6 On Your Side Answers: When to use your credit card

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If you are already cutting it close for the month with your income and expenses, you may be tempted to use plastic to pay the utility, cellphone or cable bill.

However, credit cards are not always your best form of payment.

Here’s why, if you’re not paying off your full balance each month, the interest you will be charged makes those monthly bills even more expensive.

Some car dealers do allow credit card purchases, but may limit the amount of the purchase price you can put on your card. 

Like plenty of other merchants, some dealers don’t like credit card payments because they have to pay a fee to process the transaction.

If you can’t pay for the vehicle outright, go to a credit union or bank to get financing approved at a reasonable interest rate before shopping for a car.

You technically cannot charge your monthly credit card payment on another credit card. 

But perhaps you’ve been tempted to use a “cash advance” from a credit card to bolster your checking account, so that you can pay other bills.

If you do that, you’ll generally pay a cash-advance “fee” and likely a higher interest rate on the amount of cash advanced than you pay on credit card purchases. Remember, your credit card is not an ATM and should not be used as one.

There are real benefits, however, to transferring high-interest credit card debt to a new card with a generous zero-percent balance transfer offer. 

Just be aware of any balance-transfer fees, and find out how long the zero-percent interest rate lasts, and pay off the balance by then.

With credit cards that have a zero-percent “introductory offer,” it may be tempting to buy big ticket items, like a fancy TV, a washer and dryer combination, however that zero introductory offer will expire in time.

And while credit cards offer great purchase protections and should be used for many big-ticket purchases, buying something on credit when you can’t afford to pay it off right away isn’t a wise decision.

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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