Where to Use a Credit Card

With America (and the world) living on credit and with credit cards being the fuel of the American economy, it might look like credit cards are to be used everywhere. Since credit cards are largely accepted by stores, restaurants, gas stations, online shops, hotels, airlines, hospitals – i.e. all kinds of businesses, one might think that credit cards are to be used absolutely everywhere. But is it exactly so?

Not necessarily. In some cases you simply can't use your credit card, even if you would love to. There are still many businesses that due to various reasons do not accept credit cards, or accept only particular types of credit cards. Although this is likely to be changed in the future because of the pressure customers are putting on merchants, there will always be places where credit cards are not welcome. Most issuers prohibit merchants from setting minimal amounts that can be paid via credit card and even if the thresholds are very low, for some merchants any extra charges related with credit card processing are unacceptable because this will force them to increase their prices. So leave some cash and other means of payment for such types of businesses.

Another case in which you can't, or maybe it is not that wise to use a credit card, are gas station and store credit cards. Well, it depends on many minor details, like discounts you get, interest rates, etc. but generally gas station and store credit cards operate at higher interest rates, so if you plan to have a balance on them for some time, it is not reasonable to pay with this (or any) credit card.

Some of the reasons people get a gas station or a store credit card are related to credit reports and credit history. This is especially true for young people, who still do not have a credit history of their own and might not be able to obtain a credit card by a major issuer. If this is the reason you chose to have a gas station or store credit card, you need to know that gas stations especially may not report your credit card and your spendings to credit bureaus, so if you have taken the credit card just because you needed credit history, you might not be able to get this benefit.

A great place to use your credit card are sales. But you need to be very careful what you buy because it is extremely easy to buy more than you need and to be unable to repay your debt back. We have mentioned many times the risks of impulsive shopping, so never forget that what looks like a bargain may quickly become a burden.

Credit cards are also OK to use when you need to track your expenses – i.e. your company has given you a credit card because this is easier than giving you a cash advance and all the expenses you make are reimbursed by the company. In this case the statements that the credit card issuer sends each month work perfectly as a proof that you have made the spendings.

On the contrary, if you don't want to leave a trail of your spending (or simply presence at a particular place at a particular time), avoid using credit (and debit) cards. Paying cash is still acceptable, so if because of any reason you are concerned about your privacy, just forget about your credit cards.

Another case when using your credit card might not be recommendable is online shopping. Although it is not fair to say that online shopping leads to credit card fraud, it is a fact that online transactions facilitate credit card fraud and identity theft. If you use your credit card online, it is extremely important to pay attention if the site is secure (i.e. is the communication between you and the server encrypted) and if the site is the right one - with so many phishing scams that are based on the fact that customers are naïve and enter their credit card data at various places that might resemble a legitimate site, making sure if the site you are at is really the site of your bank and not the site of some fraudster is vital to your credit card security.