4 Purchases not to make with your credit card

Credit cards offer phenomenal opportunities to accumulate rewards, cash back and miles on your everyday purchases. Why use cash or debit when you can get rewarded for your spend and have your purchases protected with extended warranty, purchase assurance and price protection.
That said, sometimes it’s better to keep your credit card tucked in your wallet. Here are just a few examples:

1. “Sin” Purchases

If you have any purchases you’d like to keep private, credit cards are not the way to go. Whether it be money spent at the adult store or casino, if you’re looking for anonymity use cash.  If it’s an online purchase, consider using a Visa or MasterCard pre-paid gift card which doesn’t have your name attached to it.

Using a credit card will create a permanent record, with the name of the merchant on your credit card statement. A debit card will have the same effect. If you want to stay anonymous use cash or a pre-paid gift card bought with cash.

2. Taxes and Tuition

Paying taxes or tuition with your student credit card to earn cash back seems like a great idea on the surface.  In reality, it will cost you more in fees than you’ll earn in points.

The Canada Revenue Agency, and many schools and universities, recently started accepting credit card payments through a 3rd party service provider called Plastiq. However, Plastiq charges 2.5% to use the service. Most credit cards will earn you 2% or less in rewards. Unless you know for sure that you’ll be able to redeem your points for more than 2.5%, keep your card in your wallet.

3.  ATM Cash Advances

Some places only accept cash or require a minimum purchase amount for credit cards. The last thing you want to do in either case is take out money from the ATM with your credit card. Doing so can cost you a cash advance transaction fee of $7.50 from the credit card company, $5 in fees from the ATM, plus an interest rate of 24% from the moment you take out the money.

Instead, use your debit card. Or, just forego the purchase altogether – a pack of gum that costs you $12.50 in transaction fees will lose all its flavor!

4. Bar Tab

You may feel like a high roller when you hand over your credit card to the bartender to open a tab. However, losing track of how much is going on your tab, and who’s using it, is a recipe for disappointment.

Do it the old-fashioned way, order your drinks, review your bill and only pay for what you ordered. When you hand your credit card over BEFORE you order, all the power rests with the waiter.

As a rule of thumb, you should use your credit card whenever and wherever you can. Credit cards are convenient, offer significant protections on your purchases, and of course earn you rewards. However, like all rules, there are exceptions. So be smart, and keep your card in your wallet when you’re looking for anonymity or fees get too pricey to make sense.

Marc Felgar is a credit card expert & online entrepreneur from Montreal, QC. He is the CEO and founder of http://www.GreedyRates.ca, which helps Canadians find the best credit card through online comparison tools, filters, credit card reviews and the latest deals and offers in the marketplace.

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