Which Purchases Should I Charge to My Credit Card?

Q: I’m reevaluating the ways I use my credit 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. 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 on a credit card. 

Here are six 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 might buy through the rental service, but it will probably offer some collision coverage at no extra charge.

3. Purchases made abroad
When traveling and making purchases abroad, a credit card is usually your best way to pay. Cash has the risk of loss or theft and debit cards may have fees for transactions that are made outside the country. They may not even be accepted at some vendors. Credit cards from well-known issuers, on the other hand, are accepted almost everywhere and are a lot safer to carry than large sums of cash. In addition, many credit card companies offer a favorable exchange rate.

4. Fixed monthly bills
If you’re looking for an easy way to build credit, pay a fixed monthly bill, such as a subscription or payment for phone or internet service, on your credit card each month. This will ensure regular transactions are made on your card. As long as you’re paying your credit card bill on time or early each month, you will show a pattern of responsible credit usage!

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 coverage for fraud. 

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 and the cardholder is up to date on their bills.

Use this guide to learn which purchases to charge to your credit card.