Whether it’s your morning cup of coffee or a honeymoon cruise, it may seem like there’s hardly anything you can’t buy with plastic. But there are some boundaries even credit cards can’t cross.
Here are 5 things you can’t buy with credit:
Casino chips: The gambling industry bars players from purchasing chips with a credit card. There are casino ATMs, however, where you can withdraw funds from a credit card through a cash advance. But you’d have to be pretty desperate to go this route. The average cash advance APR is over 23% — a whopping 8 percentage points higher than the average 14.99% purchase APR.
Many casinos will extend a line of interest-free “casino credit” as a perk to players who don’t want to carry around fist fulls of cash. It’s nothing like a traditional credit card, however. For starters there is no card. You apply for credit through a casino, they take a look at your finances and decide how much “credit” to extend (typically based on the average balance in your checking account over a certain period of time). Once you’ve been approved, you can play cash-free but any funds you owe afterward will be taken out of the checking account you’ve linked to your casino credit account. If you don’t have enough money in the bank, the casino can file civil or criminal charges against you.
Pot: Even in states like Colorado where marijuana has been legalized, it’s not always possible to purchase the stuff on credit or even debit. That’s because major credit card companies are federally regulated and have long banned the use of credit for illegal substances. The issue has become increasingly muddy, however, as state laws around weed have changed. Some credit issuers like Visa have said it’s up to merchant banks to decide whether a transaction is legal. Some pot dispensaries have gotten around the issue altogether by labeling transactions vaguely so as not to raise red flags at banks. For example, a customer told the Denver Post his credit card purchase for marijuana showed up as “DKC LLC” on his statement.
Credit card debt: It sounds nutty to want to use one credit card to pay off debt on another credit card because it is. You can’t, at least not easily. What you can do is apply for a credit card that has a 0% balance transfer option. Balance transfers let you move debt (depending on the bank, that can include mortgage loans, student loans, traditional credit debt, and payday loans) onto a new card at a low interest rate for a certain period of time. It takes a pretty good credit score to qualify. Another option, albeit a risky one, is to take out a cash advance from one credit card in order to pay off debt on another. You may be wiping the slate clean on one card, but you’re merely swapping one debt for another – plus you’re going to pay hefty interest charges (23% on average).
Mortgage debt: It’s rare that a mortgage lender would allow a homeowner to pay their mortgage on a credit card, however, you can pay property taxes with credit, says credit expert John Ulzheimer. American Express once offered a short-lived program that let some customers use credit for mortgage payments but it ended during the mortgage crisis. Some third-party bill-pay services like ChargeSmart will let you pay your mortgage bill with credit but will tack on a fee (1%-3%).
Federal student loan debt: The only way to convince a lender to allow you to make student debt payments on credit is if you’ve defaulted on your loan, says financial aid expert Mark Kantrowitz. And even then it’s not a great idea. “It substitutes one debt for another, compounding the interest portion of the payment,” he says. What’s more, you’re taking on private debt in the form of a credit card loan that doesn’t enjoy any of the flexible repayment options that come with federal student loan debt, like loan forgiveness, deferment, or income-based repayment.
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