There is a lot of information all over the internet that tells us to steer clear of making too many credit card purchases since these can lead to serious debt. However, if used wisely, a credit card can actually be one of the best ways to purchase goods and services.
It pays to be careful when selecting what you should pay for with a debit card and what should be a credit card buy. But as a general rule of thumb, larger and less frequent purchases are the ones that you should buy with credit cards, UNLESS you are able to pay off your entire credit card balance each month. In this case, making small purchases on your credit card can also bring huge benefits.
Whether you opt to buy a prepaid Visa card or use a more traditional type of credit card, these can make an excellent choice for a variety of purchases. Using them for everyday purchases can quickly lead you to spend more than you should, but with the right strategy, credit cards can be a secure and rewarding (literally) payment option. Here are the 8 items you should always buy with a credit card.
1. Online Shopping
With an astonishing 2 billion purchases being made online each year as of 2020, it will come as little surprise that along with this boom has come a flood of online fraud cases.
For the most part, when you make an online purchase, you will be doing so from a reputable and trusted retailer who will take what they are owed and send you what you have purchased. However, unfortunately, there are some less reputable companies out there who will use your card details to scam and steal from you.
Not only that, but even companies that intend to use your information ethically can be vulnerable to cyberattacks that could compromise that information.
Using a debit card leaves your bank account and potentially your life savings exposed. But credit cards have much more robust fraud protections and guarantees. In many cases, even if your information is stolen, the fraudster may not be able to use it without your credit card company catching on.
There are some excellent options if you want to use a credit card for online shopping. One of the best such cards is the Paypal cashback Mastercard, which gives you 2% cash back on every purchase and doesn’t charge an annual fee.
2. Renting a Car
For the most part, car rental companies will ask for a refundable deposit if you pay using your debit card. To avoid this, using a credit card is ideal. The reason that rental companies do this is that with a debit card, they may not be guaranteed the money if it is not in your account.
In contrast, a credit card gives them that extra reassurance that, no matter your financial situation, they will get paid. The same often applies to hotels which are also a great reason to use your credit card.
3. Large, One-Off Purchases
There will no doubt come a time when you need to make a large purchase urgently, or simply because you want to treat yourself. However, this can be difficult if you don’t have the cash upfront or do not feel comfortable taking a big chunk of money out of your checking account.
What’s more, with so many credit cards offering 12 months of no interest, you have the option to spread the cost without incurring any additional fees.
That being said, it may be necessary to source the best credit card for large purchases, and you should do your research to make sure you are getting the best deal. The Discover It Miles card is being raved about as being one of the best credit cards for big purchases due to its generous reward options.
4. Items That Give You Rewards
Many credit card companies offer healthy reward programs, especially on items that you purchase frequently, so signing up for a credit card that allows you to take advantage of these is an excellent idea.
Of course, as mentioned previously, you want to make sure that you can actually pay for these items at the end of the month. If you overspend just to get a certain reward and end up carrying the balance over into the next billing cycle, not only will you be charged interest on your purchase, but your credit score may take a hit.
One of the most common uses for a credit card is to book and pay for flights. This can come in especially handy for those who travel a lot but can be just as effective if you only travel once a year.
When you use a credit card to pay for flights, your card issuer may provide you with travel insurance. If anything goes wrong, you know you are covered and won’t lose your money.
6. Birthday and Holiday Gifts
In this modern era of large gifting and huge celebrations, birthdays and gift-giving holidays like Christmas can quickly become very expensive. While many people want to indulge in a little luxury, this is not always financially viable. For this reason, you might count birthday party celebrations or gifts given during the holiday season as one large purchase that can be made with your credit card.
Making use of a 12 month no-interest credit card can also give you the freedom to pay for these gifts over the subsequent months. However, if you can, saving up or budgeting your gifts is a better option for staying financially stable.
7. Electronic Goods
When you purchase an electronic — especially an expensive one — you may only get a very basic manufacturer’s warranty (or no warranty at all). If you pay for the item with a debit card, you will likely need to purchase an additional warranty if you want to be covered.
You can eliminate this extra expense by paying for the item with a credit card. This is because many card issuers provide built-in warranties for electrical items. So, if the worst happens and you need a fix or replacement, you are covered without having to part with any more of your hard-earned cash.
8. Gas Station Expenses
Fraud doesn’t only occur online. Many scammers are making the gas station their target, which means that using your debit card here could potentially result in becoming their next victim.
By using your credit card, you are not going to eliminate the chances of being a victim of fraud, but you will be given additional protection since many card providers give their customers greater security when it comes to fraud. This makes it much easier to get back your money than if you use a debit card.