December 6th, 2016 | Credit Card Debt
A credit card is often the worse means of finance. Credit card debt is unsecured and typically carries a higher interest rate than a car or home loan. Unlike a home mortgage or student loan, credit card debt is not tax deductible.
Here are the five worse items to use a credit card for financing.
1. College Tuition - Rather than using a credit card, higher education can be funded through low-interest student loans, scholarships, grants, and part-time jobs. Also consider a less expensive school or delay enrollment until they have more savings.
2. Taxes - It is tempting to just charge a credit card to pay the IRS, but there may be fees that the payment processors charge. Usually the IRS will allow a payment plan with lower interest rates than a credit card.
3. Medical bills - Treatment costs for the uninsured can be expensive, but that is no reason to turn to credit cards as a means of finance. After receiving the medical bill, most insurance medical providers will be able to offer payment plans with little or no interest.
4. Vacations - When travelers finance their trips with credit cards, they will only be returning to the difficulties caused by additional debt. Set up a vacation fund each month until you reach your goal and use your savings to finance a vacation.
5. Weddings - Planning a wedding is not easy, but couples should live within their means and avoid financing the wedding with credit cards as it begins the couple lives underneath a mountain of debt.
Got credit card usage questions? Give us a call at (901) 388-1588 for answers!