Consumers in Florida and all around the country routinely use their credit cards for a variety of reasons. Convenience is often a major factor in the usage of the cards, since almost every vendor accepts them as a form of payment. However, with credit card debt now exceeding $1 trillion, experts are sending some warning signals. A major credit reporting agency has developed a list of expenses that should never be charged to a credit card.
Topping the list, the agency recommends never using credit cards to pay for income taxes. A merchant processing fee is charged by the IRS and any third-party software vendors. Financial advisors stress that paying fees and interest on money owed for taxes is not a wise idea. In addition, it is more prudent to pay college tuition with a student loan instead of credit cards. The interest rate on student loans is typically much lower than that for cards.
Also, there may be companies who allow consumers to make mortgage payments via credit card, although most primary lenders would not. These transactions would come with a sizable fee and can also affect the amount of available credit one may have. Many consumers make major purchases on a credit card to take advantage of reward miles or points. However, this is not recommended unless the purchaser can pay the balance completely by the end of the month.
Though medical bills may be daunting, credit cards should not be used to pay them. Other options may be available through various health care providers. Finally, experts say to steer clear of purchasing stocks or making other investments with credit cards.
Credit card debt may be overwhelming to many Florida residents. Anyone wanting to reduce or eliminate credit card debt should contact an experienced bankruptcy attorney. A trusted lawyer can work with clients to develop the best plan forward that specifically addresses their situations.
Source: CNBC, “Here are six expenses you do not put on plastic“, Kenneth Kiesnoski, April 17, 2018