14 Things to Avoid Charging to a Credit Card

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Credit cards can make everyday spending easier, from online purchases to monthly bills. But not every expense belongs on a card, especially when interest, fees, or long-term costs come into play. Some purchases may feel harmless in the moment, but can end up costing far more than expected.

Below are 14 things you’re better off avoiding when it comes to charging them to a credit card.

Cash Advances

Cash advances are when you withdraw cash from your credit card at an ATM or bank. While they may seem like a quick solution to a cash shortage, they come with high fees and interest rates. The interest rate for cash advances is typically much higher than the regular purchase APR, and there is usually no grace period, so interest starts accruing immediately.

Gambling

Using your credit card for gambling is a dangerous game. Most credit cards also treat gambling transactions as cash advances, which means high fees and interest rates apply. Plus, if you fall into debt from gambling, it could negatively impact your credit score.

Mortgage Payments

Paying your mortgage with a credit card might seem like an intelligent way to rack up rewards points, but many lenders don’t accept this form of payment. If they do, additional fees may be incurred that outweigh any potential rewards. Plus, missing a payment or failing to pay the full balance could result in late fees and damage your credit score.

Related: 17 Frugal Ways to Stay Warm This Winter Without Raising Your Energy Bill

Student Loans

Paying off student loans with a credit card can come with extra fees and potential damage to your credit score. Additionally, most student loan providers do not accept credit card payments, so it may not even be an option for you.

Taxes

Paying taxes with a credit card may seem like a way to earn rewards, but the convenience comes at a high cost. The IRS charges processing fees for credit card payments, which can add up quickly. If you don’t pay off the total balance on time, interest will accrue and potentially hurt your finances in the long run.

Medical Bills

A credit card might seem viable if you’re struggling to pay medical bills. However, many healthcare providers offer payment plans and other options that don’t come with high interest rates or credit card fees.

Rent

Paying your rent with a credit card may be tempting, especially if you’re short on cash. But most landlords don’t accept this form of payment or charge additional fees for it. Plus, missing a rent payment could result in late fees and damage your credit score.

Large Purchases You Can’t Afford

Credit cards can make expensive purchases seem more manageable, but it’s essential to consider the long-term cost. If you can’t afford to pay off the balance in full at the end of the month, you’ll pay more in interest than the item’s original cost. It’s best to save for expensive purchases or consider other financing options with lower interest rates.

Unnecessary Subscriptions

Subscribing to services or memberships you don’t need can quickly add up and lead to debt. Review your subscriptions regularly and cancel anything you’re not using or can’t afford to keep.

Impulse Buys

Using a credit card for impulse buys can make it easy to overspend beyond your means. It’s essential to stick to a budget and only use your credit card for planned purchases you know you can pay off at the end of the month.

Non-Refundable Purchases

Using a credit card for non-refundable purchases can be risky. If you want to return or cancel the purchase, you may not get your money back if it was charged to your credit card. Always use a debit card or another payment method for non-refundable items.

High-Risk Transactions

Certain high-risk transactions, such as buying foreign currency or investing in cryptocurrency, should not be made with a credit card. These transactions often come with additional fees and can also trigger fraud alerts from your credit card company.

Buying Items You Can’t Insure

Some credit cards offer insurance coverage for specific purchases made on the card. But if you buy an item that isn’t eligible for insurance, you won’t be able to protect your purchase if something goes wrong. It’s best to use a different payment method for these items.

Peer-to-Peer Payments

Sending money to friends or family through peer-to-peer payment apps may seem convenient, but it often incurs fees when paying with a credit card. Consider using a debit card or bank transfer instead to avoid unnecessary charges.

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