Should you use a credit card for large purchases?

6 min read
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Should you pay with plastic when you’re making a large purchase? Yes  — but only if you meet specific criteria and only if you have a plan. For example, using a credit card for a large purchase can be insanely smart if you have the cash to pay but want to use a rewards credit card to rack up points. On the flipside, it can also make sense to use a zero percent introductory APR credit card for a large purchase if you want to pay down your balance over time without interest. However, this only makes sense if you can pay your card off before your interest-free introductory offer ends.

There are other scenarios that make sense as well, including using a credit card in order to take advantage of consumer protections, like extended warranties or purchase protection.

Just remember that credit cards aren’t the best option if you need a long-term loan, mostly because of their high interest rates. If you need to borrow money for a large purchase and pay it off over several years, consider a personal loan.

How to make large purchases with a credit card

Still planning to use a credit card for your large purchase? This can be an excellent plan if you have a goal in mind and a plan to pay off your balance. Here’s everything you need to think about before you select a credit card to suit your needs:

If your goal is earning rewards…

Don’t worry about your credit card’s interest rate if your goal is earning rewards and you have the cash to pay. You’re going to charge your large purchase to a credit card and pay it off right away, so you should focus on the “earning” side of the equation instead. With that in mind, you should:

  • Compare credit card signup bonuses in order to maximize your spending.
  • Consider signing up for a few cards with excellent bonuses then spreading your purchase out over multiple forms of payment.
  • Consider earning rates for your purchase, including the fact that some cards offer “bonus” categories that let you earn more rewards.

If you want to gain consumer protections…

Maybe you also want to take advantage of consumer protections that can help you save money if something happens to your purchase later on. Consider these tips as you compare cards:

  • Look for credit cards that offer purchase protection against damage or theft, which can be incredibly useful if you want to protect large purchases you make with your card.
  • Consider cards that offer extended manufacturer’s warranties on large qualifying items like electronics and appliances.
  • Also, look for cards that guarantee returns on some item, even if the store won’t take them back.

If you want to save money on interest…

While credit cards come with a ton of perks, it’s possible you just need a low-cost, short-term loan. Balance transfer credit cards that offer zero percent interest on purchases can work well in this case, but here’s what you should consider:

  • Look for cards that offer zero percent APR on purchases for the longest time possible, and without some associated fees, like annual fees.
  • Make sure you have the ability to repay your large purchase before your card’s introductory offer ends. If you don’t, you’ll pay the regular variable APR on your purchase after that, which might be surprisingly high.
  • Also, note that some cards offer both an introductory zero percent APR on purchases and rewards. Choosing a card that offers both lets you double up on benefits.

Best credit cards for large purchases

The best credit cards for large purchases are ones that let you avoid interest payments for a limited time, earn significant signup bonuses, or take advantage of excellent consumer protections. Some cards on our list offer all of those perks, so make sure to check them out.

U.S. Bank Visa® Platinum Card — Generous zero percent introductory APR offer

The U.S. Bank Visa® Platinum Card made our list thanks to its excellent introductory zero percent APR offer. When you sign up for this card, you’ll benefit from zero percent APR on purchases and balance transfers for 18 billing cycles, followed by a variable APR of 15.49 to 25.49 percent (based on creditworthiness).

This card doesn’t charge an annual fee, and you’ll also receive perks like cell phone protection insurance and free access to your credit score.

Why this card is excellent for large purchases: You’ll have a full 18 billing cycles to pay off your large purchase without any interest payments.

The information about the U.S. Bank Visa Platinum Card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.

Chase Freedom® — Zero percent introductory APR plus rewards

The Chase Freedom® is another smart card for large purchases, and there’s more than one reason why. For starters, this card gives you zero percent APR on purchases and balance transfers for a full 15 months, followed by a variable APR of 16.49 to 25.24 percent. You can also earn a $150 bonus when you use your card for at least $500 in purchases within three months of account opening, which should be easy to do since you’re already planning a large purchase.

In terms of ongoing earnings, this card gives you 5 percent back on up to $1,500 spent in quarterly bonus categories and 1 percent back on everything else you buy (activation required). Best of all, there’s no annual fee and you’ll get consumer protections like purchase protection and extended warranties on qualifying purchases.

Why this card is excellent for large purchases: You can earn a signup bonus and ongoing rewards, then pay your purchase off over 15 months without any interest.

Discover it® Miles — Zero percent introductory APR and flexible travel rewards

There are several reasons to consider the Discover it® Miles for your large purchase, including the fact you’ll earn a flat 1.5x miles for each dollar you spend. Discover will also double all the rewards you earn after the first year.

You’ll also qualify for zero percent interest on purchases made with your card for a full 14 months, followed by a variable APR of 13.49 to 24.49 percent. There’s no annual fee, and you’ll even get access to your credit score for free on your monthly credit card statement.

Why this card is excellent for large purchases: You can earn double the rewards for the first year with Cashback Match and pay your purchase off without interest for 14 months.

Chase Sapphire Preferred® Card — Generous signup bonus

The Chase Sapphire Preferred® Card is another no-brainer for your large purchase, but only if you have the cash to pay your balance in full right away. This card doesn’t come with zero percent APR for any length of time, but you can earn 60,000 points when you spend $4,000 within three months of account opening, which is worth $750 toward travel when redeemed through Chase.

You’ll also earn 2x points on dining and travel and 1x points on all your other purchases, and that’s on top of the bonus you can earn right away. A $95 annual fee applies, but this card is well worth it considering the generous signup bonus. As an added bonus, this card comes with trip cancellation/interruption insurance, baggage delay coverage, primary auto rental insurance, and more.

Why this card is excellent for large purchases: Earn a big signup bonus and ongoing rewards for your large purchase.

Capital One® Quicksilver® Cash Rewards Credit Card — Zero percent introductory APR and excellent flat-rate rewards

Also make sure to check out the Capital One® Quicksilver® Cash Rewards Credit Card if you want to earn rewards while paying off your purchase slowly over time. This card gives you a flat 1.5 percent back for each dollar you spend, but you can also qualify for a $150 cash bonus when you spend $500 on your card within three months of account opening.

There’s no annual fee, and you can benefit from zero percent APR on purchases and balance transfers for a full 15 months, followed by a variable APR of 15.49 to 25.49 percent. You’ll also get extended warranties on qualifying items purchased with your card.

Why this card is excellent for large purchases: You can earn a signup bonus and flat-rate rewards on your spending, then pay off your purchase over more than a year without any interest.

When you shouldn’t use a credit card for a large purchase

The offers above probably seem enticing, but there are plenty of situations where it doesn’t make sense to use a credit card for a large purchase. As we mentioned already, the high rates that credit cards charge make them a poor choice if you need a long-term loan. If you need to borrow money and pay it off over a period of several years, for example, a personal loan or home equity loan could be a better deal.

Also stay away from credit cards if you:

  • have had trouble keeping up with credit card bills in the past
  • struggle with other types of debt
  • worry about overspending
  • can’t really afford the large purchase you want to make
  • aren’t sure you can pay your balance off right away or before a card’s introductory APR offer ends

At the end of the day, you should only use a credit card for a large purchase if you’re getting something in return, whether that’s cash back, travel rewards, or no interest for a limited time. If you’re unsure whether you’ll end up “ahead” with plastic, you should wait until you can pay for your large purchase in cash.