3 Things I'd Never Pay for With a Credit Card

It doesn't pay to charge some things.

I have a credit card with a great rewards program and I charge almost all of my purchases on that card in order to maximize my cash back. 

But while I swipe the card to pay for everything from groceries to my electric bill, there are three things I would absolutely never charge. Here's what they are. 

1. Stocks

I invest regularly, purchasing stocks and ETFs often. But I don't ever pay for stocks with a credit card and I never will. There are a few reasons for this.

First, most brokerages don't allow you to use a card to buy stocks. And in situations where it is possible, there are costly fees charged. Perhaps even more importantly, I don't want to borrow to buy stocks because I would have to pay interest charges that eat away at my returns. 

There's also another big reason why I would never consider buying stocks on a credit card. If I did that and then my investments ended up losing money, I would still have to repay what I owed (along with any interest charges accrued). So I'd be paying interest to repay money that I lost. I don't want to take that chance.

2. Mortgage payments 

I make mortgage payments monthly, but I would never consider paying my mortgage with a credit card either. 

My bank, and most other mortgage lenders, do not accept credit card payments so I would have to jump through hoops if I wanted to use my cards to pay my home loan. This would involve using a third-party service. And that service charges fees. It's not worth paying a fee to use my cards to cover the cost of my home loan -- especially since the fees would dwarf the value of rewards I could earn. 

My mortgage is also at a much lower interest rate than my credit cards would charge. And because my husband and I itemize when we file taxes instead of claiming the standard deduction, I can deduct the interest I pay on my loan. I wouldn't be able to deduct the interest charges on a credit card if I paid my mortgage with one. 

There's no reason to switch to higher cost, non-deductible debt by putting any portion of my mortgage onto a credit card -- especially since I'd get hit with added fees to do so. 

3. Splurges I can't afford

Finally, the last thing I would never consider charging on a credit card is splurges that I cannot afford. This includes anything that I couldn't pay off in full when my statement was due that isn't an absolute necessity.

I would not, for example, consider charging a vacation or a big purchase on a card. I'd either pay cash for these purchases (which is the ideal option and what I do most of the time), or I would use a cheaper form of debt such as a personal loan if I had to fund them over time because I couldn't pay upfront.

Ultimately, before charging anything, I want to be sure I can afford to repay what I'm charging in full and to make sure I won't be hit with added fees or interest that make my purchase costlier.  If that's not the case, I won't charge the purchase.