Few marketing cliches are as alluring as “buy now, pay later.” Quick satisfaction. Who can resist being able to obtain what they cannot afford with nothing more than a promise and a signature (and these days, frequently not even that)?
Experian, a credit reporting agency, estimates that the typical American has 3.1 credit cards with a total amount of $6,354. According to the Center for Microeconomic Data at the Federal Reserve Bank of New York, the total amount of credit card debt in this country is currently $829 billion. Approximately 8% of the outstanding balances are currently 90 days or more past due.
It is obvious that we charge a lot of our purchases to our cards, and it is also obvious that we cannot always pay for them on time, if at all. Despite the fact that practically any good or service can be purchased with a credit card, even ones you wouldn’t think, there are certain scenarios in which cards probably shouldn’t be used, even if it is possible.
The secret to using a credit card responsibly is to weigh the potential interest costs and fees against other financing options, research the potential effects of this specific credit card use on your credit score, and refrain from charging items that you won’t be able to pay off within a reasonable amount of time.
1. Mortgage Payments
Is it possible to use a credit card to pay for a mortgage? the answer is probably, but it does not make it a wise decision, especially if you are tempted to pay your mortgage with a credit card with a large limit due to a financial shortage.
Most mortgage providers won’t permit credit card direct payments. While some third parties, such as Plastiq, may assist you in using your credit card to pay your mortgage, they frequently impose fees for this convenience, which will just increase the total amount of bills you pay each month.
If you don’t intend to pay off your credit card amount in full each month, it’s a bad idea to avoid your mortgage servicer by finding a means to pay your mortgage using a credit card. Your mortgage already carries interest, so adding more to your credit card amount would be costly and unnecessary.
Your credit score could be impacted if you charge a lot on your credit card because it will reduce the amount of credit you have available to you. If you use a credit card to pay your property taxes, this could also occur.
2. Buying From Unsecured Websites
This one should be obvious.
It is dangerous practice to send credit card details or any other sensitive information to a website whose address starts with HTTP (for hypertext transfer protocol), where HTTPS stands for secure. Although not all HTTP addresses are vulnerable, the likelihood of “man-in-the-middle” hackers intercepting your credit card information and other personal information is significantly increased when using HTTP sites, particularly if you use your computer in a public setting like an airport or coffee shop.
An HTTPS connection that is properly setup hides user data, ensures that the user is connecting to the “genuine” website in question and not a clone, and protects the integrity of data sent between the user and website.