Using a credit card can be convenient and help you earn rewards, but there are certain purchases that experts recommend avoiding putting on your credit card. Charging the wrong items can lead to debt, high interest charges, and other financial issues that outweigh any rewards you might earn.
As someone who wants to use credit responsibly, here are 10 expenses you should avoid charging to your credit card
1. Mortgage Payments
Putting your mortgage payment on a credit card may seem tempting especially if you’re short on cash one month. However, most mortgage companies won’t allow direct credit card payments. Even if you use a third-party service, you’ll be charged high processing fees of 2-3%. Since you’re already paying interest on your mortgage piling credit card interest on top will get very expensive. Stick to paying your mortgage from your bank account.
2. Everyday Expenses
It’s easy to swipe your credit card for small, everyday purchases like coffee, lunch, or groceries. However, letting these minor expenses accumulate can quickly drive up your credit card balance. Before you know it, your balance is out of control. Consider using cash or debit for small discretionary purchases to avoid debt creep.
3. Cash Advances
Credit card cash advances let you quickly access cash, but they charge exorbitant interest rates and fees. Cash advance APRs are often over 25%, much higher than purchase rates. There are also transaction fees. Only use cash advances for true emergencies you can pay off quickly.
4. Bills
Paying bills like utilities and cable with your credit card seems convenient. You might even earn rewards. However, it’s a slippery slope. Missed payments lead to late fees and interest charges that negate any rewards. Link bank accounts instead of credit cards to biller accounts whenever possible.
5. Medical Bills
When faced with large medical bills, using a credit card is tempting. However, medical charges incur interest rapidly. Negotiate with healthcare providers for discounts or payment plans, which cost much less than credit card interest.
6. College Tuition
College students often put tuition on credit cards, telling themselves they’ll pay it off when they land a job. However, credit card interest accumulates quickly. Explore grants, scholarships, federal student loans, or tuition payment plans instead of charging tuition.
7. Taxes
Although you can pay the IRS with a credit card, it’s not wise. Processing fees for credit card tax payments run as high as 2%, which really adds up when tax bills are thousands of dollars. Save your credit for other purposes and pay the IRS directly from your bank account.
8. Vehicles
Some people charge cars on credit cards to earn rewards, paying the bill immediately to avoid interest. That takes serious financial discipline. Charging a vehicle you can’t afford and carrying a balance leads to credit score damage and expensive interest. Save up and pay cash when possible.
9. Down Payments
It’s rarely, if ever, advisable to charge a home, auto, or other down payment to your credit card. Large down payments strain credit limits and incur interest quickly. If you can’t afford the down payment in cash, you probably can’t afford the purchase yet. Wait and save.
10. Business Expenses
Entrepreneurs often use personal credit cards for business expenses. However, new businesses take years to become profitable and high credit card interest impedes rather than helps. Seek business loans or financing from other sources and use credit judiciously.
Your monthly rent or mortgage payment
You may have the option of charging your monthly rent or mortgage on a credit card, but pay close attention before doing so.
“While it may seem like a great deal and easy way to rack up extra rewards points, theres usually a 2% to 3% processing fee that negates all of the benefit, and then some,” Malani says. “We catch this mistake a lot.”
Make sure to know beforehand all the additional costs associated with charging this type of purchase on a credit card.
Erin Lowry, founder of Broke Millennial®, tells Select, “That processing fee could chip away at any value you believe youre getting in rewards.”
And if youre a homeowner, this also means you shouldnt charge your property taxes on a credit card.
“This may signal that youve bought too much home and cant meet this obligation with the income you bring in,” explains Kara Stevens, founder of The Frugal Feminista. Property tax, which you pay on top of your mortgage and interest, should always be factored into the cost of your home — and therefore into your budget.
Even though credit cards can offer convenience, theres really only one time you should use them for the purpose of charging your rent or mortgage, and that is if you want to meet a minimum spend on a new credit card in order to earn a welcome bonus. That is, of course, if the bonus is large enough to outweigh the cost of the processing fees, and you plan to completely pay off the balance before youre charged interest.
For example, new Chase Sapphire Preferred® Card (see rates and fees) cardmembers can earn 60,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. Thats $750 when you redeem through Chase Travel℠.
You can put most everyday expenses on a credit card — but not these. Personal finance experts weigh in on which expenses you should reconsider using a card to pay for so you can avoid “credit creep” and stay out of debt.Updated Thu, May 15 2025
The Chase Slate® is not currently available to new cardholders. Please visit our list of the best balance transfer cards and best Chase cards for alternative options.
Americans carry an average credit card balance of $6,194, and with the coronavirus pandemic triggering financial unrest around the world, that average could very well go up in the next few months.
As you reevaluate your 2020 finances, however, its good to make a plan for your credit card use so that you stay aware of what makes up the balance on your card.
While you may be relying on your credit card more than usual now to get through a pay cut or a job loss, you should always remind yourself of a few general guidelines of safe credit card use. That way, you keep long-term financial wellness in mind as you get through this difficult time.
“The general rule is: Dont use your credit card for anything that you cant pay for in full when the bill is due,” Priya Malani, a founding partner of Stash Wealth, a millennial-focused financial-planning firm, tells Select. In times of crises, like this one, that differs person to person.
Below, we spoke to four personal finance experts about the five types of expenses they recommend never charging on a credit card. Under normal circumstances, these are the rules of thumb.
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FAQ
What should you not spend on a credit card?
“The general rule is: Don’t use your credit card for anything that you can’t pay for in full when the bill is due,” Priya Malani, a founding partner of Stash Wealth, a millennial-focused financial-planning firm, tells Select. In times of crises, like this one, that differs person to person.
Is there anything you shouldn’t buy with a credit card?
Down payment, cash advances or balance transfers
A good rule to abide by is to not rely on a credit card for any kind of down payment. It will add to a larger cost and may be a sign that you shouldn’t make the purchase. In addition, cash advances usually charge a higher rate than purchases.
What is the 10 rule for credit cards?
A general rule of thumb is to keep your credit utilization ratio below 30%. And if you really want to be an overachiever, aim for 10%. According to Experian, people who keep their credit utilization under 10% for each of their cards also tend to have exceptional credit scores (a FICO® Score☉ of 800 or higher).
Can I spend my credit card on anything?
You may think it’s best to only use your credit card for significant purchases or emergencies, but there are many benefits to using your credit card for everyday expenses. In fact, you can use your credit card to pay for just about anything.
What expenses should I avoid putting on my credit card?
Here are 10 expenses you should avoid putting on your credit card. 1. Mortgage Payments If you’ve ever wondered, “Can I pay my mortgage with a credit card?” the answer depends. However, that doesn’t make it a good idea, especially if a cash crunch leaves you tempted to pay your mortgage with a credit card that has a high limit.
Should you use a credit card to pay for things?
Instead of using your credit card to pay for small, discretionary items, consider using cash. Not only will it save you from running up your credit card balance, it will help you stick to a budget because you’ll likely spend more mindfully if you have to dip into your wallet each time you buy something. 3. Cash Advances
Can you get into financial trouble if you pay bills with a credit card?
It’s easy to get into financial trouble if you frequently pay bills with a credit card, especially if you neglect to keep track of your balance. Going over your credit limit and missing payments saddle you with extra interest charges and late fees.
Should you use a credit card to finance a business?
Business Startup Expenses Using your personal credit card to pay for business expenses or to finance startup costs can be a bad idea. It generally takes at least several years for a business to become profitable, and in the meantime, you might be paying extraordinarily high interest on debt you can’t afford to pay back.
Should you use a credit card if you’re charging a lot?
Using a credit card can make expenses feel out-of-sight and out-of-mind, so get a receipt with your everyday purchases to help them feel more real, especially in a time when you may be charging a lot more than you normally do. And remember, the ideal consensus is: “Never charge without having a plan to pay off in the short term,” Sokunbi says.
Should you use your credit card if you can’t pay a bill?
“The general rule is: Don’t use your credit card for anything that you can’t pay for in full when the bill is due,” Priya Malani, a founding partner of Stash Wealth, a millennial-focused financial-planning firm, tells Select. In times of crises, like this one, that differs person to person.