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10 purchases you shouldn't make with your credit card

Here are 10 scenarios where it's best to keep your credit cards tucked away.

By MSN Money Partner Aug 11, 2014 12:15PM

This post comes from Allison Martin at partner site Money Talks News. 

Money Talks News on MSN MoneyMany credit cards offer a slew of incentives to consumers to use them -- cash back and other rewards -- and many protect the cardholder with zero liability in case of fraud. But credit cards are not always your best form of payment, and it sometimes may be in your better interest to keep them tucked away.

Credit card © Fancy, Veer, Corbis,Here are 10 purchases you should probably avoid making with your magic plastic:

1. Household bills

There can be a major problem with this approach for many people: If you are already cutting it close for the month, you may be tempted to take care of the utility, cellphone or cable bill, just to name a few, with the card. But if you're not paying off your full balance each month, the interest you'll be charged will make those monthly bills even more expensive.

If you are indeed responsible with your credit cards and are attempting to rack up rewards, this should be done at your discretion, but only if you have cash on hand to fully cover the transactions each month.

2. Cars 

Car dealers often don't allow this, or may limit the amount of the purchase price you can put on your credit card. The 1 to 3 percent fee from the card company to process the transaction will cut into their profit.

You could exercise the cash advance option. But you'd pay a fee and a higher interest rate and also get no grace period on the interest. It begins to accumulate right away.

Go to a credit union or a bank to get financing approved at a reasonable interest rate before you shop for a car.

3. Student loans

If you can't afford to pay your federal student loans, you have options like an income-based repayment plan, deferment, forbearance and possibly loan forgiveness. Take a look at "Finding help with your student loans" to learn more.

Paying your student loan debt with a credit card will only increase the amount of interest you’re paying on the debt. Even if you have a 0% introductory credit card offer, it will expire in time.

And while the federal government will accept a credit card payment for loans in default, many student loan servicers won't allow this form of payment.

Says, "Shifting student debt to credit card debt rarely makes sense financially, and if you go into it thinking you may eventually discharge the debt in bankruptcy, you're at best betting on yourself to fail, and at worst, committing fraud."

4. Retail therapy

Think a new purchase will cheer you up? Cash is king in this case so your credit card balance won't spiral out of control. Plus, keep in mind that the positive feeling you get from buying something is usually short-lived.

5. Medical bills

Last year the Consumer Financial Protection Bureau ordered one of the providers of medical credit cards to refund $34 million to customers after it accused the company of deceptive enrollment practices. If you use a medical credit card available through your health care provider's office to pay your bills, be careful to read the fine print about your obligations.

Better yet, talk to the provider about working out a payment plan.

Also consider steps you can take to reduce your health care costs. See "10 ways to fight high medical bills."

6. A night on the town

Handing your credit card to an unscrupulous waitperson equipped with a skimming device isn’t the only thing you need to worry about. If you're out on the town throwing back drinks, it's very easy to run up a tab you really can't afford.

In these scenarios, it's best to pay with cash and save yourself remorse.

7. Big-ticket items that you can't immediately afford to pay off

I am well aware of the purchase protections that accompany many credit cards, and credit cards should be used for big-ticket purchases. But buying something on credit when you can’t afford to pay it off right away isn’t smart for a number of reasons, a high interest rate and a risk of a late payment or default are just a few.

8. Credit card payments

You can't charge your monthly credit card payment on another credit card. But perhaps you've been tempted to use a cash advance from a credit card to bolster your checking account so that you can pay your other bills. We've already explained how cash advances work. Your credit card is not an ATM and should not be used as one.

There are real benefits, however, to transferring high-interest credit card debt to a new card with a generous 0% balance transfer offer. Just be aware of the balance transfer fee and the length of the offer, and decide if it makes financial sense.

9. "Sale" items

Convinced that you may miss out on savings if you don't purchase a specific item on sale right away? That’s one of the warning signs of an impulse buy. Wait a day and think about whether you really need it; nine times out of 10, the answer will be no.

You aren't really saving money if you’re spending money for something you don't need, and buying with a credit card makes the transaction even easier to digest.

10. Unsecured online purchases

Does the Web address have an "https" at the beginning? If not, that's your cue to take your online shopping elsewhere. In fact, do your homework before you purchase anything online to make sure a company is reputable and not the source of many consumer complaints.

Your credit card should be perceived as a last-resort safety net. It's up to you to be a cautious and knowledgeable consumer.

What purchases do you refrain from making with your credit card?

More from Money Talks News

Aug 11, 2014 1:48PM
It really depends on your individual personality and your financial situation.  We charge everything that we can charge, and we pay our entire bill off every month.  We get a 1% to 5% cash rebate on every purchase.  Over the years that has amounted to 10s of thousands of dollars in rebates.  But you do have use self discipline to use your charge cards only for what you really need.
Aug 11, 2014 2:28PM

how many times does msn have rehash these same articles.

I guess they are just like hollyweird rehashing the same movies.

I guess they are just like the music industry rehashing the same "beat" to every song.

but I digress (ya look it probably don't know the meaning)!!

I use my cc to buy 99% of purchases...including my medical bill, my cell bill, my satellite bill, my car insurance, etc. 

WHY???  because I'm one of the (less than) 5% that pays the bill off every month.

Plus...I also get money back on all my purchases....

Aug 11, 2014 2:00PM
I have been seeing more and more signs in establishments that they do not accept personal checks or - believe it or  not - CASH!  That leaves you with debit cards and credit cards.  Whether you are using a debit card or credit card, stay on top of your balances - spent and available.  In today's world, you must develop and exercise self-discipline and self-restraint when it comes to your spending by plastic.  Too many people spend it until its gone (cash and credit) and don't think about tomorrow, next week, next month, next year.  And, that's what gets them in trouble.  I have a thirteen year old grandson who is the most frugal person I've ever known.  He would rather have a dollar in the bank than a burger in his belly.  More people need to develop this discipline.
Aug 11, 2014 3:10PM
Um....medical bills.  Took my husband last week for a p.e.t. scan, our co pay was $200, I asked the clerk what would happen if we didn't have the $200 and she said my husband's appointment would be canceled and my husband would be turned away.....well, out comes the credit card, no choice sometimes. (He has stage 3 lung cancer)
Aug 11, 2014 3:41PM
I also use my credit card for everything to get points, and pay it off in full every month.  But if you are using it for actual credit, stay away and pay cash. 
Aug 11, 2014 3:28PM

I used to avoid using credit cards except to hold hotel rooms, but not any more.

I use a cash back (usually 1 to 5%) credit card with no annual fee.  I purchase through a buyers club and get 5% (but around Christmas as much as 15%) rebated while purchasing through the big box and other stores.  I pay my bill in full each month. 

The result is a nice check back (about $1000.00 each year). 

Aug 12, 2014 12:26AM
The Kardashian's-what a great argument for forced sterilization !!!!!
Aug 11, 2014 1:29PM
Number four should have read, retail therapy in Las Vegas.  
Aug 12, 2014 8:03AM
Thank you for putting this all on one page.
Aug 11, 2014 6:28PM
I make charges like these all the time. But I also pay off the card every month. I get the cash back benefit and I've never paid a cent in interest.
Aug 11, 2014 5:58PM
My local call girl accepts credit & debit cards. She gives a 10% discount if paid in cash. I usually pay her in cash. 
Aug 11, 2014 4:07PM
Car dealers will take a credit card if he wants to sell a car.. CC is a great negotiation tool to get that last 1-3% down. But, one must have $$ to pay the bill in full.  CC will work, I know I have done so.
Aug 12, 2014 8:04AM
In general, good advice all around, but really kind of common-sense sort of stuff.  I'd hope people already knew most or all of these.
Aug 11, 2014 2:58PM
Why do they mention online purchases & not mention using virtual account numbers?
Aug 12, 2014 9:03AM
I totally disagree with this article.  I have often charged many of these "don't" items on my credit cards and have earned up to 5% cash back by doing so.  I ALWAYS pay off the amount du each month.  By doing this I actually save money.
Aug 11, 2014 6:51PM
One of the benefits of running up credit card debt is that it can be discharged in bankruptcy. Buy now, file for bankruptcy later!!  This is the American Way. 
Aug 16, 2014 8:43PM
This article is ridiculous if you get cash-back and pay your entire statement balance each month and monitor your spending so you don't overcharge.

1) I get 2% cash-back for medical and prescription credit card charges.

2) I paid $15,000 by check and $3000 by credit card for a new car.  When the statement came due, I paid the balance off in full and got $30 cash-back.

3) I get 1% cash-back for household bills.

4) a night on the town?  I get 2% to 5% cash-back for restaurants.

I used to have some paid through my checking account and changed them to credit card. Getting $25 cash-back for $2500 in gas/electricity bills may not seem like much but when you're getting 2%-5% for gasoline, 2% for restaurant and drugstore, and at least 1% for all your bills it adds up into the hundreds for an avg. person.

Aug 15, 2014 7:17PM
Those responsible with money use credit cards as a free accounting service. Actually, a free, cash-back accounting service with free, additional protection on purchases. From one decade to the next, they pay less than nothing for this use of credit cards, due to the cash-back feature on the cards they carry.
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