9 Times You Shouldn’t Use Your Credit Card

“Handle with care.”

Every credit card should come with this warning. Those small, seemingly innocent pieces of plastic can get you into a world of financial trouble if you don’t make wise choices about when and how often to use them. Sadly, however, too many of us treat credit cards as tools to buy items that are out of our reach financially or even everyday items that would be best paid for in cash.

And when the credit card bill comes, those big-ticket items and small, seemingly insignificant indulgences will have to be paid for – along with the inevitable interest fees tacked on.

Talk about buyer’s remorse.

To avoid finding yourself in this tight spot, here are nine things you should never pay for with your credit card.

1. Down payments. When you’re getting ready to finance a big-ticket item like a house or a car, putting your down payment on a credit card is just a bad idea. After all, you’re already signing on for a payment plan that will include interest payments, so the last thing you want to do is pay additional interest associated with your down payment. Honestly, if you’re thinking of going this route, you probably shouldn’t be making the purchase at all.
2. Startup business costs. Getting a business off the ground can take years – if you’re successful at all. It’s a risk, so why put yourself in more financial danger by charging your initial costs? Better to save up what you’ll need in the beginning and get a smart start to your fledgling venture. If you truly can’t get the cash together, consider a small business loan. Those typically offer much lower interest rates than credit cards.
3. Household expenses. How can I put this delicately? If you can’t afford basic expenses, you definitely can’t afford the extra interest fees that will add up every month you don’t pay your balance in full. If you find yourself in this situation, it’s time to get thrifty and get creative. Cut any non-essential expenses like cable, gym memberships, and dining out. Sell what you don’t need, and consider getting a side job or picking up extra shifts if that’s an option where you work.
4. College tuition. There’s no reason to turn to a credit card if you can’t make your tuition obligations. The good news is that, in this case, you really have options. Your school’s financial office can advise you on low-interest student loans, scholarships, work-study programs, and grants.
5. Student loans. Like with tuition payments, you have alternatives to credit cards. Contact your lender and look into options such as income-based repayment plans, deferment or even loan forgiveness.
6. Taxes. Although it’s technically legal to pay your taxes with a credit card, your payment processor will probably charge you a convenience fee of around two percent to do so. It might not sound like much, but when it comes to paying the government, do you really want to pay any more than you have to?
7. Sweet treats, coffee breaks, and impulse buys. A quick stop at the convenience store for a chocolate bar. A cute purse you spotted in the accessories aisle while grocery shopping at Walmart. An ice cream cone at the local fast food joint to satisfy a sudden craving. All these small purchases are often made on a whim – but really add up on a credit card statement. If you can’t resist these temptations, at least resist the urge to pull out the plastic. It’s rarely worth the cost.
   
8. Credit card cash advances. Have you ever looked at the interest rates attached to these transactions? They are usually in the range of 23 percent – or higher! – and often come with an additional transaction fee. Just say no!
9. Medical bills. Nothing can sting more than sky-high costs for necessary medical treatment. However, this doesn’t mean you need to resort to credit cards. Contact your health care provider’s billing department, explain your situation, and work out a payment plan. Doctors and hospitals want to get paid! They’d rather help you do so over time than risk you defaulting on the cost and having to seek legal recourse.

Credit card debt is tough enough, so don’t make things harder on yourself by using your credit cards unnecessarily. Responsible credit card use can help pave the way to other smart money moves such as proper budgeting and planning for long-term savings goals. If you need help getting started on any of these, the team at DebtGuru.com is ready to help.