« Back to News & Blog

What You Can & Can’t Pay For With a Credit Card

A credit card being inserted into a payment processor

Credit cards allow people to make purchases with money they don’t actually have. Meanwhile, using your credit card properly can help build your credit score and open up opportunities down the line to apply for loans with low interest.

Sometimes, it’s acceptable to use credit and other times, it’s not. Knowing the difference can help you manage your finances and avoid debt.

Keep reading to learn more about what you can and can’t (more like shouldn’t) pay for with a credit card.

What You Can Use a Credit Card For

Credit cards may not be ideal for every purchase. However, using a credit card often allows you to collect rewards or points on purchases, and many cards offer protection on your purchases. These benefits are best experienced in these types of purchases:

Expensive consumer items

If you’re planning on making an expensive purchase, then it should probably go on your credit card. Credit cards offer an enormous benefit over cash payments and debit cards. That is, you’re protected against the loss of the item, theft, and damage for up to 120 days after the purchase.

This advantage is known as purchase protection. If your credit card offers purchase protection, you could finance items like a brand new smartphone. If you break it, your credit card company will pick up the tab and repair the damage.

Online purchases

Purchase protection is also a valuable benefit when making online purchases. Ultimately, you have no idea who you’re giving your money to when buying digital goods and services. With payment protection, you won’t be taken advantage of by fraudulent merchants.

But, that’s not all! Many credit card companies also offer return protection benefits. This protects you if the merchant won’t grant you a refund after failing to deliver on their promises. For this reason, most online purchases are safe to make with credit cards.


Using your credit card for gas purchases is not only acceptable, but it’s also rewarding. Many credit cards offer high rewards when you purchase gas. On another note, gas stations have become a hotbed for financial fraud and theft.

Again, using a credit card at the pump is one of the safest payments you can make, especially during an emergency.

Restaurant meals

If you’re going out to eat anytime soon, you can use your credit card to pay the check. Many credit cards offer both double and triple bonuses on all restaurant purchases, as well as seasonal cashback.

This is essentially like getting a rebate on your bill. Credit cards also give patrons peace of mind knowing that they have a backup reserve to access if cash or debit suddenly becomes unavailable.

Travel items

Travel items, such as hotels, rental cars, and airfare are all fair game if you need to use a credit card. In fact, most hotels and rental companies prefer credit card payments and may make it more difficult to use debit or cash.

The reason why this happens is simple. These companies want an absolute certainty that they’re going to get paid if something happens. Also, using a credit card protects you against unfortunate events, such as a canceled flight, lost baggage, etc.

What You Can’t Use Credit Cards For

It can be tempting to use your credit card for emergencies, but the reality is that this isn’t free money. You have to pay these debts back to avoid going under and getting into a sticky situation.

To prevent yourself from making this mistake, you shouldn’t use your credit card for the following purchases.

Medical bills

You should avoid using your credit card to take care of medical bills, even if you’re using a medical credit card. Make sure you read the fine print on your cardholder’s agreement to understand how and when interest is charged.

Credit card payments

Technically, you can’t even make credit card payments with another credit card. However, you can use a cash advance a credit card offers to bolster your checking account to make a bill payment.

The problem is that you can incur a high-interest rate and cash advance fee. Also, you won’t receive a grace period for the interest rate. Interest will begin to accumulate right away. Your credit card isn’t an ATM, nor should it be used as such.

Student loans

If you can’t afford to pay your student loans on time, there are better options than using your credit card. These options include student loan forgiveness, deferment, and an income-based repayment plan.

Paying off student loan debt with a credit card substantially increases the amount of interest you’ll ultimately pay. This isn’t good news if you want to stay clear of credit card debt.

Household bills

If your head is barely above water when managing expenses, it can be tempting to use your credit card as a safety net. Again, your credit card isn’t an ATM. If you’re not paying off your full balance every month, the interest will become significantly expensive over time.


Car dealers typically won’t allow credit card purchases or may limit the amount you can use. Like many other merchants, car dealers hate dealing with credit cards because they have to pay a fee to process the transaction.

If you cannot pay for a vehicle out of pocket, you can simply get financially approved for one depending on your credit score, the total cost of the car, and other factors.

Understanding the Limits of Your Credit Card

As you can see, there are certain situations where using a credit card is acceptable. In other situations, you should avoid using your credit card altogether.

At the end of the day, using your credit card responsibly will yield outstanding financial benefits and keep you clear of debt.

Learn More About Credit Cards

Subscribe to The Money Mill to get a link to our free online financial wellness program that’s designed to help you successfully manage your financial life. Plus, you’ll receive emails whenever we publish a new article so you’ll never miss a beat!