Why I do all of my most expensive purchases with a credit card


Image source: Getty Images

Whenever I buy something that costs a lot of money, there is a payment method that I always use first. I put all possible expensive purchases on my credit card, rather than paying cash, writing a check, or using some other method of financing.

There are a few big reasons why I chose to pay on credit for every big expense, as long as the merchant or service provider accepts cards. Here is what they are.

1. I want the protection of a credit card

When I buy something expensive, I don’t want to end up wasting money on the purchase. My credit cards help reduce the chances of this happening.

My cards offer important purchasing protections, such as an extension of the manufacturer’s warranty. If the merchant does not deliver the item or it is not as promised, I can dispute the charge with my card issuer as well, and it will work to collect the money for me.

If I paid cash for the expensive items I buy, I wouldn’t get these benefits. Once the money was spent, it would disappear if the merchant did not meet his obligations. I also wouldn’t get an extended warranty unless I paid extra to buy one.

2. I want to earn rewards by credit card

Another major motivator that drives me to make expensive purchases on my credit cards is credit card rewards.

One of the cards I use offers generous cash back rewards that I can deposit directly into an investment account. Every time I buy something expensive, I get a small portion of the money I spent and use it to secure my future.

This cash back covers the cost of my purchase and would not be available with any other payment method, such as cash or a personal loan.

3. I am sure that I do not owe interest on my cards

Finally, the last big reason I use credit cards for all of my expensive purchases is that I’m confident that I’ll be able to pay off the cards before I have to pay interest on them.

This is because I only buy big ticket items if I budgeted for them first or saved for them over time. I put the purchase on a credit card and as soon as the bill arrives I can pay it. I end up reaping the benefits of cardholder rewards and protections without adding any additional fees.

If I had to borrow to finance an expensive purchase and pay it back over time, credit cards probably wouldn’t be my way of doing things – unless I can get a card with a 0% promotional rate and feel confident. to be able to fully repay the balance before the rate increases. This is because there are cheaper sources of funding, such as personal loans, and the high interest rates of credit cards on standard cards minimize the value of cardholder benefits.

Since I won’t have to pay interest, the benefits of rewards and shopping protections make credit cards the only payment method that makes sense to me when I’m buying something that costs a lot of money. money.

The best credit card erases interest until 2023

If you have credit card debt, transferring it to this top balance transfer card guarantees you an introductory APR of 0% until 2023! Plus, you won’t pay any annual fees. These are just a few of the reasons our experts rank this card among the best to help you get your debt under control. Read our full review for free and apply in just 2 minutes.

Read our free review

We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the advertisers included. The Ascent does not cover all the offers on the market. Editorial content for The Ascent is separate from editorial content for The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


Comments are closed.