Want to Make a Big Purchase With a Credit Card? Do This First

Credit card sign-up bonuses can offer an excellent way to earn rewards points fast.

When used responsibly, credit cards can make for an easy way to pay for everyday expenses. If you're looking to make a big purchase soon, you may want to check to see if you can earn bonus points by opening and using a new rewards credit card.

There are many reasons why you may need to make a large purchase. Examples include home repairs, a new appliance purchase, or a large unexpected bill. Using a credit card to cover a considerable expense could be advantageous. A large expense presents the perfect opportunity to open a new credit card and hit the minimum spend to earn a sign-up bonus.

But there are some considerations to make before you do this. If you can plan out a big purchase, you'll be more prepared and will be able to get the right card for your needs.

What to do when you need to pay for a large expense

If you have a large expense coming up, you should first check to see if you can pay for it with a credit card. If the business allows you to use a card, ask if you'll be charged credit card processing fees. Using your card may not make sense if you'll be charged fees.

Next, you'll want to find the right card for your goals. Don't be tempted to choose a card with the highest sign-up bonus offer.

Consider how the card earns rewards, what the annual fee is, and what other benefits it has in addition to the sign-up bonus. You'll also need to consider your credit situation because you want to apply for a card with good approval odds for your credit score.

You'll also want to check to see the minimum spend and how long you have to hit that spend requirement. Many card issuers require the minimum spend to be met within the first 90 days or three billing cycles.

Make sure you can meet the minimum without overspending on purchases you don't need. If you need to spend $4,000 within the first three months, will your big purchase hit that, or will you need to buy other things, too? You should only ever charge what you can afford to pay off right away.

Avoid credit card debt

Finally, consider how you will pay off your card. It's best to pay off the entire credit card balance monthly to avoid interest charges. Otherwise, interest charges can add up quickly, and high card balances can negatively impact your credit score.

The best option is to use money in your savings account to pay off a large credit card purchase. If you don't yet have savings set aside and can wait to make the purchase, spend a few months saving money first to avoid falling into credit card debt.

Credit card bonus offers are a great way to earn points fast

A credit card sign-up bonus can be an excellent way to earn many points at once and in a short time period. If you meet the minimum spend for a new card and earn the bonus offer, you'll be close to reaching your rewards goals.

How do credit card points work? You may be able to redeem them for a free hotel stay or a free flight or a statement credit -- which could make your next credit card bill more affordable.

If you're in the market for a new credit card, check out our list of best rewards credit cards.