Why I charged a cruise on my credit card and how I’m still reaping rewards

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In 2016, I was desperately in need of a vacation. My freelance career was growing, but I didn’t have the kind of cash flow that would allow me to book the trip I wanted to take.

So I decided to fund my vacation—a week-long music, comedy and tabletop gaming cruise—by applying for the Discover it® Cash Back card. I was accepted within minutes, and as soon as my brand-new credit card arrived in the mail, I used it to book my cruise.

Why did I put a $2,535 cruise ticket on a credit card? Because the Discover it Cash Back comes with 14 months of 0 percent intro APR on purchases and balance transfers (11.99 percent to 22.99 percent variable APR thereafter). If you’re in a situation where you want to make a big purchase but don’t quite have enough cash to cover it (or would rather cushion the blow by splitting up payments), a 0 percent intro APR card can allow you to make your purchase and pay off your balance before it starts to accrue interest.

Using a 0% intro APR card to fund a large purchase

Booking a cruise on the Discover it Cash Back turned out to be a good choice for me. But it’s important to remember that using a credit card to fund a large purchase can be a risky move. If you don’t pay off your big purchase in full before the intro APR period ends, you’ll start accruing a lot of interest on your unpaid balance, making your purchase more expensive in the long run.

In my case, I was able to take myself on that much-needed vacation knowing I could make payments each month to pay it off in full before the zero-interest promotional rate expired. But if you miss a credit card payment, your issuer could pull your promotional interest rate and start charging you regular interest right away. Be sure to make at least the minimum credit card payment on time, every time.

Making the most of a card after the intro APR period

How does the Discover it Cash Back card fit into my life now that my vacation—and my zero-interest promotional rate—is over?

Right now, I use the Capital One Quicksilver Cash Rewards Credit Card for the majority of my day-to-day spending since I like the simplicity of a flat-rate cash back card that gives me 1.5 percent cash back on every purchase.

But that doesn’t mean the Discover it card never makes it out of my wallet. I use my Discover card for purchases that I make with my partner and the credit card bill gets paid out of a joint bank account. It’s a good way of designating “yours, mine and ours” spending—and for us, it’s an excellent way of earning cash back on bonus categories like restaurants and Amazon.com, since that’s where a lot of the “ours” spending is going these days.

Taking advantage of the Discover it Cash Back’s unique rewards structure

There’s more to the Discover it Cash Back card than 14 months of 0 percent intro APR on purchases and balance transfers—a lot more.

The Discover it Cash Back card has a great cash back rewards structure. Cardholders can earn 5 percent cash back on select spending categories that rotate every quarter (after activation), for up to $1,500 in purchases per quarter, then it’s 1 percent. This works out to $300 in cash back each year if you maximize your rotating cash back categories every quarter.

Discover’s cash back categories include places like grocery stores and gas stations and specific retailers like Walgreens and Amazon. For the last few months, my partner and I have enjoyed leaning into restaurant spending to make the most of this quarter’s bonus category (which also includes Paypal). Discover’s Q4 2021 bonus category includes Amazon.com, Walmart.com and Target.com, which will come in handy for all my upcoming holiday shopping.

If you want to know which categories will earn higher cash back in the future, you can use Discover’s cash back calendar to look ahead and plan your shopping. Discover’s Cashback Match program will match all the cash back rewards you earn during your first year. So if you max out your 5 percent categories each quarter and earn $300 in cash back, Discover will match it with with another $300 ( 5% back on rotating categories each quarter on up to $1,500 in combined spending per quarter and then 1% (activation required)).

Other 0% intro APR cards to consider

If you’re thinking about using a 0 percent intro APR credit card to book a cruise or make a similarly large purchase, you might want to consider the Citi® Diamond Preferred® Card. The Citi Diamond Preferred Card is currently offering 0 percent intro APR for 12 months on purchases and 21 months on balance transfers (13.74 percent to 23.74 percent variable APR thereafter)—making it one of the best zero interest cards on the market for balance transfers. Balance transfers must be completed within 4 months of account opening.

Unfortunately, the Citi Diamond Preferred Card doesn’t offer any rewards on purchases—which means that if you want to use a zero-interest credit card offer to fund a vacation while also earning cash back, points or miles on your trip, you’re going to have to look into some other options.

The Chase Freedom Unlimited® card, for example, offers 0 percent intro APR on purchases for 15 months (14.99 percent – 23.74 percent variable thereafter) —as well as 5 percent cash back on travel purchased through Chase Ultimate Rewards, 5 percent cash back on Lyft purchases (through March 2022), 5 percent cash back on grocery store purchases (not including Target or Walmart purchases) on up to $12,000 spent in the first year, 3 percent cash back on dining and drugstores and 1.5 percent cash back on all other purchases.

Plus, the Chase Freedom Unlimited card is currently offering one of the best welcome bonuses available to new cardholders: $200 cash back after spending just $500 in the first three months. Many credit cards require you to spend thousands of dollars before earning your bonus—so take advantage of this offer while you can!

Of course, you could always go with my choice of the Discover it Cash Back card. Five years ago, it allowed me to book and pay off a vacation without paying interest. This summer, it helped me earn 5 percent cash back on restaurants (earn 5% back on rotating categories each quarter on up to $1,500 in combined spending per quarter and then 1% (activation required). And, starting in October, it’s going to ease my holiday budget and take the edge off holiday spending at some of the largest retailers.