Using Credit Responsibly: 7 Times You Shouldn’t Use Your Credit Card

As convenient as a credit card may be, there are certain situations where using one can land you in hot water. Here are seven times to consider putting that plastic away.

1. You Can’t Pay the Balance

When times are tough, it may be tempting to pay for purchases with your credit card and ignore that you won’t be able to pay off the balance when the bill comes due. Yet continuously missing your credit card payments may negatively impact your credit score. If you know you can’t make your payment, contact your credit card company immediately. Programs like Discover’s Payment Assistance gives cardholders options to deal with this situation.

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2. You Don’t Know Your Available Credit

If you don’t know how much room you have left on your card, you’re probably close to your limit, and your purchase may be declined. However if it’s accepted and your balance goes over your credit limit, it may have a negative impact on your credit score and signals to lenders that you may be having financial difficulties. 1

3. You’re Applying For a Mortgage

When you apply for a mortgage, you want to present the strongest application possible, and that means showing a good credit score. If you max out your card, or even have late payments on your credit history, your credit score may take a hit. A lower credit score could mean a higher interest rate on your loan, or jeopardize the approval altogether. If you have a large credit card balance, it will also affect your debt-to-income ratio, and may impact the mortgage amount you’re approved for. 2 So if a mortgage application is in your near future, lay off credit card spending for now.

4. You’re Feeling Down

If you’re struggling with feeling blue, be extra cautious about buying items on your credit card. The short-term high that may accompany an impulse purchase can swiftly turn to anxiety when you realize you didn’t need what you bought, and you can’t pay for it. Instead, look for another activity to cheer you up — preferably one that is free, such as a brisk walk, reading or watching a favorite funny movie.

5. Your Senses Are Impaired

Late night online shopping in the wake of a wine-filled evening is a recipe for disaster, leading to purchases your sober self really doesn’t want or need. Alcohol and medication may impair your judgement and your ability to make sensible financial decisions. If you’ve been partying or are heavily medicated, avoid making impulse credit card purchases, or you could end up with a hefty bill.

6. You’re Feeling Coerced By Another

If you’re in a relationship with someone who’s encouraging you to use your credit card to make purchases you don’t feel good about, it’s time to hide that credit card. Financial abuse may take many forms, and includes being bullied into using your credit card to buy items for the benefit of another. For more information on identifying and reporting financial abuse, visit the government of Massachusetts’ list of Indicators of Financial Abuse and The National Institute of Justice’s page on the Financial Exploitation of the Elderly.

7. You Don’t Trust the Person/Business Processing Your Credit Card Transaction

Whether you’re standing at a counter or staring at a computer screen, if you are at all suspicious of the person or business about to process your credit card transaction, it may be wise to delay or cancel the purchase. If the transaction has already been processed, bear in mind that today’s credit card fraud protection and security is better than ever before. Features like Discover’s $0 Fraud Liability Guarantee mean you’re never responsible for unauthorized charges on your Discover account. And with our new EMV chip-enabled cards, you’ll enjoy even more protection.

Credit cards are a convenient payment method for many people, yet in some situations they may not be the best option. Recognize when not to use a credit card, and sidestep potential financial headaches.

 

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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