4 Big Purchases You Should Make with a Credit Card

Give yourself rewards, extended warranties and additional perks by using your credit card for these major purchases.

Smart financial planning means saving up for a major purchase and not pulling the trigger until you have the cash on hand. But there’s no reason you need to use cash (or a debit card) to actually make the purchase when there are so many benefits to using a credit card. Savvy consumers know what to buy with a credit card to take advantage of rewards, extended warranties and fraud protection.

1. Appliances and Electronics

Big-ticket items like a new refrigerator or stereo are prime examples of purchases that you should consider making with a credit card. The best cards offer extended product warranties, price protection and purchase protection. So if the fridge starts leaking within six months, you see it on sale a month later or your teenager manages to immediately break the ice dispenser, you may be able to enjoy free repairs or money back. Be sure to read the terms of your card’s benefits carefully before making a purchase so you understand what is and what is not covered under your card’s coverage.

And that’s not to mention rewards. Your new television and stereo system costs the same whether you pay in cash or credit.

Discover It Card

Earn big‑time cash back that never expires.

Sponsored

Earn big‑time cash back that never expires.

Sponsored

Get the credit card that's got it all: Discover it®.

Discover it® gives you big‑time cash rewards with 100% U.S.‑based customer service.

Discover it Card

Sponsored

Get the credit card that's got it all: Discover it® 

Discover it® gives you big‑time cash rewards with 100% U.S.‑based customer service.  

Sponsored

Earn big‑time cash back that never expires with Discover it®

Earn big-time cash back that never expires with Discover it. See Rewards

2. Travel Plans

Many people have no idea their credit card offers a variety of travel services. Be sure to research what your card has to offer before making travel arrangements. You may find that booking with a credit card gives you access to rental car insurance, travel interruption insurance and even assistance with locating lost baggage or re-booking tickets.

Travel rewards cards also provide cash back, points or miles for every booking (and some for everyday spending as well). Card members can rack up rewards to use for a dream trip while traveling for business or even just using the card for day-to-day expenses.

3. Car Rentals

The majority of car rental companies won’t accept a debit card to secure a reservation, so you may not have a choice but to use your credit card. Even when other options are available it’s best to book with your credit card as many offer additional insurance. Always research what your existing auto insurance policy covers on rentals along with additional coverage from your credit card before accepting the rental company’s insurance. Otherwise you could end up paying for coverage you already have.

4. Big-Ticket Purchases Online

With the rise of e-commerce more and more people are making major purchases such as furniture or appliances online. While it’s certainly convenient to comparison shop for a dining room table from the comfort of your living room instead of running all over town, there is a risk of identity theft on the Internet. Using a credit card instead of a debit card for online purchases provides additional protections.

The Fair Credit Billing Act provides federal protection for consumers against unauthorized charges on both credit and debit cards1. However, your liability for unauthorized charges on a credit card stops at $50, while liability for charges on a debit card can go up to $500 if you wait more than two business days to report the loss or theft1. Even when you’re reimbursed for false charges on a debit card there may be a waiting period before receiving your money back because the funds are already withdrawn from your account. 

Many of the top-rated credit cards offer additional protection from fraudulent charges. For example, Discover card alerts cardmembers of any unusual activity 24/7 through email, phone or text. With the $0 Fraud Liability Guarantee cardmembers are never responsible for unauthorized purchases made on their card.

Of course all of these recommendations only apply when you have the cash to pay off the big purchase in the same billing cycle. Never use a credit card for a purchase you can’t afford just to earn rewards or perks. Also be cautious about making purchases anywhere you’re concerned about the security of your card, such as non-encrypted websites. Discover card believes that consumers should be armed with the information they need to help them make informed credit decisions.

Resources:

1. http://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards

Discover card believes that consumers should be armed with the information they need to help them make informed credit decisions.

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.

Up Next  

How to Save Money on Travel: 5 Hacks from the Savviest Spenders

Explore More Topics:

You Might Also Like...

Pay off debt faster with a balance transfer. Get Started.