Ten Purchases You Can’t (And Maybe Shouldn’t) Make With A Credit Card

What's Next In Payments®
8:07 PM EST December 5th, 2012

American Express encourages you not to leave home without their card. But even for some purchases you may wish to make in the privacy of your abode, having an AmEx will do you no good.

Technology makes it easier than ever before to avoid paying for your goods and services in cash, but even credit cards have their limitations. We take a look at a Business Insider report that highlights 10 common (sort of) things you can’t buy with credit, and break down why some of these rules are for your own good.

Really Expensive Things

Business Insider includes cars, college tuition and mortgages in its list, and the logic here should be pretty obvious. Merchant fees are to blame if your car dealer won’t accept credit – they don’t want to pay the 1.5-3 percent fee they generally have to fork over with every purchase. If you try to pay off some of your son’s or daughter’s tuition with a card, you could end up paying an extra 2-3 percent fee, and not all colleges give you this option anyway. And in the last case, lenders have no motivation to move your debt from a structured loan to an unsecured credit card.

If your purchase is going to be five figures or higher, credit may not be the way to go.

Really Cheap Things

Conversely, if your purchase is going to be on figure, credit’s not always the way to go either. Business Insider lists discount stores as businesses that sometimes refuse to accept credit cards, again in an effort to reduce merchant fees. Aldi and Save-a-Lot are singled out as cash-only entities, and Dollar general has limitations as well. So the next time you’re looking to save every penny, prepare to leave your card in your wallet.

Gambling

Lottery tickets and gaming chips and slot machine tokens often can’t be purchased with credit cards, as many casinos and lottery companies must advocate responsible gaming practices. And what could be less responsible than ringing up giant tabs when rolling the dice? Business Insider cites Nevada law, which prohibits the transfer of money from a credit card to most games or gaming devices, as a regulatory measure.

Mutual funds and stocks may not be gambling in the strictest sense of the word, but there’s certainly an element of risk involved there. No dice for credit cards here, either. Most stockbrokers and firms won’t take credit card payments for direct purchases of mutual funds or stocks – as Business Insider puts it, “its one thing to lose your money and another to lose someone else’s money.”

Placing the future of your debit score at the mercy of a gamble probably isn’t the best call anyway, so your credit card’s uselessness in these situations could be a blessing in disguise.

Miscellaneous

Money Orders may seem like a good way to avoid some common fees, but, oddly enough, credit card companies have caught on to this idea too. Most retail money order providers – Business Insider uses USPS as an example – don’t accept credit card payments for money orders. And those who do accept credit can issue fees and high interest rates as well.

Fraud can become an issue when dealing with credit cards as well, and a huge number of billing disputes come from online adult website purchases. We can think of a few reasons why this may be the case, but as a result, American Express has prohibited card users form charging porn on their cards since 2000.

And finally, a good portion of those of you looking to take advantage of medical marijuana’s legality in 17 states will have to find an alternate way to pay. AmEx and Discover refuse to process transactions for medical marijuana, citing federal laws. MasterCard and Visa haven’t ruled it out yet, but many payments processors are also against it.

Can you think of any other examples of the limits of credit cards? Let us know in the comments.

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