Credit card financing can be described as an act of buying those items with the credit card that you cannot afford or can’t pay the amount in full. Due to the recent decline of economy, and the rising rate of unemployment, the trend of going on credit has increased greatly.
However, there are some things, credit is not meant for. Here is a list of items that are not suitable for credit card financing:
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Groceries – you shop for grocery daily or weekly but usage of credit card to buy grocery stuff should be prohibited or avoided. This is because it might cost you even more because you might be still paying off interest in four months on a tin of beans you ate three and a half months before. It’s absurd.
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Fuel – Fuel is another thing that you might need daily depending on how much you travel. Therefore, use of credit card for purchase of fuel should be avoided.
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Dining out – This item is similar to the once mentioned above because people usually go for dinner once a week or some might go daily. Therefore, you should refrain from using credit card for such an item.
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Any vehicle – Car loans is better option to purchase a vehicle instead of a credit card.
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Monthly bills – Paying your monthly bills by credit card indicates that your financial position is already poor and you will face difficulty, settling them in full every month.
It high time that, people should avoid the usage of credit card specially in purchasing the above mentioned items, until and unless there is a real urgency for it.
I would say that you should never use a credit card unless you can pay off the balance in full each month or unless you are using it for business purposes where you are investing into an appreciating asset.