Four Times When You Shouldn’t Pay with Plastic

We’ve grown accustomed to using our credit cards for almost everything – gas, travel, shopping, etc.  But a recent article by MSN Money tells card holders they should use caution when making certain purchases to avoid credit card trouble. Here are four times when you should steer clear or use caution when using plastic:

  1. When you are financing your start-up enterprise – Although some advisors may say it is all right for your credit cards to play a small role in funding a business, it is important to keep a few things in mind. First, your business credit is usually linked closely with your personal credit. This could cause issues for your personal finances if your business runs into financial problems. Second, business credit card rates are lower than personal credit cards rates most of the time. It might not be a bad idea to look into using a business credit card for a start-up enterprise.
  2.  When the purchase is morally questionable – People may be surprised to know that many credit card companies will decline and refuse payments for certain questionable purchases. For example, a Wall Street Journal website, SmartMoney, recently announced that at least one card company will not authorize payments for medical marijuana, online pornography, or casino chips. To avoid these rejections, use caution when making morally questionable purchases on your credit card.
  3.  When you already have too much debt – It is important to steer clear of accumulating more credit card debt when you are already overloaded. Try to use cash or debit cards when making necessary purchases and use your credit card only when you have to until you get your debt under control. If you are in credit card trouble, every billing statement has a phone number where you can call and receive advice on how to pay off your debt.
  4. When you want a peaceful taxi ride – Good luck trying to pay a cab fare with plastic without hearing an earful from your taxi driver. Although cab companies accept major credit cards, many drivers will get irritated because they get “taxed” on this money. It is also better for you to pay with cash because every time you swipe your card, they impose a 5% transaction fee.

Overall, credit card use is not bad, is it just important to use them wisely and with caution for certain transactions! Click here to learn more and read the entire article.

7 thoughts on “Four Times When You Shouldn’t Pay with Plastic

  1. This article is benefitial to college students because many don’t know when not to use their credit cards. Often times students overlook tips like the ones above and find themselves in financial crisis. Avoid using credit cards in the four circumstances above and find it easier to keep up with your personal credit and credit score.

  2. On the other hand, with my college years winding a close, I find myself poised either to take an active hand in the long-standing family company or start one of my own. It’s intriguing to note that business credit cards have lower interest rates. I’m already inclined to charge business-related gas purchases to my personal card, and reimbursement checks are only issued every thirty days. Had I not just discovered that business credit is tied closely to personal credit, that could have spelled bad news for my score!

  3. I was unaware that there was a difference between business credit cards and personal credit cards. Im glad to know this becaue I want to open up my own business one day and I will now know not to use my personal credit card. I also thinks its an awesome thing that some credit card companies can refuse to let you buy a purchase of moral question. Knowing how to use a credit card is important and essential to your financial wellness.

  4. First of all, I didn’t realize that there was that large of a difference between business and personal credit cards. So it was eye opening to hear that one probably should NOT use personal credit cards when starting up a business. I also wasn’t aware that credit card companies could deny purchases of moral question, but I think it’s great. Having a credit card that does this, can act as a deterrent to purchasing such things.

  5. Be wary if you start to build a lot of business credit and neglect building personal credit. If there comes a day you want to buy a house, mortgage brokers usually wont look at business credit, only personal credit.

  6. Knowing how to use and when to use your credit card is an invaluable tool. Being able to avoid a 5% transaction fee will save you a large amount of money if you use taxis often, although some states in America have made these fees illegal. Be sure to check if they are illegal in your state, so if you do get charged with one you can dispute it. Also, I agree that relating your personal and business finances is usually a poor choice. If something were to happen with your business and you used your personal credit to finance it, you may owe a lot of your own money as well as taking a hit on your credit score.

  7. It is definitely important to know when not to use credit cards. Especially in this economy, it is easy to spend money that you do not have; putting yourself backwards in your finances!

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