• In Case You Missed One

  • What’s in it for you?

    Custom Search
  • Get Published in 2016

    Submit your book proposal today! Submit your book proposal today!
  • Register Today!

  • Why Take The Chance At Missing One?

    Put in your email address to find out when a new post goes live on The M3 Blog!

    Join 266 other subscribers

  • What’s the buzz?

  • RSS for any Reader

    I heart FeedBurner

    FBFPowered by ®Google Feedburner

  • Like Red Dwyer on Facebook

    Red Dwyer - Author

    I want one for my trail! ... See MoreSee Less

    Please say something about this PHOTO. Nice job Share Share !

    View on Facebook

    A new way to look at an old favorite. ... See MoreSee Less

    Probably the coolest thing I've ever seen

    View on Facebook

    Would you be able to play on it? I want to try! ... See MoreSee Less

    The table is nice. It's from Obscura Digital!

    View on Facebook
  • Like the 5,000 page

  • Helping Keep the Power On

  • And Now For Something Completely Different.

  • Patriots & Ex-Pats

    Free counters!

Never Put This on Your Credit Card

Part VIII of the Credit Card Series: Start at the beginning if you missed a part. This is the end of this series.

Credit cards are convenient:

  • Track spending.
  • Categorize expenses.
  • Build credit score.
  • Safer than cash
  • Online spending

You cannot save money when you are paying interest. Conquering credit card debt is impossible if you are putting day-to-day expenses on your credit card.

What are some of the things you should never put on your credit card and why?

Utility Payments

You have this budgeted. It is an expense you must deduct before you know your personal savings. If you put it on your card, you are cheating yourself of two things: (1) The lowest payment for your bill (2) Actual ability to accommodate credit card debt.

Instead, draft the money directly from your checking or savings account. The draft will be inexpensive or free, depending on the handler of your utility’s bill payment website. Debit cards are a good alternative.

Insurance Premiums

Life, health, vehicle and homeowner’s insurances are designed to protect you against loss. In the case of the last three, many people will pay more in premiums than they will ever recover. This is an expense upon which you cannot afford to add interest. Use your debit card or online bank transfer, like PayPal.com.

Medical Expenses

Medical default is one of the largest categories of collection activity on credit reports. It is far cheaper to choose one of these before pulling out your convenient credit card:

  • Negotiate with your care provider for a payment plan befitting your budget.
  • Use your debit card or a check for out-of-pocket expenses.
  • Obtain a medical loan for large expenses, like outpatient surgery.
  • Use your emergency funds.

Loan Payments

You are compounding interest by paying interest on the interest from another loan. Remember, a credit card is a loan with a much higher interest rate. Many institutions prohibit paying loan payments with credit cards, but some finance companies still allow it. This is an expense which must come from your bank account.

Groceries

Amazingly, Americans use credit cards to purchase groceries. Groceries are a staple expense. Putting them on your credit card is courting disaster and a red flag you are living beyond your means.

Taxes

This is an expense which should be budgeted from your income as a monthly expense. If you have a hard time saving for your taxes, open a tax account with your financial institution. Most banks offer a no-fee account for saving for taxes.

The Only Exception

Most rules have a least one exception, and this is no different. If you are paying your credit card off every month, this rule does not apply to you because you are using your credit card only for its convenience.

Bottom Line

Putting these expenses on your credit card is dangerous to your credit health. Ask yourself, “How much debt is too much?” You run the risk of using budgeted money for leisure and consumer expenses you cannot afford. Keep yourself out of debt by parking the card and writing a check.

~~~~~~~~~~

The credit card poll ends today. Have you voted?


What expense do you never put on your credit card?

(c) Red Dwyer 2011
Re-Blogging of this or any other post on The M3 Blog
is expressly forbidden.
Copyright and Privacy Policy available in The Office. 



Spread the Love!

Pinterest



You know you want to share!


  • Add to favorites
  • Email
  • RSS
  • Tumblr
Content Protection by DMCA.com
Leave a comment

4 Comments

  1. Never Put This on Your Credit Card | Finance Made Personal | Scoop.it
  2. Saturday Evening Post | Momma's Money Matters
  3. Haiku Hijinx | Momma's Money Matters
  4. How to Avoid Over Spending on Vacation | Momma's Money Matters

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge

Pinterest
EmailEmail
PrintPrint