12 Purchases You Should Never Make with a Credit Card

Making these purchases with a credit card could cost you more in higher fees or interest charges.

stressed man having debts with credit card
Updated July 18, 2024
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Credit cards are often an easy way to make purchases and potentially earn rewards. But if you’re not careful, your purchases could have a negative impact on your finances — whether it’s having to pay hefty fees or a high balance affecting your credit. There are simple ways to boost your credit — taking on unnecessary credit card debt isn't one of them. 

Here are some purchases you might want to avoid making with a credit card. 

Cars

Studio Romantic/Adobe young woman buys a car in a car showroom

You might want to use a credit card to buy a car and earn loads of rewards, but is it worth it? 

Many car dealerships allow you to put between $3,000 to $5,000 on a credit card towards the purchase of a vehicle. Anything over and you might have to pay around a 3% transaction fee. Paying this fee wouldn’t likely be worth it unless it’s helping you earn a large sign-up bonus.

Pro tip: You can reduce your overall car expenses by shopping for the best auto insurance policy.

Cash advances

Credit cards look and feel like debit cards, but they have some major differences. While you might use a debit card to get cash from an ATM, you wouldn’t want to use a credit card for the same transaction.

That’s because most credit cards charge cash advance fees of up to 5% of the transaction for withdrawing cash using your card. Save money by learning how to avoid cash advance fees.

Pro tip: If you're short on cash, now might be a good time to make extra money instead of relying on your credit card. 

College tuition

terovesalainen/Adobe man counting college savings fund

It’s possible to pay for college with a credit card, but it might not be worth it. If a college or university allows credit card payments for tuition, they typically tack on additional fees.

Even if you have a credit card that earns rewards, the earning rate wouldn’t likely be enough to offset credit card transaction fees. Having a high sign-up bonus could change the calculation in your favor.

Electronics

hedgehog94/Adobe father and daughter buying in tech store

You might not want to use a credit card on big-ticket items such as TVs or other electronics since it will raise your overall credit card balance. This could potentially negatively impact your credit score from using too much credit and subject you to hefty interest charges.

Using a credit card is likely fine if you plan to immediately pay off your balance. If you find you do have to carry a balance for a necessary expense, the best balance transfer credit cards can help you avoid interest charges.

Medical bills

Manu Reyes/Adobe young woman paying in a veterinary with credit card

Similar to making an expensive electronics purchase, paying large medical bills with a credit card could result in you carrying a high credit card balance. This might could mean paying more interest and lowering your credit score.

However, if you have the money to pay off your balance, using a card can help you earn valuable rewards. Consider the best credit cards for medical bills if you have medical expenses.

Rent and mortgage

Rido/Adobe man managing bills

If you want to pay rent with a credit card, consider the additional costs that could be involved. Your landlord or lender might not accept credit card payments, but you could use a service such as Plastiq. 

However, Plastiq typically charges a 2.9% fee. This is likely similar to what any vendor might charge to accept credit card payments for these types of transactions.

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Student loans

Damir Khabirov/Adobe  young african american student using online banking application

Would paying student loans with a credit card be a good idea? Probably not, if it’s even an option. You’d likely be on the hook for transaction fees or would have to use a service such as Plastiq, which has its own fees. If you’re trying to avoid interest charges, it could make sense to use a balance transfer card instead.

Taxes

fizkes/Adobe young man looking at laptop screen calculating expenses

It’s possible to pay taxes with a credit card, but it might not always make sense. It could make sense, however, if you frequently have to pay large amounts of taxes and want to quickly earn credit card sign-up bonuses.

Keep in mind that you have to pay fees if you pay taxes with a credit card. The IRS works with multiple companies to process credit card payments and charges an average fee of around 2% for tax payments you make with a credit card

Casual spending

Friends Stock/Adobe woman with credit card buying coffee at cafe

There’s nothing necessarily wrong with eating out, shopping, or going to the movies. But too much unnecessary spending, especially on a credit card, could get you in trouble fast.

Before you know it, you might have high balances that are affecting your credit score and racking up interest. Some of the best budgeting apps can help you organize your finances and keep track of your spending.

Utilities

panuwat/Adobe hands holding mobile phone on blurred Electric bill

Many utility companies don’t allow credit card payments or charge a transaction fee for the service. To see whether it would make sense to pay utility bills with a credit card, calculate the difference between the value of the rewards you might receive versus the fees you have to pay.

Some utilities, including certain phone and internet bills, allow credit card payments and have no transaction fees. See our top recommendations in our review of the best credit cards for utilities.

Vacations

MclittleStock/Adobe computer desktop tickets flights web

It wouldn’t be surprising if a vacation set you back a few thousand dollars, but should you put that amount on a credit card? If using a credit card means carrying a high balance that will cost you money in interest, it’s likely not a good idea.

However, using a credit card for a vacation and then immediately paying off the balance could offer valuable benefits, including rewards and travel coverage. Find a top travel option in our list of the best travel credit cards.

Weddings

Jacob Lund/Adobe female trying on wedding gown

It’s possible to earn loads of rewards by using credit cards to pay for wedding expenses, but at what cost?

If you don’t plan to pay your balances down immediately, high interest rates could reduce the value of any rewards you earn. But if you have the cash to pay off your balances, a wedding could be a huge opportunity to earn rewards with a credit card.

See which options might make sense for you in our list of the best credit cards for weddings.

How to choose a credit card

Farknot Architect/Adobe woman holding and choosing credit card to use

Consider these factors if deciding between different credit cards:

  • Credit score: Is your credit score good, poor, or excellent? Where you land will help determine the types of cards you could qualify for.
  • Annual fee: You’ll likely have to pay an annual fee if you want a credit card with better benefits. There are also plenty of options for no annual fee credit cards.
  • APR: Carrying a balance on a credit card typically results in high interest charges unless you have a 0% APR credit card.
  • Rewards: What’s your reward preference? Choose between cash back, points, or miles.
  • Benefits: Consider perks such as airport lounge access and travel insurance if you’re a frequent traveler. If you’re an avid shopper, you might want purchase protection or extended warranty benefits.

Bottom line

Seventyfour/Adobe customer handing credit card to cashier paying via bank terminal

Making certain types of purchases with a credit card won’t always make sense because of high interest rates or transaction fees. But in some cases, the potential rewards you could earn might outweigh any fees you’d have to pay.

This is often only true if a credit card has a generous sign-up bonus that could offset the cost of using a credit card. You can compare credit cards using our list of recommendations to find the right one for your needs. In addition, if you're short on case, consider picking up a side hustle to help boost your income.

Lucrative, Flat-Rate Cash Rewards

5.0

Wells Fargo Active Cash® Card

Current Offer

$200 cash rewards bonus after spending $500 in purchases in the first 3 months

Annual Fee

$0

Rewards Rate

Earn unlimited 2% cash rewards on purchases

Benefits and Drawbacks
Card Details

Author Details

Ben Walker, CEPF, CFEI®

Ben Walker, CEPF, CFEI®, is credit cards specialist. For over a decade, he's leveraged credit card points and miles to travel the world. His expertise extends to other areas of personal finance — including loans, insurance, investing, and real estate — and you can find his insights on The Washington Post, Debt.com, Yahoo! Finance, and Fox Business.