Why I Make All My Most Expensive Purchases on a Credit Card

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A card provides added protection -- but there's a caveat.


Key points

  • Credit cards come with bonus perks that protect consumers making large purchases.
  • Putting expensive purchases on a credit card could make sense because of the cardmember benefits.
  • It's important to avoid interest when charging expensive purchases.

Whenever I buy something that costs a lot of money, there's one payment method that I always reach for first. I put every expensive purchase possible on my credit card, rather than paying cash, writing a check, or using another financing method.

There are a few big reasons why I have chosen to pay with credit for every big expense, as long as the merchant or service provider takes cards. Here's what they are.

1. I want the protection a credit card provides

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

My cards offer important purchase protections, such as an extension of the manufacturer's warranty. If the merchant doesn't deliver the item or it isn't as promised, I can also dispute the charges with my card issuer, and it will work to get the money back for me.

If I paid cash for the items I buy that cost a lot, I wouldn't get these benefits. Once the money had been spent, it would be gone if the merchant failed to fulfill their obligations. I also wouldn't get any kind of extended warranty unless I paid extra to buy one.

2. I want to earn credit card rewards

Credit card rewards are another major motivating factor driving me to put expensive purchases on my credit cards.

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

This cash back defrays the cost of my purchase, and wouldn't be available with any other payment method, such as cash or a personal loan.

3. I'm certain I won't owe interest on my cards

Finally, the last big reason why I use credit cards for all my expensive purchases is that I am confident I will be able to pay the cards off before I end up owing interest on them.

That's because I only buy costly items if I have worked them into my budget first or saved up for them over time. I put the purchase on a credit card and as soon as the bill comes, I can pay it off. I end up reaping the benefits of the rewards and the cardholder protections without adding any extra costs.

If I had to borrow to fund an expensive purchase and pay it off over time, credit cards probably wouldn't be the way I do it -- unless I could get a card with a 0% promotional rate and was confident I could completely repay the balance before the rate increased. That's because there are cheaper financing sources, such as personal loans, and the high credit card interest rates on standard cards minimize the value of any cardholder perks.

Since I won't get stuck paying interest, though, the benefits of the rewards and the purchase protections make credit cards the only payment method that makes sense for me when I buy something that costs big bucks.

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