What can’t you buy with a credit card?

Written by
Maryalene Laponsie
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Despite the common belief that credit cards can take you “everywhere you want to be” – as the old Visa slogan went – the reality is that there are some things a credit card can’t buy. For common everyday expenses like groceries or filling up your tank with gas, you’re safe to pull out your credit card; however, there some purchases which you might need to pocket the card and pull out cash or your checkbook. 

10 things credit cards can’t buy

1. Lottery tickets

If you dream of winning millions through your state’s lottery program, you’ll probably have to have some cash ready when you reach the register. Most states prohibit the use of the credit cards for lottery purchases. Even in the handful of states that accept credit cards, your card issuer may put the kibosh on lottery sales. For example, even though Massachusetts allows credit card sales, American Express won’t authorize payments for the state’s Season Ticket program.

2. Gaming chips and slot machines

Like lottery tickets, many states and card issuers have made it difficult to use credit cards for casino gaming. Many casinos are dedicated to responsible gaming practices that work to prevent behaviors that will fuel compulsive gambling. Therefore, credit cards are off-limits for some forms of gaming while issuers may tack on additional fees for other usages. For example, Nevada law prohibits the transfer of money directly from a credit card to many games or gaming devices such as slot machines. Even when credit cards can be used, issuers often treat gaming purchases as a cash-equivalent purchase which can mean interest rates of up to 30% on your gambling habit.

3. Cars

If your limit is high enough, your credit card company would probably be thrilled to have you pay for your next vehicle with plastic. Your dealer may not be quite so enthusiastic though. Since merchants pay a fee – typically between 1.5-3% of the purchase price – every time they process a transaction, some dealers just say no to credit card purchases. In addition, private sellers are often not equipped to accept credit cards. Of course, you could get a cash advance, but then you are the one stuck paying an extra fee of up to 5%, and you most likely get hit with an exorbitant interest rate to boot.

4. College tuition

Helping Junior get their degree can be costly. While grants, scholarships and subsidized federal loans may be the preferred method of paying tuition, these sources don’t always cover all costs. Using a credit card can be convenient, but according to a Wall Street Journal report, not all colleges are willing to let you charge tuition. And of those that do, you may end up paying an extra 2-3% fee.

5. Mutual funds and stocks

Buying stocks and mutual funds can be a risky proposition – just ask all the folks who saw their savings plummet when the stock market crashed in 2008. It’s one thing to lose your money and another to lose someone else’s money. For that reason, most stockbrokers and brokerage firms won’t take credit card payments for the direct purchase of mutual funds and stocks.

6. Mortgages

You might think making your monthly mortgage payment with a credit card is a sure-fire way to rack up reward points. However, chances are, your lender will have no part of it. Most mortgage lenders refuse to take credit card payments. Why? Lenders fear moving your debt from a secured, structured loan to an unsecured credit card could lead you to build up additional debt and make it difficult for you to maintain monthly payments. In a worst case scenario, that could mean foreclosure – something neither you nor the bank wants.

7. Money orders

Credit card companies make lots of money when you take out a cash advance. So they are unlikely to allow you to make an end run around their fees by converting your credit to cash via a money order. Many retail money order providers as well as the United States Postal Service refuse to accept credit cards as payment for money orders. Even if you can find a retailer willing to take your credit card, your card issuer may charge a cash advance fee as well as a higher interest rate.

8. Online pornography

Noting the high number of billing disputes that come from these transactions, many credit card issuers do not allow the purchase of online pornography. 

9. Marijuana

Though marijuana is legal in many states, because it isn’t considered legal federally, many credit card issuers restrict the use of credit cards at dispensaries. This could vary state by state, depending on which states legally allow the sell of marijuana, but marijuana purchases made by credit cards is widely considered off limits. If you do find a dispensary that allows you to use a credit card, expect some extra fees to be involved. 

10. Merchandise at discount stores

Everyone loves a bargain but you’ll need cash or a debit card to shop at some discount retailers. Credit cards aren’t accepted at discount grocer Aldi nor do some Save-a-Lot stores take this form of plastic. Head to Dollar General with your Mastercard, and you’ll be turned down although these stores will take Visa or Discover. Limitations on credit cards are often in place to reduce merchant fees and help businesses keep their costs low.

Credit cards can be convenient, but they won’t buy you everything. Whether it is the decision of the credit card issuer or that of the retailer, these are a few of the items that may require some cold hard cash to purchase.

Maryalene Laponsie
Cardratings Contributor

Maryalene is a freelance contributor to CardRatings.com and specializes in personal finance topics such as credit cards, budgeting, saving and investing. She has written professionally for nearly 25 years and is a regular contributor to U.S. News & World Report, Money Talks News,...Read more

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