Credit cards are there to make our lives easier and to help us buy this lovely pair of shoes today, not in 15 days when the salary comes. But no matter how tempting it is to just flick out the card and think about the consequences later it is time to stop for a moment and take a look at some expert advice on what we SHOULDN’T use our credit cards for. Here are the top 5 MUST NOTS:
Most of the mortgage companies don’t allow payment with credit cards because they “don’t want you paying debt with debt”, according to Odysseas Papadimitriou, CEO of the credit card comparison site wallethub.com. Still, there are third-party companies that will take your credit cards and enable you to pay your monthly mortgage fee. But that is something you should avoid – because not only will you have to pay interest on the money already used for the mortgage but also a costly fee to third company.
Once again, lots of car dealers won’t let you pay with a credit card for the same reason the mortgage companies wouldn’t – paying debt with more debt. Nevertheless, if you do find someone willing to take your credit card – know that, you are seriously risking maxing out your credit line debt. Also, you’re facing additional transaction fees of about 1-2%. It may not sound like a lot-But think about it-if you’re buying a brand-new car, you’re paying a couple thousand more for it, right on top.
The biggest risk of using credit cards for online purchases is the chance of fraud. Although lots of modern day credit cards are embedded with a computer chip that will make the transaction safer, most credit cards are easily exposed to scam. Debit cards are less threatened. First, users can find out much quicker if any sum is missing and second, they can be held liable evidence if a file of illegal activity is reported within 30 to 60 days.
In case you decide to use your credit card for online purchase keep this in mind. Use them for products that require shipping because most cards guarantee returns on products that get lost, broken or stolen. Additionally, pay attention to the URL of the website to be sure it’s secure. It has to start with “htpp”, if there’s an “s” at the end – htpps – then don’t buy from it. These websites aren’t protected and are an easy target for hackers and online thieves.
If you are planning to study in the USA, then paying for your education is one of the top priorities you should consider before applying to a college. All the experts advise you not to rely on your credit card (no matter how good your credit score is) to pay your tuition because it’s just not worth it. Usually the interests on credit cards are higher than the interests on the student loans offered by the universities themselves. Plus, It’s typical for many schools to charge you a 2-3% convenience fee, which is kind of like paying for the privilege of using your credit card.. According to experts there are many alternative possibilities like grants, low-interest loans, work-study programs etc. which will better help you to finance your education.
The recent success of the virtual currency Bitcoin made the news at the end of last week and many people were overcome by the new “bitcoin fever”. Still the world of the virtual currency holds many risks like unregulated operators. Your alarm should be immediately sent off if someone is agreed to sell you bitcoin via a credit card for one simple reason – if they were legitimate, proceeding with a deal like this would cause them problems (for example, a buyer can call the credit card company to cancel the charges but keep the virtual currency). So most likely, a seller like this is involved in a fraud. Another risk is when you proceed the deal through a third-party seller – be very careful when giving them your credit card information.