Which Purchases Should I Charge to My Credit Card?

Q: I’m reevaluating my credit card use and wondering if I’m doing it right. Which purchases should I charge to my credit card?

A: Your credit score, which is the key to long-term loans at favorable rates, employment opportunities and more, depends on your credit card usage. To build credit, you need to use credit. You want to make sure you use your cards, but you don’t want to spend more than you can pay. In addition, there are some purchases that are best off being made with a credit card. 

Here are seven purchases you may want to charge to your credit card:

1. Electronics and appliances

It’s a good idea to pay for big-ticket items, like electronics and appliances, with your credit card. This will provide you with an insurance of sorts on these purchases, such as doubling up on the offered warranty. Some cards also offer price protection, which covers the difference if the price of an item drops after you’ve bought it. 

2. Car rentals

Here, too, paying with a credit card can provide you with a level of insurance on the car. The insurance likely won’t be as robust as temporary insurance you may purchase through the car rental service, but it will probably offer some collision coverage for the rental at no extra charge.

3. Purchases made abroad

When traveling and making purchases abroad, a credit card is usually your best method of payment. Cash always carries the risk of loss or theft. Debit cards may have fees for transactions made outside the country and may not be accepted at some vendors. Credit cards from well-known issuers, on the other hand, are accepted almost universally and are a lot safer to carry around than large sums of cash. In addition, many credit card companies offer a more favorable exchange rate than the average money changer you’ll meet during your travels. Finally, transactions made via credit card can always be disputed if the purchased item or experience turns out to be different than expected and advertised. 

When planning to use a credit card while abroad, be sure to let your issuer know of your travel plans. This way, they’ll approve the purchase instead of flagging it as fraud. 

4. Fixed monthly bills

If you’re looking for an easy way to build credit, you can set a fixed monthly bill, such as a subscription or payment for phone or internet service, to be charged to your credit card each month. This way, you’ll be making regular, scheduled payments by credit card, ensuring it always gets used. Just make sure to set a reminder for paying your credit card bill on time, or early, each month!

5. Online purchases

When shopping online, you’re usually best off paying with a credit card. Unlike other forms of payment, credit card transactions are always traceable and provide some form of coverage for fraud. Some debit cards also offer fraud protection, but this is usually minimal. Credit cards, on the other hand, can offer full protection against fraud as long as it’s reported within the required time frame. 

But wait – it gets better. Some credit cards also offer protection for items purchased online if they get lost or damaged in transit. This feature can be incredibly convenient when shopping online, especially when shopping on a new site. 

When using your credit card to pay for purchases online, be sure to follow these safety measures:

  • Never share your card information over email or text message.
  • Only shop on safe sites. Look for the “s” after the “http” in every site’s URL, and for the lock icon as well, as these indicate the site’s security.
  • Never click on an embedded link or download an attachment that’s allegedly sent by an online retailer.
6. Mobile phone bills

Another good candidate for credit card payments is your monthly mobile phone bill. Many credit card companies offer some coverage for phones that are lost, damaged or stolen if the card was used to pay a specific number of bills. You’ll need to be up to date on your phone bills and you may also be required to pay a deductible before you can claim coverage, but the security of knowing your phone is protected can make it more than worthwhile. 

7. Travel expenses

Many credit card companies offer unique rewards and perks for travel-related expenses. For example, some card issuers will cover flight cancellations or trip interruptions that are out of your control. In addition, your card may insure lost luggage and some medical emergency expenses while you’re traveling. These perks become even more attractive with a special travel-themed credit card, which tend to offer more points on travel-related purchases, too. If you’re a frequent traveler, consider opening one of these cards for ongoing benefits. Just be sure to take the interest rate into account as it may be steeper than you’d bargained for. 

Credit cards are a tricky business, but if you know when to use them, you can build a strong credit score, which can benefit your finances for years to come. 

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Learn More
Which Purchases Should Go on Your Credit Card? - CNET
The 5 types of expenses experts say you should never charge on a credit card - CNBC
Purchases You Should Always Make With a Credit Card - Investopedia