Swiping your credit card on minor purchases such as filling your car up at the gas station or buying weekly groceries is a great way to help manage your money and build your credit history. In fact, your credit card payment history makes up 35 percent of your credit score. So, using your card to purchase necessities and then paying it off at the end of the month will help raise your credit score.
However, did you know that there are times when it is best to NOT use your credit card? A recent Equifax Finance Blog article, “Four Times You May Not Want to Use a Credit Card,” explains when you shouldn’t be inclined to swipe your card and why.
For example, one time that you may want to think twice about swiping your credit card is to pay for your mortgage. Yes, large purchases on your credit card will help you rack up rewards. However, some mortgage companies will charge you a convenience fee to use your credit card. So, any points or rewards that you earned by putting that large purchase on your card will essentially be canceled out.
Another instance where you may be charged significant fees is when you use your credit card to pay for college tuition. The average fee for using your credit card to pay for tuition is 2.62 percent. When you’re paying a few thousand dollars a semester for college tuition, that small 2.62 convenience fee can add up. And, those rewards you thought you earned? They’re eaten up by the fee.
These are just some of the times when you may not want to swipe your credit card. For more information, visit the Equifax Finance Blog.