10 Circumstances When You Must NOT Swipe Your Card!

On our blog, we’ve posted plenty of articles that, in one way or another, teach you the best ways to manage your credit card. This write-up is along the same lines. The difference is that here we describe the times when you should NOT use your credit card - in order to ensure that you don’t get into trouble! Here are ten cases in which you should just stay away from the swiping machine.

1. When you can’t afford to pay off the balance. This may sound obvious, yet there are a large number of people who do just this. The end result is debt that they cannot get out of, along with completely ruined credit scores.
   
   
2. When you already have debt. It’s always better to pay off old debt before you rack up new debt. So pull out your credit statements, total up your outstanding dues, and pay them off before using your card again.
   
   
3. When you are near your credit limit. Even if you are a few hundred dollars away from your limit, your score may go down. If you’ve used up most of the limit on a particular card and still want to make a purchase, you should either ask the issuer to increase your limit, use another card with a lower balance, or simply pay in cash.
   
   
4. When you are about to apply for a mortgage. Most lenders dislike it if a borrower has a huge amount of credit card debt, as it can mean that he or she will not be able to make timely mortgage payments. A better approach, in this case, is to wait for a few months until the deal is closed and you’ve adjusted to having housing expenses.
   
   
5. If the person handling it is suspicious. Through a process known as skimming, criminals have been known to steal credit card information during an otherwise legitimate transaction. For example, a dishonest waiter may use a skimming machine to surreptitiously get access to your card details as you pay for your meal at a restaurant.
   
   
6. If you habitually pay off one card with another. If this is something you do on a regular basis, it is bound to show up on your credit report. On the other hand, if it’s a one-time event, make sure you carefully evaluate the terms and conditions of the transfer to make sure it’s worth it.
   
   
7. When it’s just because you want to rack up reward points. It can be tempting to use your credit card to purchase things you don’t want or can’t afford just because it will give you reward points. However, doing this is inadvisable as the resulting finance charges (if you are unable to pay off the balance in a timely manner) may substantially outweigh the rewards earned.
   
   
8. When evaluating an extended warranty. This is a mistake many people make when they buy a car – they end up paying for the warranty through their credit card instead of including it in the car loan, with the hope that they will have to make lower monthly car payments. Unfortunately, by taking this route, they may instead have to pay extremely high-interest charges on their credit card balances.
   
   
9. When you think you’ll save money by buying things you want but don’t need. Let’s say you go to an electronics shop and see an offer which enables you to buy a TV at a discount of $300 if you purchase it today. But what you need to understand here is, if you didn’t plan on buying a TV in the first place, it’s actually an expenditure, not a savings.
   
   
10. When your interest rate is about to go up. According to the Credit Card Act of 2009, credit card issuers are required to provide consumers with at least 45 days’ notice before increasing their interest rate. And, legally, they can apply the higher rate to purchases starting on the 14th day after they send the notice. Thus the moment you get information of a rate hike, you should stop using that card.

A sudden intimation by the card company that your interest rate is about to increase can disrupt a lot of your plans, especially if they revolve around using your card to temporarily fund your business. For such individuals, Fund&Grow has a great solution. For a flat fee, we help our clients with good credit receive $50,000 - $250,000 of unsecured credit at 0% interest. This amount is available for a period of 6, 12, or 18 months and can be used for any purpose – from funding a business to making the down payment on a property. So if you have a similar requirement, call us at (800) 996-0270, and we will help you out immediately!