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10 Things You Should Never Put on Your Credit Card

Better Off With Debit

Plastic certainly isn’t for everybody, and it also shouldn’t be used for everything. In fact, it’s generally a good idea to never charge what you can’t pay off at the end of the month. Of course, not all credit indiscretions are created equal and there are definitely some items that you should keep off your statements at all costs. Here are 10 purchases you should never charge, no matter how enticing those rewards points may seem.

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Mortgage Payments

It’s really not a good idea to pay one expensive debt off with a payment method that can directly lead to another debt. “You’re robbing Peter to pay Paul,” says Curtis Arnold, founder of CardRatings.com.

Many mortgage and auto loan providers won’t allow borrowers to pay with a credit card, but there are third-party services that will help cash-strapped consumers charge major loans, like mortgages. These services generally charge hefty fees, Arnold says, which furthers contributes to potential financial disaster.

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Medical Bills

You may not have enough money on hand to pay for a large medical expense out of pocket, but that doesn’t mean you should whip out your credit card since the interest rate associated with it will only make the bill all that more expensive.

“If you contact the hospital, you can get on a payment plan,” says Chris Mettler, founder of CompareCards.com. These payment plans are generally cheaper than what you would be paying out in interest rates. And if they’re not, Mettler says, it’s likely you can negotiate the institution down.

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Taxes

Taxpayers can pay Uncle Sam with a credit card, but they’ll have to pay your tax service provider a convenience fee to do so. This convenience fee ranges from 2% to 3% of what you owe and can make it 10 times harder for someone to pay their bill back before incurring high interest charges on the tax dollars.

Additionally, charging your taxes “makes you look risky to an issuer and you can hurt your credit score,” says Ben Woolsey, director of marketing and consumer research with CreditCards.com. “The IRS has better alternatives in terms of payment plans.”

You can find out more about these options in this MainStreet article.

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College Tuition

More often than not, those who elect to charge their college tuition are not going to be able to pay that month’s balance off in full and incur interest on the charges. Additionally, some colleges who accept credit will charge a processing fee between 2% and 3% of the tuition payment.

Woolsey says students are better off pursuing alternative payment options. This includes low-interest student loans, grants, scholarships or work-study programs that can help you finance your education.

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Money Orders

Charging alternate payment methods, like money orders, foreign currency or person-to-person payments, is costlier than it may appear because issuers consider this to be a cash advance, as opposed to a purchase, Arnold says.

Cash advances not only incur a fee (typically around 3% of the cost), but they are also subject to a different interest rate, which can be anywhere from 1.5 percentage points to 8 percentage points higher than your purchase APR.

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Bail Bonds

A bail bond will also be considered a cash advance by the credit card company and incur the fee and the higher interest rate associated with one.

“Anything treated like a cash advance you definitely want to avoid at all costs,” Arnold says.

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Gambling-Related Purchases

Woolsey says “anything gambling-related,” including lottery tickets and casino chips, is also a bad idea to put onto plastic, since it makes it all too easy for you to run through funds.

“Some cards do exclude it,” he says. However, if your card does allow you to purchase these items, they too will be considered cash advances. The high APRs and fees associated with financing your gambling habit will merely increase the likelihood of additional financial troubles down the road.

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A Bill You Are Paying By Snail Mail

It’s not a good idea to include your credit card information on the printed materials some service providers (such as hospitals) give you to pay a bill via snail mail. This is because you’re leaving yourself way open to fraud, according to CardRatings.com.

But you shouldn’t use cash either, since that can easily be stolen, or a debit card, which actually carries less fraud protection than its credit counterparts. Instead, either pay the bill online or over the phone or send it via the post office directly.

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A Big, Fat Wedding

If you can’t afford to pay for that three-tiered wedding cake in cash, you probably should just settle for a smaller size. Wedding expenses are not something you should keep putting on your credit card, perhaps for obvious reasons.

“Many people get carried away,” Woolsey says. “But you don’t want to be starting your married life off with a bill.”

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Charitable Donations

Lastly, Arnold cautions consumers from charging charitable donations to their credit cards, which is becoming increasingly common these days as credit card readers that link to smartphones make it much easier for organizations to take on-the-ground donations via plastic. Technically, you’re making a donation with the bank’s money, not your own when you do this, and you don’t want to incur interest on what would have otherwise been a small charge.

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9 Things You Should Always Buy With Your Credit Card

Of course, there are other instances where paying with a credit card offers additional rewards, protections and perks other payment methods don’t feature. Check out which nine things you should always buy with your credit card in this MainStreet roundup!

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