3 Things I Refuse to Charge on a Credit Card

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  • I'm a big fan of using credit cards to accumulate cash back and reward points.
  • In some cases, swiping a credit card doesn't make sense.
  • It's generally a bad idea to use your credit card to pay your tax bill, or in other situations when the processing fee is high.

Sometimes, it's best to pay in cash.

As someone who's been using credit cards for many years, I have a pretty decent history of racking up cash back and reward points that have helped me cover other bills or treat my family to fun activities. But as much as it often pays to use a credit card, in some cases, I know I'm better off paying cash. Here are a few things I won't use a credit card for.

1. Taxes

Most of the people I know get a refund during tax season. But when you're self-employed like I am, it can be very difficult to estimate your tax bill with accuracy. As such, most years, I end up owing the IRS money when I file my taxes. And while the IRS gives you the option to pay a tax bill with a credit card, it's one I don't like to take.

As much as it would be nice to get cash back on my tax bill, the IRS imposes fees for using a credit card for that purpose. And in the past, I've found that the amount of cash back I stand to collect is less than the amount I'm charged in fees. As such, the numbers just don't work out.

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2. Activities for my kids (when a surcharge applies)

My children are enrolled in a host of activities, from summer camps to sports. Some of these activities allow you to use a credit card to sign up without imposing a surcharge. But some charge a processing fee that's higher than the amount of cash back I stand to collect. In those cases, I'll pay for those activities via Venmo, check, or whatever fee-free option is available.

3. Purchases I can't pay for in full

I happen to love credit cards. But I hate the idea of having to pay interest on a purchase I make. As such, I won't charge anything on a credit card that I can't afford to pay for in full by the time my bill comes due. If I want to take a vacation or upgrade my electronic devices, I'll save up for those purchases ahead of time. Once I have the money, I might then use my credit card to get the reward points or cash back -- because why not? But I'll first make sure that money is sitting in the bank.

Be careful when using your credit cards

Scoring credit card rewards is a nice thing. But before you swipe a credit card, make sure you won't incur any fees for using it.

These days, many businesses are passing credit card processing fees on to consumers in an effort to cope with inflation and help recoup some of their costs. So before you bust out your credit card to pay for a clothing purchase or meal, read the fine print.

And of course, do your best to only use your credit cards for purchases you can pay for right away (meaning, by the time your bill is due). Any interest you accrue on a credit card balance is likely to cancel out the cash back you get -- and then some.

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