have to deal with health issues. You don’t want to compound your situation by adding other problems that will affect you mentally and emotionally.
3. College Tuition
This is a big no-no. Do not pay for education with credit! The interest in students’ loans will always be lower, which will be easier to pay off. That’s the option to pursue. The large charges on tuition fees will also raise your credit usage ratio if you use your card.
This can negatively affect your credit scores and mess up your future credit. Furthermore, universities and colleges generally add a processing fee of up to 3% to use credit cards for payment. Don’t be caught in their tangled web!
2. Big Ticket Items You Can’t Afford
There’s a golden rule to follow when you’re purchasing. Whatever you cannot pay off within a month, do not swipe that card for it. Figure out how much it will take to pay off that item at a zero interest rate.
Then open the new account that offers a 0% introductory rate for the set period and set automatic payments. It all comes down to your credit scores. You want to know that you can pay your monthly balances on time without pressuring yourself!
If you can’t afford an expensive item, sometimes you should wait until you can afford it at a later date. Remember, indebtedness affects your health negatively.
1. Stocks and Other Investments
There is such a high risk involved here it’s a bad idea altogether! Even big money spenders realize how dangerous this practice is. The stock market is never a sure thing, and gambling with credit is tempting but foolhardy. Marketwatch recently reported on a Canadian financial analyst who lost $10,000, using his credit card, trying to time the market.
He was knowledgeable about the stock market, and yet everything backfired on him. The $10,000 he lost was his savings, but what if he didn’t have money to back that loss? We recommend that you seek out other options to pay for your investments without using your credit card. You will be saving yourself a ton of trouble.
We hope you consider not using your credit card for the expenses listed. An up to date credit balance always augurs well for the future. The journey of life continues, with the financial aids offered to pave the way and make life easier, with more convenience at your fingertips. Being prudent with your credit card will make life easier and more fulfilling in the long run.