10 Purchases You Shouldn’t Make With a Credit Card

Credit cards offer many conveniences and protections, but there are times when it’s best to keep the plastic tucked away. Here are 10 such scenarios.

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Many credit cards offer a slew of incentives to consumers who use them — from cash back and other rewards to zero liability in case of fraud.

But credit cards are not always your best form of payment, especially if you aren’t great with debt. In many cases, you are better off keeping the plastic tucked away.

Here are 10 purchases you should probably avoid making with your magic plastic:

1. Household bills

If you are already cutting it close for the month, you may be tempted to use plastic to pay the utility, cellphone or cable bill. But if you’re not paying off your full balance each month, the interest you will be charged makes those monthly bills even more expensive.

2. Cars

Car dealers often don’t allow credit-card purchases, or may limit the amount of the purchase price you can put on your card. Dealers don’t like credit card payments because they have to pay the 1 to 3 percent fee the card company charges to process the transaction

You could exercise the cash advance option. But you’ll pay a fee and a higher interest rate. Also, you won’t get a grace period on the interest — it will begin to accumulate right away.

Instead of using a card, go to a credit union or bank to get financing approved at a reasonable interest rate before shopping for a car.

3. Student loans

If you can’t afford to pay your federal student loans, you have options, such as an income-based repayment plan, deferment, forbearance and possibly loan forgiveness. Take a look at “Finding Help With Your Student Loans” to learn more.

Paying your student loan debt with a credit card increases the amount of interest you’re paying on the debt. Even if you have a zero-percent introductory credit card offer, it will expire in time.

And while the federal government will accept a credit card payment for loans in default, many student loan servicers won’t allow this form of payment.

4. Retail therapy

Think a new purchase will cheer you up? Perhaps. But remember that cash is king if you choose this mode of “therapy.” That way, you won’t let your credit card balance spiral out of control.

5. Medical bills

If you use a medical credit card available through your health care provider’s office to pay bills, be careful to read the fine print about your obligations.

Also consider steps you can take to reduce health care costs. See “10 Ways to Fight High Medical Bills.”

6. A night on the town

Handing your credit card to an unscrupulous waitperson equipped with a skimming device isn’t your only worry. If you’re out on the town throwing back drinks, it’s easy to run up a tab you can’t afford.

In these scenarios, it’s best to pay with cash.

7. Big-ticket items you can’t pay off immediately

Credit cards offer great purchase protections and should be used for many big-ticket purchases. But buying something on credit when you can’t afford to pay it off right away isn’t smart.

8. Credit card payments

You can’t charge your monthly credit card payment on another credit card. But perhaps you’ve been tempted to use a cash advance from a credit card to bolster your checking account so that you can pay your other bills.

We’ve already explained the folly of cash advances. Your credit card is not an ATM and should not be used as one.

There are real benefits, however, to transferring high-interest credit card debt to a new card with a generous zero-percent balance transfer offer. Just be aware of the balance transfer fee and the length of the offer.

From our Solutions Center: Find a better credit card in seconds

9. ‘Sale’ items

Convinced that you may miss out on savings if you don’t purchase a specific item on sale right away? That’s one of the warning signs of an impulse buy.

Wait a day and think about whether you really need the item. Nine times out of 10, the answer will be “no.”

You aren’t saving money by spending it for something you don’t need.

10. Unsecured online purchases

Does the Web address have an “https” at the beginning? If not, that’s your cue to take your online shopping elsewhere.

In fact, do your homework before purchasing anything online to make sure a company is reputable and not the source of many consumer complaints.

What purchases do you refrain from making with your credit card? Let us know in the comments below or on our Facebook page.

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  • Dale

    Rewards were the reason I liked to use my debit cards to pay bills – of course, some bureaucrat did away with those perks. Debit cards are a good option because you can’t spend more than you have on deposit. It can be a humbling experience to get your debit card declined for a $20 dollar utility bill because the gas station took $90 bucks from your account for ten dollars of gas!

  • LovestoEat

    I beg to differ on at least one of these instances using your credit card to make a purchase. I had cash in the bank to use for my down payment of $7,000. towards my new car. I opted to use my cash-back reward credit card instead, which the auto dealer said they would not accept. But…when I told them I was no longer interested in the deal and started to leave they suddenly decided to accept my credit card for the down payment. Hence, I earned a tidy sum on my cash-back using my credit card and went home with my new car and promptly paid my credit card balance off so I did not incur any interest.

  • senior3citizen

    Since debit cards are not safe to use on the internet, I use my credit card for all purchases-including utilities, medical bills, etc.- then transfer that money from my checking account to the credit card account – that is instant payment. Being able to check your credit charges within hours of posting and can catch a possible fraud charge I consider less of a hassle than trying to deal with a possible fraud debit charge. I do not write checks – I use “Bill pay” and in some instances it takes longer to post and can cost you a late charge. With thieves hacking ATM’s, and some retailer’s not having proper safety measures debit cards are not safe these days.

    • ModernMode

      I don’t do any online banking or bill pay. Hardly a month goes by without there being a new hacking scandal with millions of accounts hacked. I stick to paper checks for paying bills whenever possible and have never had a problem.

      • Jason

        Despite the news headlines about hacking, the majority of theft is done the old fashion way: a waiter or waitress copies down your information directly from your card. Everything they need is right on the card. I purchase quite a bit online with credit card and use online bill payment and have never had a problem.

        The only time I’ve had my credit card information stolen was a card that I never used online. The bank froze the card on the 3rd unauthorized purchase and contacted me. I verified the purchases were fraudulent and the card company sent me a new card next day air. I wasn’t responsible for any charges and it only took about 10 minutes of my time.

  • Malcom Treadway

    My credit card is my bank. I use their money for an extra 25 days. I earn a few bucks back for what I charge. I always take that modest sum and apply it to my outstanding balance as a credit. I put virtually everything – recurring household bills, gasoline, groceries, you name it – on my card. I have a budget. My monthly income stays in my bank account, where it earns (a paltry .75%) interest. When the credit card payment is due, I pay it off completely. It’s all about perception and concept: just don’t treat your credit card as though it is “money” above and beyond your actual income. It isn’t.

    • Joseph Freitas

      There is no reason to not use your credit card to make payments that you could have made with cash or check. Like utility bills, etc. Free 25 days of interest, fraud protection, rewards, tracking.
      @Moneytalks – Who reviews these articles?

      • Malcom Treadway

        They’re written for the bottom rung of their target audience.

      • bethaliz6894

        This works for responsible people like us that pays the credit card bill in full every month. Its the people that think “Free cash” are the ones this article is written for. I charge everything. Between cash back and no interest and amazon using cash back awards, I make money shopping. :)

  • Patrick Seitz

    Another good reason, I think, to not put college on a student loan is that a lot of times the interest on student loans is tax deductible. The interest on credit card debt is not.

  • bigpinch

    I have an exception, too. When my only automobile died I had to replace it, immediately. Living out in the country, there is no public transportation option. The best deal I could make with the dealership on a two-year old truck was 8% interest. Since I had carried a zero balance on my four credit cards, I got a lot of promotional rates for cash loans from them.
    I took advantage of one such promotional loan and transferred the balance on the truck to the card at 3% interest for the life of the loan. I put pencil and paper to the deal and saw the advantage before I jumped at it I’d already figured out that I could afford the monthly payment at the dealership so when the interest rate got lowered, instead of taking a lower monthly payment, I increased the monthly payment to the card a little bit and was able to pay the truck off sooner. An unexpected advantage was that money I’d paid on the 8% deal which was a loan “insurance” was refunded to me in cash by the insurance company. And, btw, 10 years and 140,000 additional miles later, I’m still driving the truck and haven’t had a car payment in a long time.

  • Kathy Bergquist

    I receive 0% interest offers all of the time from credit cards. I only take advantage of them when I need to. About four years ago I was in pain but the doctors were at a loss for 6 months what was causing it. I have insurance; its pays 80/20. The $25 dollar co-pays were adding up fast. I knew this pain was going to cost me so I accepted one of the credit card deals. Thank god I did. $3000 would have cleaned my savings out and then some.

    I felt so good after my surgery four months later, I took advantage of another credit deal from Menard’s, also 0% interest, and changed my flooring from all carpet, including the bathroom (yuck!) to laminate tile and replaced my bathroom sink. I ripped out the carpet myself. The surprise costs was replacing the sub-floor in the bathroom and the out-pipe for the toilet. That totaled over $2000 on the credit cards-supplies for the floor and the bathroom sink and the rest for the plumber. $1000 out of pocket for the guy that did the floor work
    Hopefully, I will be able to use another credit card deal for the house damage from the hail storm I had in June. I already have the insurance money sitting in my credit union collecting interest.

  • Al Seaver

    I use my c.c.’s for everything possible as I get cash back on them and I pay my charges in full every month. Getting something back trumps getting nothing back every time. If you can’t or don’t pay the cards off every month, that’s your problem.

  • TWL

    Re: #6 handing your card to a waiter who takes it “somewhere” to swipe. They not only could have a skimming device, they could take a pic front and back and have all your info by more traditional means available in everyone’s pocket. We were in South Africa and at every establishment they bring a credit card swipe device to the table so the card never left our sight. Seems this offers a bit more protection. Why isn’t this the practice in the U.S.A.?

    • Jason

      Tradition and the fact that the rest of the world used chip technology that requires the user to enter a pin number.

  • Lynda Belltinker

    Would have liked to see a bit more explanation on this one… If I’m going to have the medical expense, and it gets paid off monthly without carrying a balance, I’d much rather use somebody else’s money and reap the rewards.

    5. Medical bills

    If you use a medical credit card available through your health care provider’s office to pay bills, be careful to read the fine print about your obligations.

    • cvincent

      I believe the writer was referencing credit cards issued through your medical provider which many times have much higher rates and may have sketchy fine print obligations that are not standard, e.g. – method of calculating interest, grace period, late fees, etc.

      • Lynda Belltinker

        Thanks, cvincent. That would make sense… :)

  • Rich Logan

    I totally disagree with MOST of their advice; I use credit cards EVERYWHERE and for EVERYTHING I can! But I am also disaplined enough to pay them off every month as well – and reap the benefits of paying for everything by credit card…house bills, medical bills, utility bills, etc. I also paid $5k on one of my credit cards….for a car (that is all they would allow me to!); bottom line is proper discipline- just like everything else in life!

  • Vince Ryder

    I try to use cash when frequenting small independent businesses (mom & pop type) because such places (to me) seem to have the odds stacked against them (franchise competitions, overhead, etc.). I try not to shave their profit by using the card. On the other hand, when I am getting up to 5% cash back for groceries, gas, etc., I make use of the card every time. The key to using credit is knowing how much you are spending and how that compares to the money you have on hand to pay the bill in the following month. I’ve known two types of people through the years who can’t handle credit cards: 1) those who use them anyway and sprint toward a combination of wage slavery/bankruptcy, and 2) those who refuse to use them at all, because they know the slippery slope to which they may fall victim. The latter type may miss out on the card convenience and cash back deals, but that’s certainly preferable to not controlling their spending like the former.

  • hlc

    So what’s left? Long story short, don’t use credit cards?

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