If 2020 is going to be the year you get your credit card debt under control, it’s essential to look at just what expenses you’re using your cards for. These days, we can use credit cards to pay for just about everything. However, it’s not wise to do that.
When you charge expenses to your credit card, it’s easy to forget about them — particularly if you’ve signed up for automatic payments. If you have a budget you’re working to stick to, it’s best to use cash or your checking account to pay for your expenses. This makes it easier to track them. Further, you feel the financial “pain” of the expense immediately.
This means not using your credit card for things like:
- Household expenses, including utility bills, home repairs, grocery shopping and services like landscaping and pool cleaning
- Small indulgences like coffee, salon services and items you see in the store that you just have to have
You also want to avoid placing large expenses on your card that you can’t pay off in full when you get your bill. These include:
- Mortgage payments — although most lenders don’t allow credit card payments
- Large medical bills
- College tuition
- Taxes
You might get enough airline miles by using your card for these things for a free flight to Europe, but you’ll be paying hefty interest fees that will put you deeper in debt.
It’s typically never wise to use your credit card for cash advances, either. The interest and fees on these can be extremely high. If you’re getting a cash advance, it means you don’t have the cash available that you need (or want). A cash advance is only going to let you postpone dealing with the problem.
Maybe, like so many Americans, you’re already mired in credit card debt. The start of the new year is an excellent time to explore your debt relief options.
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