Don't Use Your Credit Card for These 5 Things

Don’t whip out your credit card just yet! Find out which expenses are best paid for with cash or other methods.

While you might be tempted to swipe your card every time you need to pay for something, know that certain costs are better borne with cash or other methods of financing.

Here are five expenses that you might want to refrain from swiping for:

1. Deposit For A Car

This can be a rather costly expense for which to swipe your credit card. If you need two types of financing (credit plus a hire purchase loan) to buy one item, you might want to reconsider the purchase as this could be a sign that you can’t actually afford it. It might be too costly to pay for interests on both sides and you could put yourself in line for more debt.

What you can do instead is look for a zero-down payment loan which exists for many car models. Another option is to check out step-up financing plans that let you pay less now and more later on when your income has increased.

2. Medical Bills

The only good reason to use your card for medical bills is that you’ll have an easily traceable statement come tax time when you want to claim for reliefs. However, medical costs are often heavy, sometimes recurring, and if you don’t repay it on time, can quickly add up. One option besides using a credit card to pay for medical bills is to withdraw from your EPF, this way; you don’t have to worry about the interests accruing.

Also, if you don’t already have some form of medical insurance, it’s best to buy now and save yourself the hassle of paying for healthcare on your own.

3. Home Loans Payments

If you are coming up short on your home loan instalments, you might be tempted to put it on your card (by taking our a cash advance). However, if you are unable to repay the charge before the grace period you will be stuck with not one, but two interest-inducing loans. This could eventually lead to big debt and if you are not careful, it could also leave a black mark on your credit status.

Instead, consider using your EPF to redeem a part of the loan so you downscale the monthly repayments and make it more affordable.

Read Also: 4 Things to Know About EPF Withdrawals

4. Wedding

Who doesn’t dream of a fancy wedding? The costs however, are often a nightmare and while it might seem attractive to pay for it (or parts of it) with your credit card, repayments can be heavy if you don’t keep track of your swipes. Instead of using your credit card, a low-interest personal loan might be a better option to help pay for wedding costs. With small structured repayments at low rates, you’ll enjoy a more affordable method to pay for a big wedding.

What you can use your credit card for instead is to book your honeymoon hotel suite and flight tickets, as well as pay for dining to enjoy potentially better rates, discounts, travel insurance and reward points.

5. Funding Your Small Business

You may have a wonderful small business idea in mind but without the cash to make it happen. Still, using your credit card should only come as a last resort option. This is because if you are not careful with the business expenses you charge to the card, you might rack up a huge bill. Plus, there are plenty of uncertainties that float around a new small business (or any business for that matter) and if you aren’t able to repay the credit in a timely manner, you might end up in debt.

A low-interest business loan or personal loan might be a more cost-efficient option to help run your business, not to mention you’ll have access to a larger sum of money.

Lastly, don’t bother swiping your card with merchants that charge a fee when you use your card. This is usually the case with smaller traders and businesses, so you should think twice before using your credit card at these venues and unnecessarily paying extra. If the item that you are buying is eligible and could benefit from credit card Purchase Protection, look for another merchant that won’t charge for card payments.

On the flipside, some merchants may provide discounts for non-card payments, so do ask before deciding to pay with cash or card. Looking for a new credit card or just a better one to add your wallet? Head on over to our credit card comparison page to research your heart out and discover the right card for you!


Agree or disagree with this post? Questions? You also have your word!

  • Yusof Kamil

    Agree. Credit cards have a lot of benefits but sometimes people are careless. This is a good tips to have

    • RinggitPlus

      Credit card users just need to be smarter about where they swipe and with which card, that's all.
      Thanks for your comment!

    • Ooi

      How to pay home loan with credit card?

      • RinggitPlus

        You can't directly do it. Paying a loan (mortgage) with another loan (credit), is not allowed, but you can take out a cash advance and pay off your home loan that way.
        However, doing this will incur hefty cash advance fees on your end and it's definitely not advisable at all

      • Cw

        How to pay for housing loan repayment using credit card? Please teach me.

        • RinggitPlus

          You can't technically do it with a credit card since paying a loan (home loan) with another loan (credit) doesn't quite make sense to the bank.
          But you can take out a cash advance on your credit card and pay off the home loan that way. (We don't recommend you do this of course, for the reasons we've stated above.)
          Thanks for your question!

        • Aniki

          If you got the cash, sure you can use credit card to pay for the stuff above to earn cashback or points rather than just pay by cash, you should advise them if not affordable, please don't use the credit card to pay for the stuff above

          • Sha Mohamed

            I wouldn't advise anyone to pay any loan using Credit card. Inability of you paying up your monthly loan is an indicator that you shouldn't be using your Credit card. Do not pay another debt by making another debt.

            • RinggitPlus

              We agree with this. It's bad practice, and should only ever be done in extreme circumstances

            • Yanie

              My friends once advise me that it is more convinient to use credit card while shopping oversea because of the lower currency exchange it is safer than carrying cash with you. What is your opinion on this?

              • RinggitPlus

                Hi Yanie,

                That depends on the card. Some credit cards offer lower exchange fees than if you use foreign currency directly, but not all of them do. If you want to use any credit card overseas, make sure you know the charges that you'll incur beforehand.
                Thanks for question!

              • Raj

                the article abit misleading, ive been paying my house deposit/car deposit before using Credit Card, ive been paying medical bills always using credit card, pretty much everything using credit for one purpose. maximizing my rewards point. Just one need to be responsible to pay back ALL in FULL before statement due.

                • RinggitPlus

                  You're right Raj. Technically, as long as you always pay in full and on time you'll be fine. But not everyone can afford to do that and sometimes things can go wrong with our budget.
                  For those people who aren't as financially secure, we suggest they don't use their credit cards for these things to really make sure that their finances can be in check.
                  Thanks for your comment!

                • Sharuan Sofian

                  The best is to set in mind that credit card is an advance, not extra money. The proper way to use the credit card is when u actualy have money to pay, but paying with the card u will entitle for discount, points & cashback. Or maybe u dont carry lotsa cash at the moment. So just swipe & pay in full. I use mine to settle all monthly utilities bills, so i just need to pay once at one place to settle everything.

                  • Hadi

                    Berhantu betul kad kredit ni

                    • Sam Rozario

                      Looks like many are planning to pay their home loan via cc cash advance i guess..