A credit card is great to have to build credit and use for occasional small purchases. It's easy, however, to quickly get into trouble when using credit. There are several things you should never put on your credit card.
A few specific things you should avoid putting on your card include car purchases, weddings, and vacations. If you need to make a large purchase it's almost always better to take out a low-interest loan with fixed payments and no payment penalties. Unless it's an absolute emergency and you have a plan to pay off the bulk of it in a short amount of time, you should never put large purchases on your credit card.
According to Nasdaq, this can become problematic down the road. For starters, it's sometimes extremely difficult to get companies to stop charging you. Even if you get a new card there are loopholes that can allow the company to get your new information and continue charging you. Whether it's a gym membership, a web subscription, or any number of clubs or products you may have signed up for, each month you'll have your credit card charged.
Even a low rate card may charge 20 percent or higher for cash advances. There are usually fees to pay on top of the higher interest rate as well. Cash advances also sometimes come with a higher interest rate than regular purchases.
Amy Nickson describes her credit card nightmare after college when she owed $88,000 overall, with $51,000 just in credit card debt. It's always a good idea to keep living expenses off your credit card. Whether you're still in college or starting out on your own, living expenses can be pricey when you're on a limited income. It can be tempting to put everything from the grocery bill to gas for your car on your credit card.
Many hospitals will work with you on an interest-free payment plan. Even if they won't, there are better options available than relying on a credit card. Just a few hours in an emergency room can add up to thousands of dollars in medical bills.
While having a credit card can be incredibly convenient, it can also be potentially dangerous to your long-term financial health. Boro offers personal and auto loans with low APR. There is no cosigner, credit history or social security number required, making it ideal for college students. They offer a safe alternative to credit cards, with fixed monthly payments and no pre-payment penalties. Contact Boro for more information.