Published in: Credit Cards | Nov. 7, 2019

4 Reasons to Make a Big Purchase on a Credit Card

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Making a big purchase on a credit card can be a smart move. Here's why. 

If you're making a big purchase, you have to figure out how to pay for it. One of the best options available is to put your purchase on a credit card

While you don't want to end up paying interest -- which is always a risk when charging big items -- using your credit card has some significant benefits that you'll want to take advantage of.

Woman carrying a number of colorful shopping bags on her arms.

Image source: Getty Images

In fact, there are four big reasons why charging big purchases on a credit card can make a whole lot of sense. 

1. To take advantage of extended warranties, purchase protection, and price protection

If you charge your big purchase on your card, many credit cards offer cardholder perks that can help protect it. For example:

  • Once your manufacturer's warranty expires, credit card extended warranties give you additional time on eligible purchases. Getting an extra year of protection could make a big difference if your item breaks.
  • Purchase protection will cover the costs of repair or replacement if an item you buy is stolen or damaged within a limited time. If you buy an expensive item that you accidentally drop and break, you might be able to save hundreds of dollars on replacement depending how much protection your card offers. 
  • Price protection ensures that you don't spend more than necessary. You could get reimbursed if your card offers this service and the price of your purchased item drops within a certain period after you buy it. 

If you pay cash or use a check or debit card to buy your item, you'll miss out on all of these added protections. Just be sure to check and see if your credit card actually offers any of them. If it doesn't, it may be worth signing up for a new card before buying something expensive. 

2. To ensure you have help in case something goes wrong

If you buy something expensive and the merchant doesn't deliver or the item isn't as expected, it could be very difficult to get refunded if you paid with cash or check. But if you charged the purchase, you could dispute the charges. 

The card company will launch an investigation, reach out to the merchant, and determine if you in fact got the item you paid for or not. If you didn't, the card company may remove the charge from your bill so you aren't out the cash. 

3. To take the opportunity to pay off your purchase over time 

You always want to pay off your balance in full when you make a big purchase if you're going to be charged interest otherwise. But there are some 0% APR cards available that allow you to go as long as 12 to 15 months without incurring interest charges on purchases. 

If you use one of those cards to buy expensive items, you can get more time to pay them off  without paying any interest at all. This can be a smart financial move if you need something now but can't afford to pay for it in full. Just be sure to check the terms and conditions to understand when your purchase has to be paid off. Make sure you don't miss any payments and that you pay off the purchase in full before the promotional period ends.

You'll also want to make certain the purchase is an important one, as simply having access to a 0% APR card isn't a good reason to run up credit card debt or buy items you can't really afford to pay for.

4. To earn credit card rewards

Finally, the last big reason to charge expensive purchases is because you can get rewarded for the spending you're doing. 

If you have a rewards card, you can earn points, miles, or cash back. And the bigger your purchase, the more valuable these rewards. If you charge something that costs $2,000 and get 2% cash back, using a credit card to buy that item will net you $40 in rewards.

While this isn't a fortune, it's $40 you wouldn't have if you'd paid with cash, check, or a debit card that doesn't offer rewards. 

Consider using your card for large purchases 

As you can see, there are ample benefits to using your credit card for big purchases. You just need to ensure you've got the right credit card to meet your needs and that you pay off the charges before any interest comes due. 

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