Credit cards: you either love them or you loathe them.
I’m in the camp that appreciates them. When used responsibly, credit cards can deliver valuable rewards and conveniences.
But I recognize that I’m not the norm.
I’ve witnessed the financial consequences credit cards can cause for others, so I understand why many people avoid them. Irresponsible use can produce high interest charges, late fees, and damaged credit scores.
Credit can also make it easy to spend far more than intended. Financing or paying with a credit card can make a purchase feel more “affordable” because you’re not handing over cash you already have. Just because a monthly payment seems manageable doesn’t mean it’s the best choice. Debt creates stress, forces many into a paycheck-to-paycheck cycle, delays savings and retirement, and more.
None of that is desirable—especially when there are better options.
Note: There are exceptions. If you understand the fine print of a financing offer and can fully pay it off before interest or fees apply, it may make sense. But if you struggle with credit or debt, it’s safer to avoid financing the items listed below.
Here are several things you should generally avoid financing or charging to a credit card unless you are absolutely certain you can pay them off in full before interest accrues.
1. Furniture.
When we moved to Colorado earlier this year, we bought several furniture pieces. Salespeople often push financing, suggesting you won’t feel the sting of a large one-time expense.
That’s a risky proposition. Furniture can be costly, and it’s easy to walk out of a store with a large balance. Those apparently attractive financing offers still require you to pay the full price eventually. Too many buyers focus only on monthly payments and forget the importance of the total cost.
If you need perspective, other personal finance writers argue the same: deferred or low-interest furniture deals can end up costing you more if you don’t pay them off promptly.
2. Wedding expenses.
A wedding is a wonderful milestone, but starting married life in debt is rarely wise. Wedding debt can create tension, ongoing financial stress, and long-term problems.
Weddings can be expensive—or they can be affordable. Couples can plan meaningful ceremonies on small budgets if they choose. In the most basic form, marriage requires only a license.
3. Medical bills.
Medical expenses are stressful and often unavoidable, but charging them to a high-interest credit card should not be the first option. Before relying on a card, contact the provider to ask about discounts for cash payment and about setting up a hospital or provider payment plan.
Payment plans arranged directly with the medical provider frequently carry lower interest or fees than credit cards, and they avoid the steep interest rates credit cards charge.
4. Vacations.
Financing a vacation is a common yet poor choice. I know someone who used student loans to travel and even bought timeshares with borrowed funds—an especially damaging move. Vacations are meant to be restorative, not a source of months or years of interest payments.
5. College costs.
Putting tuition on a credit card is usually a bad idea. Credit card APRs often hover around 20% or more, and schools may add processing fees (commonly 2–3%) for card payments. Those fees and interest can quickly balloon the real cost of education.
Student loans, grants, scholarships, and payment plans tailored for tuition are typically far better options than charging tuition to a card with a high APR.
6. Clothing.
Many retailers tempt shoppers with store cards that offer small perks—discounts, free items, or special financing. If you’re not disciplined with credit, ignore these offers. The modest immediate benefit rarely justifies the potential for revolving debt.
Clothing rarely needs to be financed. If funds are tight, thrift stores or budget-friendly retailers are practical alternatives that avoid debt.
7. Down payments.
Using a credit card for a down payment is generally unwise. If you can’t gather the down payment in cash, charging it to a high-interest card means paying interest for months or years, which can negate the value of the purchase itself.
It’s usually better to delay a purchase and save for the down payment to avoid expensive financing costs.
What do you think about financing these kinds of purchases with a credit card? Are there other expenses you believe should never be financed?