Credit cards are quite convenient because they allow you to conveniently meet your urgent financial needs without carrying money around. You can use your credit card to purchase almost anything, but that does not mean you should purchase anything.
Credit cards are ideal if you are always in control of your spending. Unfortunately, you may get tempted to spend on things that you do not afford, and those are the ones that may mess up your credit score and plunge you into more debt. Impulse buying is the reason many Americans are knee-deep in debt. Here are some of the purchases that you should not make with your credit card.
Bulk purchases that you cannot afford
If you use your credit card to pay for goods or services that you cannot afford, you are using your credit card the wrong way. Affordability, in this case, means being able to make that purchase without disrupting your ability to afford other things. For example, if your salary is not enough to cover that purchase, you cannot afford it. Avoid using your credit card to cover the following:
- Student loans
- Vacation
- Tuition
- Down payments
- Paying off property taxes.
- Purchasing a vehicle
Apart from the affordability aspects, it would help if you also avoided such major credit card purchases because they feature hefty transaction charges that add to your debt.
Do not use a credit card to pay for something you cannot pay off quickly.
There are items that many people usually pay off with credit cards, but this should be determined by what you can afford. For example, Do not pay off something with a credit card if your salary is small and you cannot quickly pay off that product or service.
Do not use your credit card to pay off other debts.
Paying off one credit card debt using another credit card is the equivalent of shifting the goalposts. It will not eliminate the problem. In any case, it will make it even worse because now you have to cover the costs and charges in the card used to pay off the other card. The right approach would be to use a balance transfer credit card to consolidate your credit card debt, making it easier to pay it off.