The Bank of America content in this post was last updated on 03.03.2020
Credit cards aren’t generally seen as the best option when it comes to borrowing money, but there are plenty of ways using plastic can get you ahead — particularly when you have a large purchase to make. The key to benefiting when you pay with a credit card is making sure you’re using the right card for your needs. This could mean choosing a credit card that grants zero percent APR on purchases for a limited time, a card that doles out generous cash rewards or a credit card that gives you both.
How to use a credit card for a big purchase
With that in mind, the best credit card for a large purchase depends on the goals of the spender and how much cash they have on hand. As you compare credit cards to find the best one for your needs, you should look for and compare the following factors:
- Interest rate: Many credit cards grant zero percent APR on purchases and balance transfers for up to 18 months. Cards in this category can work as a “short-term loan” with zero interest provided you pay your large purchase off entirely before the introductory offer ends.
- Ongoing rewards: Many credit cards let you earn rewards on your spending, ranging from cash back to travel rewards or flexible points. Because you earn more rewards the more you spend, large purchases can help you rack up points fast.
- Initial bonuses: Many rewards credit cards also let you earn an initial bonus when you meet a minimum spending requirement within a few months. These bonuses can be worth $500 or more on their own and they’re given out on top of rewards earned as a percentage of your spending.
- Consumer protections: Also keep in mind that some credit cards offer cardholder protections that can be especially beneficial for large purchases. Perks to watch out for include purchase protection, extended warranties and guaranteed returns.
Once you have a better idea of the factors that are most important to you, you can begin your search for a card that offers the benefits or rewards you want the most.
Best overall credit cards for large purchases
The following credit cards can work well for anyone who needs to make a large purchase and has the cash to pay off their balance right away.
Signup bonus: 80,000 points when you spend $4,000 within three months of account opening, which translates to $800 in statement credits or $1,000 toward travel redeemed through the Chase portal
Ongoing rewards: 2x points on travel and dining and 1x points on all other purchases
Purchase benefits: Purchase protection and extended warranties
Annual fee: $95
Why it’s good for large purchases: Earn a generous initial bonus on your large purchase and benefit from purchase protection or an extension on the manufacturer’s warranty on eligible items.
Signup bonus: 50,000 bonus miles when you spend $3,000 on your card within three months of account opening
Ongoing rewards: 2x miles on all purchases
Purchase benefits: Extended warranty protection
Annual fee: $0 the first year; $95 after that
Why it’s good for large purchases: Collect 50,000 miles worth $500 in travel right away when you meet the minimum spending requirement of $3,000 in the first 3 months and benefit from extended manufacturer warranties on eligible items.
Best 0% APR credit cards for big purchases
If you’re interested in rewards but really need to be able to pay your large purchases down without interest over time, credit cards that offer zero percent APR on purchases are your best bet. Consider these cards that offer zero percent for a limited time.
Signup bonus: $200 cash bonus when you spend $500 on your card within three months of account opening
Ongoing rewards: at least 1.5 percent back on purchases
Purchase benefits: no interest on purchases for 15 months, followed by a variable APR of 14.99 to 23.74 percent; purchase protection and extended warranties
Annual fee: $0
Why it’s good for large purchases: Earn a signup bonus and ongoing rewards on your spending, then pay your balance off over 15 months without any interest.
Signup bonus: $150 cash bonus when you spend $500 on your card within three months of account opening
Ongoing rewards: 1.5 percent back on all purchases
Purchase benefits: no interest on purchases and balance transfers for 15 months, followed by a variable APR of 15.49 to 25.49 percent; extended warranties
Annual fee: $0
Why it’s good for large purchases: Earn an easy cash bonus and ongoing rewards before paying off your large purchases without interest for a full 15 months.
Best signup bonuses to earn on big purchases
The following cards are also good for large purchases, mostly because they let you earn a generous initial bonus within the first few months.
Welcome bonus: 20,000 points worth $200 in cash redemption value when you spend $1,000 on your card within three months of account opening
Ongoing rewards: 3x points on dining, gas stations, rideshares, transit, flights, hotels, homestays, car rentals and popular streaming services plus 1x points on other purchases
Purchase benefits: introductory offer – no interest on purchases and qualifying balance transfers for the first 12 months followed by a variable APR of 13.99 to 25.99 percent; cell phone protection (a deductible applies)
Annual fee: $0
Why it’s good for large purchases: Use this card to earn a generous welcome bonus as well as ongoing rewards, then pay off your large purchase within the first 12 months without any interest.
Signup bonus: 50,000 bonus points worth $500 when you spend $3,000 on your card within 90 days of account opening
Ongoing rewards: 2 points per $1 spent on travel and dining and 1.5 points per $1 on other purchases
Purchase benefits: Return protection and purchase security
Annual fee: $95
Why it’s good for large purchases: You’ll earn a big initial bonus on this card when you spend $3,000 within the first 90 days. You can also benefit from return protection and purchase security on eligible items.
Tips to help you maximize large purchases made with a credit card
Picking a new credit card to use for a large purchase may be an easy feat, but making sure you wind up “ahead” in the end takes some planning and self-discipline. Consider these tips to help you make the most of large purchases this year:
How to craft a plan to maximize introductory no-interest offers?
If you’re mostly interested in avoiding interest on purchases with a credit card, make sure to compare cards to find the longest zero percent APR offer available. Since the average credit card APR is currently 17.27 percent, you’ll also want to make sure you can afford to pay enough each month so your full balance is paid off before your introductory offer ends.
Why you shouldn’t overspend to earn more rewards?
If your goal is maximizing large purchases to earn rewards, make sure you’re only using credit cards for purchases you planned to make anyway. If you spend more than you actually wanted to just to earn more points, you won’t really be any better off in the end.
Should you consider pairing a few different cards to maximize initial bonus offers?
You could potentially pick up a few new cards and use multiple forms of payment for your large purchase. This strategy can work well if you need to make an extremely large purchase that would help you qualify for several signup bonuses at once. Just remember to watch out for credit card interest and annual fees that could eat away at your return.