Credit cards are scary, dangerous little pieces of plastic that should only be used in emergencies!
Well, not exactly. Yes, credit cards have the potential to destroy your finances. But credit cards can also very powerful tools for improving your finances as well as your general standard of living. It’s definitely the best way to pay if you want to improve your credit.
Like so many things, it’s all about how you use them.
You’ve heard all the obvious advice before: pay them off every month, don’t max them out, never miss a payment.
Perhaps most importantly, don’t use them to buy unnecessary things that you couldn’t otherwise afford. This is the golden rule of responsible credit card use. But what should you be using them for?
Here are 10 purchases that you should always put on your credit card if you can.
- Plane tickets
Paying for plane tickets with a credit card can score you some big rewards, especially if you have a travel rewards credit card. Plus, airline credit cards can get you extra perks like discounts on drinks and free checked bags.
Another big reason to pay for plane tickets with your credit card is that many cards offer some form of trip insurance. Should you miss your flight or need to cancel, you may have access to some form of reimbursement from your credit card, even if the airline won’t reimburse you. Some credit cards even include insurance for lost or damaged baggage.
Much like paying for a flight with your credit card, paying for a hotel stay with your credit card gets you access to more travel rewards and trip protection. If you use your hotel branded card, you can often double or even triple the amount of hotel points you gain. Aside from that, many hotels put fairly large holds on your card, so using a credit card won’t tie up your funds.
- Rental cars
This one is important. If you pay for your rental car with a credit card that offers rental car insurance, you could find yourself insured for free. Not only will this save you from having to add on all the expensive extra insurance offered by rental agencies, but should you wreck or damage the car, there’s a good chance your credit card company will cover it.
- Dining out
If you have a credit card that offers extra points or cash back on dining, putting that nice steak meal on plastic is a wise idea.
Plus, many credit cards offer discounts and promotions with certain restaurants. Just make sure you aren’t ordering so many filet minions that you can’t pay it off in full every month.
- Holiday shopping
The holiday season can be rough on the wallet. Many people turn to credit cards to buy things they can’t afford. While this is not a good idea, using a credit card to get extra cash back during the holidays can help ease the stress a bit.
Opening a store card with a great promotional discount can also save you a lot of money, but only if you pay it off right away. Those cards are notorious for having sky high interest rates.
You could even pick one store with good credit card rewards on their store card, such as the Amazon credit card, and do all of your holiday shopping there.
Another method for easing the financial strain during the holidays is to get yourself a credit card with a 0% promotional APR. These financing offers can help you spread out the costs without having to pay interest. However, if you don’t pay it off entirely by the end of the introductory period, you could end up with huge interest fees that were compounding the whole time.
- Big purchases
The bigger the purchase, the bigger the rewards. While big ticket items are probably the most popular purchases made on credit cards, it’s usually for the wrong reason.
You should always be able to pay off your credit card in full before interest kicks in. However, putting all of your major purchases on a card with a good rewards program can really pay off, literally.
Any time you’re utilizing the services of someone and paying them up front, especially when those services are expensive, it’s a good idea to charge them to your credit card.
If it turns out that the service was not performed to your standards, or perhaps it was not performed at all, it’s much easier to dispute a charge on a credit card than it is on most debit cards.
If an electronic device or appliance breaks, is damaged, or stolen, your credit card is far more likely to offer protection. In fact, they might even offer you better coverage than a warranty when it comes to replacing your damaged items.
- Online purchases
This one goes in line with the better protections argument. If you’re ordering things online, especially from a private seller, it’s much easier to dispute a charge if the product that shows up on your doorstep isn’t what you expected, or it doesn’t show up at all.
- Purchases while abroad
Finally, it’s generally better to rely on your credit card rather than cash or a debit card while traveling internationally.
Many credit cards don’t charge international transaction fees, whereas most debit cards do (and they’re not generous). It’s also safer than carrying lots of cash, and your plastic will usually offer a much better exchange rate than a money exchange center.
Now that you know exactly which purchases you should put on you’d credit card, make sure not to charge any of the 10 worst purchases to make with a credit card.