The amount of convenience that credit cards bring is certainly undeniable. You get to use it in times of emergencies, you can buy airline tickets online, you can shop online and pay for them using your credit card, the list goes on.
As convenient as credit cards may be, there are some times wherein you’re better off just keeping the plastic away. In some cases, you’re better off just paying with cash or debit. Here are some situations where you should consider not using your credit card.
When You’re Required to Pay a Fee
When you use your credit, you run the risk of paying more than your purchase if you don’t pay the full required amount each month in interest. Why add to that amount in fees? If your purchase will just leave you paying a fee, consider a different payment option.
Check if your credit card makes you pay a fee for certain transactions. For instance, you might need to pay for foreign transaction fees, which can be as high as 3 percent. You might also be charged a fee if you pay for taxes, mortgage payments, or for tuition.
When You Don’t Know Who You’re Dealing With
Don’t just whip out your card to pay off an online transaction from some sketchy website. If you don’t know who you’re dealing with, don’t pay for it. Make sure it’s a legitimate transaction. While you do have protection under the Fair Credit Billing Act, there might be considerable damage done within that 30-day timeframe.
When You’re Near Your Credit Limit
Never max out your credit card. In fact, you don’t even want to be anywhere near your credit limit. In order to have a high credit score, you should keep your credit utilization ratio below 30 percent. If you’re about to reach your credit limit, or just hovering above the 30-percent line, you can either ask your credit card provider to raise your limit, use another card, or look for another way to pay.
When You Simply Can’t Afford It
You can actually do the math. How many months’ salary would it take to pay for the item? A basic rule of thumb is if you can’t pay for the item back at the end of the month, you can’t afford it. Paying for the item with a credit card will only leave you with a balance carried over the next month – and carrying a balance will just hurt your credit score.