Credit cards are highly useful and typically preferred over debit cards and cash. This payment method is much safer to use.
You are not using money from your funds when you use them for transactions. This way, they save you from potential fraud or theft.
You can also expect to benefit from rewards and perks exclusive to credit card holders. Let’s explore what to buy with a credit card and what you should avoid buying.
Buy Electronics and Appliances
If you’re looking to buy an electronic appliance like a refrigerator or TV, you should always use your credit card. Credit cards offer purchase protection, and high-priced items can leave a dent in your bank balance if stolen or damaged.
You will also benefit from warranties and insurance if you stick with credit cards when purchasing electronics. Consider getting a 0% APR credit card and using it to purchase electronics instead of opting for a personal loan.
You should keep in mind that you need to pay back what you owe as soon as the introductory period is over. If you miss this deadline, you’ll likely be charged high interest, which can be avoided.
Spend on Traveling Expenses
Booking flights and hotels through credit cards is preferred because you can benefit from many perks and rewards, such as air miles and travel discounts. You can look into getting a travel credit card for many of your travel needs and potentially benefit from free upgrades and more.
This can help you save money on vacations abroad. Many credit cards offer travel protection covering trip cancellation and lost property, which is another benefit of choosing to pay through credit.
Avoid Paying Your Rent or Mortgage
It’s possible to pay your rent or mortgage through your credit card. You might not be aware of 2-3% processing fees, which can negate any benefits and cost more.
Many think that making large payments through credit cards will be rewarded through perks and other advantages. However, the processing fee is high for such transactions, making it difficult to pay back what you owe. Another thing to avoid is paying property taxes through your credit card, which might indicate to the relevant authorities you cannot afford your home through your primary income.
Paying your rent or mortgage through a credit card might be relevant if you want to meet a minimum spending to benefit from a welcome bonus. In such a case, you should check whether the welcome bonus outvalues the processing fee and you factor in the possibility of interest.
Some transactions are preferred through credit cards because they offer many perks and rewards due to the high price. You must only buy the things you know you can pay back or risk ending up in debt with a bad credit score. When making certain purchases, like paying for your rent or mortgage, you should check how much processing fee you’ll be charged to avoid paying more.
