Credit cards could be a bad thing and a good thing all at the same time. It is a handy tool for handling big purchases that you need to make, but cannot afford to do at that immediate time. It is also a good way to not have to carry cash on you all of the time. However, credit cards put you more at risk for being in debt. You could possibly end up spending a lot more than you can afford to pay back. High interest rates start to build, and your inability to handle payments can cause missed payments and the addition of late fees. It may seem that credit cards can get you into more trouble than anticipated, and there are actually situations where you should not pay with a credit card. Keep reading for the places where you would cost you more when using a credit card.
Handling Business with Credit Cards
Sometimes when you take care of certain expenses, you should not pay with a credit card. Here are some expenses you should not take care of with your credit card:
· Your Income Taxes
It may seem easier to take care of federal tax payments if you pay with a credit card. However, doing so could result in third-party convenience and processing fees through the IRS. An option to consider instead of using a credit card would be to write a check.
· Paying For Parking Tickets
Parking tickets are something you can avoid, but sometimes you are not even aware that you are at risk for a parking ticket until it is too late. However, it is recommended to not pay with a credit card to take care of the ticket. Using a credit card can make your ticket more expensive by the addition of municipal and processing fees. It is better to use a check or cash to pay it.
· Paying Your Rent
Another situation where you do not want to pay with a credit card is when you are paying your rent. Typically, when you use a credit card, you end up having to pay a convenience fee. This is a fee that cannot be changed regardless of the payment you are making. Instead of using your credit card, it is best to write a check, pay in cash and get a receipt, or pay using a debit card.
· Paying College Fees
It is no question that college costs can get very expensive. Although you may be tempting to use a credit card to cover the costs, you may be disappointed at your ability to do so. Most colleges do not accept credit card payments because the processing fees are too high. You may also be required to pay a surcharge if the college accepts credit cards. Your best option is to pay by check or take out a loan to cover the costs instead of your option to pay with a credit card.
Having Fun with Credit Card
There are times where going out and having fun with family, friends, or even by yourself will cost you money. Here are some fun outings that you should not use your credit card.
· A Trip to the Movies
To avoid long movie lines or the risk of tickets being sold out at the counter, you may find it better to purchase tickets in advance online. You may choose to pay with a credit card, but doing this could cause you to pay an extra convenience and processing fee. The best option to purchasing movie tickets is to get your ticket an hour or more in advance to avoid long lines and sold out tickets.
· Shopping at Small Stores
It is often that you may find using a credit card more expensive when you do it at a small retail or grocery store. This is why you should not get things from small stores and pay with a credit card. There is often a processing fee that merchants are required to inform you of so that you are prepared to pay them.
· Overseas Traveling
When you travel to another country, you may find that among your credit card fees will be a foreign transaction fee to be paid as well. This fee occurs with every purchase that is made in the foreign country. The fees can be as much as 3% of every purchase and each amount eventually adds up to a big sum by the time you are done spending. You can avoid this fee by using a credit card that does not charge a foreign transaction fee, or try using the country’s own currency to make purchases.
If you are unsure if you should use a credit card to pay for a particular item or to handle a certain financial situation, Lending Tree has some tips you can read on ways to use credit cards properly. Do not put yourself in financial jeopardy by misusing your credit card.