You can use your credit card to buy just about anything. You can pay your bills with it, buy food and clothing with it. Almost everything. Almost.
Here are 5 things you can’t pay for with your credit card.
Your Mortgage Payment
Every time you use your credit card, the business you’re paying doesn’t get the full amount. The credit card companies charge about 2% to process the transaction. So you could see why the banks don’t want you using your credit card. On a $2,000 mortgage payment that’s $40 they’re missing out on – every month.
It would be great to be able to pay your mortgage with a credit card though. Just imagine all reward points you can rack up.
While pot may be legal in some US states, you can’t pay for it with a credit card. Under federal law, marijuana use is illegal and credit card companies do not want to violate the law. Since credit card companies operate nationwide, they surely do not want to incur the wrath of the federal government.
Update: Recently, however, Visa and Mastercard have taken the bold step to allow marijuana transactions only in states where it is legal. They made this change after the federal government announced it will not challenge the states who’ve made it legal.
Visa has stated they will allow the banks to decide on their own whether they will allow this type of transaction to take place. If you use Discover or AMEX, at the moment you’re out of luck.
Online Adult Entertainment
You’re going to have a hard time putting porn on your plastic.
Stolen credit cards are often used to purchase adult memberships. The odds of tracing a purchase where no physical goods are shipped aren’t that high, especially if the thief hides their IP address.
Adult transactions also result in higher chargeback ratios than other industries.
Then there’s the risk that some content borders on being illegal, such as those “barely legal” sites.
For these reasons you may have a difficult time charging adult material on your credit card. It’s hit or miss. One card may be denied while another one won’t. One card may be denied one day and not the next.
Visa, MasterCard and Discover allow it, but American Express wants nothing to do with it as they ban it altogether.
Ever wonder why you may have trouble buying lottery tickets with your credit card? The reason is because the lottery is considered a form of gambling, which is against the law.
There’s a thin line between what is and isn’t gambling, so credit card companies want to be extra careful. American Express and Discover stay away from allowing their cards to be used to purchase lottery tickets.
You’ll have better luck with Visa and Mastercard, but it varies by state. Some states don’t want a credit card company eating up 2% of every transaction, while other states welcome the added revenue. Your best bet is to use a Visa or Mastercard debit card, rather than a credit card.
Gambling is a legal gray area. Some forms of gambling are legal while others are not. The policies of each credit card (and bank who issues the card) vary. Some will allow you to gamble at brick and mortar casinos, but not online. Others ban all gaming outright.