We all know that credit cards can be a valuable weapon in your spending arsenal. They can help you build good credit when you’re just starting out, and can come to your aid in the event of an emergency. But if you’re not careful, they can do way more harm than good. When it comes to spending, here are five ways you should never use your credit card…
To make you feel better: A new purchase can sometimes cheer you up, but if you’re looking to feel better, being crushed underneath a mountain of debt probably won’t do the trick. If you feel the need to splurge, use the cash in your pocket or make sure you’re spending from your checking account.
On hospital bills: Credit cards are best when being used on a purchase that you can pay off quickly. Medical bills usually aren’t small, so think about how long it could take you to pay off that debt. You’ll probably cringe each month when you see an interest charge tacked on to your remaining debt.
For a cash advance: If you’re in a pinch, you might think taking a cash advance on your credit card is a good idea, but consider other options before you pull the trigger on this idea. A cash advance may see like a better option than a payday loan, but it might carry a higher interest rate than your normal credit card charge. You may want to do some good research before going down this road.
Paying for college: Please don’t even consider this. You may not love the idea of student loans, but those usually come with super low interest rates, and your credit card more than likely does not. If you’re having trouble paying for school and you’re not working full time, you may be sitting on debt for a very, very long time.
To help start a small business: I’m happy that you’re finally opening up your dream hot dog business because following your dreams is good for you soul. Also, hot dogs are the best. But if you can’t afford those hot dog steamers, maybe find a small business loan or look on craigslist. I wish you all the success in the world but I don’t want to see you stuck with thousands of dollars of equipment if your restaurant doesn’t make it through the first year.