What types of items do you use your credit card for? Do you keep your credit card handy and use it for day-to-day purchases such as lunch, gas, and maybe a trip to the grocery store? Do you use it for bigger purchases such as an entertainment system or a new refrigerator?
Most people are unaware of other's credit card habits, but it is interesting to see how other people use their credit cards, what you should and should not charge to your credit card. Understanding these concepts will help you learn how to spend wisely with your credit card.
What Items Do People Charge Most To Their Credit Card?
People use their credit cards to buy just about anything, but generally it is bigger purchases such as vehicles or even houses. Because of these expensive purchases, they may only pay the minimum payment each month, which then adds more and more interest. This does not improve their credit score; in fact, carrying around large balances from statement to statement is a sure way to earn a poor credit score. There are other ways to use your credit card more wisely.
Sometimes people just buy petty small things with their credit card and it all adds up really quickly.
Items You Should Pay For With a Credit Card
You should use your credit card to pay for electronics and appliances because you can receive extended warranties and price protection on these types of purchases. Travel accommodations are another purchase that is good to put on your credit card. Usually credit cards have secondary travel insurance coverage that helps with added expenses as you plan for a trip. Using a credit card is usually the safest way to buy purchases online, but you must be careful not to overspend. Other items that are generally safe to pay with a credit card are concert tickets, cell phone bills, oversees purchases, tax-deductible items, and gym memberships
Items You Should Never Pay For With a Credit Card
There are also things you should never put on a credit card no matter how enticing they may seem, or how much you think you need them. For many of these purchases, you would be better off if you used your debit card or cash. As a rule of thumb, it's never a good idea to charge more than what you can pay off at the end of the month. If possible, you should avoid paying "one expensive debit off with a payment method that can lead directly to another debt." These include mortgage payments, medical bills, taxes, college tuition, bail bonds, gambling purchases, an expensive wedding, and any bills you are sending through the mail.
If you want your credit score to soar (and who doesn't?) you will need to avoid big purchases, and if you cannot pay your credit card off each month, decrease your spending; ensure you are spending wisely with your credit card. You do not want to be stuck paying enormous amounts of interest through the years for items that you look back on, wondering if they were worth it. Be smart when it comes to your credit card and you will save yourself a lot of stress.
The world of credit cards can be complicated and confusing to consumers. We make this complex topic easy to understand and use, so that consumers can make the best financial decision for their individual situation.
