In today’s fast-paced and sophisticated lifestyle, nearly everyone relies on credit cards for charging such items as the cost of purchases, recurring monthly payments, restaurant meals, and entertainment tickets. Many consumers make charges every day to their current charge card accounts. However, there are certain specific charges and fees you never want to put on a credit card, including:
1. Mortgage Payments. – It is a common practice of mortgage and other loan companies to refuse scheduled payments from borrowers made by credit cards. When this payment method is rejected, some borrowers seek financial assistance from third-party loan agents and hard money lenders to meet regular mortgage payments. However, these lenders usually charge substantial fees and interest rates. When borrowing from them, homeowners can easily become seriously overburdened with debt. Many borrowers learn through experience that it is never a good idea to risk increasing your total amount of ongoing debt in order to make payments on a currently existing debt.
2. Taxes. – Although the IRS and most US state tax departments accept credit card payments for tax bills, using your charge cards for this purpose is not recommended. First of all, third-party payment processors impose fees of up to 2.35 percent for such charges. It is much better to choose a payment plan offered by the IRS or your state tax department at a much more reasonable rate of interest. In addition, you can avoid accruing tax payments for the next tax year by changing your withholding status to eliminate underpayments.
3. College Tuition. – Many adults find themselves carrying college tuition debt for many years. With rapidly compounding interest rates, modest entry-level job salaries, or work lay-offs, paying off tuition debts can become extremely difficult, even over time. By securing student loans with low interest rates, scholarships, and part-time employment during college, students can prevent huge, daunting tuition debt payments later on in life.
4. Extravagant Weddings. – Although weddings of all types and sizes can be costly, it is always best to resist the temptation to finance this special occasion with a credit card. After all, you want to start a married life without the stress of heavy debts and demanding payment dates. By using savings or less expensive loan options, you and your spouse can have a much better start to your new life together.
5. Luxurious Vacations. – When planning vacations, look for acceptable discounts and bargain rates on transportation, hotels, meals, and activities. Save money ahead of time so you can enjoy your trip thoroughly without overspending and accruing large debts.
6. Medical Bills. – If you are uninsured or require medical treatment with costs way above your current health insurance or budget allowances, look for reasonably priced treatment options whenever possible. Many medical centers and physicians now offer payment plans to patients who are unable to pay bills in full. Always try to refrain from using your credit cards to pay your medical bills so you can avoid extra debts.
7. Gambling and Lottery Costs. – Whether you are purchasing casino chips or lottery tickets, do not charge them to your credit cards. If your cards do allow these items to be charged, the amounts you charge will be treated as cash advances with high interest fees.
8. Donations to Charities. – Especially since many modern charity donors make their contributions via the Internet on computers, tablets, or mobile phones, they often place these charges on their credit cards. However, this is not a good practice since the amount of your initial generosity as a donor can grow by leaps and bounds due to card interest rates and fees.
9. Money Orders and Foreign Currency Exchange. – Charging the cost of money order purchases and foreign currency exchanges to your credit card is too expensive to be practical since both will be deemed cash purchases by your credit card company, accruing high fees.
10. Bill Payments You Send by Snail Mail. – Sending your credit card numbers and related personal information to bill payment centers by snail mail is risky and can result in fraud. It is safer to make these payments by phone, online, or by mailing paper checks when possible.
In our busy worldwide societies of constant consumer purchasing and bill paying, the use of credit cards has become an everyday convenience and necessity. It is crucial to your financial well-being as a consumer, however, always use your cards carefully and wisely.
Author Bio Box:
Blair Thomas is an electronic payment expert, who loves all things finance and planning. He is also the co-founder of eMerchantBroker.com, the #1 high-risk processing company in the country. But when he’s not running his business he’s more than likely exploring his other passions; mountain biking and camping. If you would like to see what he’s up to, like him on Facebook.