5 things you should never buy with your credit card

By Maryalene LaPonsie

Remember when you couldn't go to the grocery store and buy a gallon of milk unless you had a couple dollars in your pocket? The move toward plastic started with gas stations and grocery stores, but for me, the defining moment came when I no longer had to worry about scrounging for change to buy breakfast on my way to work. Yes, one day - one glorious day - the clouds parted and the heavens sang and the fast food joints in the town began accepting credit cards.

So today you can buy everything from a 79 cent pack of gum to a $7,900 diamond bracelet with a little help from Visa, Mastercard and company. But should you?

While it may be convenient, there are 5 things you should avoid charging to your credit card:

1. Groceries: OK, if you are out of diapers and out of cash, it might be better to use credit than wrap little Johnny in a towel and hope for the best. But if you find yourself in a situation where you are charging groceries every week because you don't have any other way to pay, it is time to take off the rose-colored glasses: You have a problem. You need to figure out a way to spend less or earn more.
   
   Now, the exception to this rule would be if you use one of the best cash back credit cards and pay off your balance each month. With zero percent credit cards and cash rewards, you can actually come out ahead so long as you don't carry a balance. Otherwise, you might be paying interest on those diapers for the next five years if you start making only minimum payments when your bill comes due.


2. Government and utility bills: Like your groceries, you should be able to pay your utility bills out of your budget each month. And while using zero interest credit cards and rewards cards to buy groceries might make sense in some situations, it is never smart for bills from Uncle Sam or other government agencies. Unlike a business, the government isn't going to absorb the cost of transaction fees from the credit cards. Those will likely be passed on to you in the form of surcharges that could add up to 3 percent of your total bill. Same goes for many commercial utility companies.


3. Mortgage: Nothing screams DANGER! on a credit report like swapping one debt for another. Charging your mortgage payment could lead to a hit on your credit score. If you've been making this a regular habit, you may be able to get a free FICO score to see if any damage has been done.


4. Gambling: You may think what happens in Vegas, stays in Vegas, but let me assure you that your credit card bill will follow you home. Now, I am not going to look down my nose at you for having a fun weekend at the casino or buying a few lottery tickets. But even the best cash back credit card isn't going to make using plastic for gambling a smart financial move.
   
   Casinos want you to get caught up in the moment and spend more than you can afford. It's better to take a pre-determined amount of cash with you and leave the credit and debit cards at home. Remember, money spent gambling should be considered recreation, not an investment. After all, casinos don't stay in business by losing.


5. Retail therapy: Yes, I know you've had a rough day, and I know those new shoes will make you feel better…at least until the credit card statement arrives. I've been there, done that. But credit cards should never be used for impulse purchases. If you are going to use plastic, be smart about it. Use zero interest credit cards and be sure you can pay off your balance each month. Spending without a plan is not a good idea. A million bankruptcies a year can't be wrong.