Just because your credit card issuer gives you access to a sizable credit line, and just because there’s something you want to buy, doesn’t mean it’s a good time to use your credit card. Here are a few times you should leave your credit card in your wallet instead. If you swipe your card knowing you can’t pay back what you bought, you could technically be guilty of fraud. Some creditors may use the fraud argument to keep you from having that debt discharged in bankruptcy later on. Charging things you can’t afford is the surest way to get into debt and ruin your credit score. If you’ve opted-in to have over-the-limit transactions processed, you could trigger an interest rate increase by going over your limit. Not only that, maxed out credit cards are bad for your credit score and are difficult to pay back. Always confirm your available credit before using your credit card. High credit card balances mean high monthly payments, and that could increase your debt-to-income ratio. It’s also best to not make big credit purchases while you’re being approved for a mortgage because that could also impact your debt-to-income ratio. It’s best to save big credit card purchases at least until after you’ve completed the mortgage process. It’s even better to wait a few months after you’ve closed to get adjusted to having a mortgage and other housing expenses. You’re not liable for most fraudulent charges, but they’re still a pain to deal with. Don’t use your credit card if you think there’s a chance your card information could be compromised.
