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Should I use my credit card to pay for that?

If you are trying to rein in your spending, reducing your reliance on credit cards is a good place to start. There can be advantages to using credit cards versus paying cash, but the following are examples when you should leave the plastic in your wallet for another day.

Using an ATM to get cash

In all cases, if you can use a debit card instead, please do. Credit card companies charge considerably higher annual percentage rates for cash advances from ATMs than they do for purchases.

To pay tuition

Student loan debts can be used as tax deductions, but not if they've been accrued on credit cards. Student loans can also be deferred, unlike credit card debt.

If cash discounts are offered

Cash discounts benefit both retailers and purchasers. Don't lose out on a discount by paying with your credit cards. Don't have the cash? Consider delaying the purchase until you do.

To pay your income taxes

While the Internal Revenue Service doesn't directly accept credit cards for tax payments, it accepts payments from authorized third-parties. However, the companies that accept these payments tack on additional fees.

Often the IRS offers taxpayers payment plans that will be less expensive than charging it to credit cards.

Sometimes getting out of debt takes a good bit more effort than simply modifying your spending habits. Instead of dodging phone calls from creditors or only making the bare minimum payments on your accounts, get some sound legal and financial advice about your individual debt situation.

You may discover that filing for Chapter 7 or 13 bankruptcy can get you back on solid financial footing.

Source: Credit.com, "7 Times You Shouldn’t Use Your Credit Card," Jason Steele, accessed June 02, 2017

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