The content is accurate at the time of publication and is subject to change.

News: Things To Consider When Paying For Large Purchases With Your Credit Card - Credit-Land.com

Many of us put all their purchases on credit cards, and some of us pay with credit cards for big purchases only. No matter which side you are, it would be wise to consider some important things of using a credit card for large purchases and understand which cards would be a better fit.

It's good to know that by a "big purchase" different people think of different amounts. The definition of "big" will also change if you think of it in terms of your available credit and credit utilization ratio. The last compares the credit you are using with your credit limit.

If your credit limit is not enough for you, you can contact your credit card issuer and ask for a credit limit increase. Note that the issuer decides whether to grant you or not a higher credit limit. Plus, credit limit request will most likely result in a hard pull on your credit report, which may affect your credit score.

Another thing to consider is that using a credit card for big expenses can affect your credit score as it can increase your utilization. Higher credit utilization means your credit score may drop a bit. However, you should be able to increase your credit score as you pay off that purchase and lower your credit utilization.

When you consider which card to use to pay for large purchases, you can consider the following:

  • 0% intro APR on purchases: you can either apply for a credit card that offers low introductory rates or activate a 0% intro APR offer on your existing card to have some time to pay off your purchase without paying a penny in interest.
  • Bonus earning: if you want to earn some rewards and thus save on your purchase, look for cards with sign-up bonuses or the ones that have bonuses for meeting annual spending thresholds.
  • Rewards earning: when you want to maximize rewards, see if you have credit cards with higher rewards rate in specific categories. There are many cards that offer increased rewards in categories that change throughout the year. Just make sure you've activated those bonus categories, if it is required, before you make a purchase.
  • Protections: some cards offer protections that will cover you against damage, theft or loss of eligible items bought with the credit card. The limit of the coverage usually varies from issuer to issuer and from card to card. So, you'll want to check with your card issuer first, to make sure your purchase will be covered. In addition to purchase protection, your card may offer extended warranty protection. This benefit extends a manufacturer's warranty.

If you are planning to pay for a large purchase with your credit card, think about which of your current credit cards makes the most sense and brings the most value. Or you might want to apply for a new credit card to get that card benefit for your particular circumstances.

tags : Credit Card Benefits Shopping

Disclaimer: This editorial content is not provided or commissioned by the banks or credit card issuer(s). Opinions expressed here are the author's alone, not those of the banks or credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the banks or credit card issuer(s). Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult with the issuing bank of the card or account for terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are accurate as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.