Credit Cards

Make a big purchase? How to choose which credit card to put it on

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It is important to charge expenses strategically. Here’s how to map out your strategy.

Key points

  • Different credit cards offer different benefits and rewards programs.
  • When making a large purchase, it’s important to see if you can get additional cash back or other benefits.

Chances are you’re used to charging more than one credit card. When it comes to small, everyday purchases, you may not give much thought to which card you’re pulling out, especially if all of your cards have similar rewards programs for things like groceries, gas, and other things you spend. money all the time.

But if you’re preparing to make a larger purchase, you’ll want to choose the credit card you use wisely. Ask yourself these questions to decide which of your credit cards is best for your next big expense.

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1. Can you take advantage of a registration bonus?

While it’s possible to make a large purchase on one of your existing credit cards, an even better bet might be to apply for a new one and put it on there. Many credit cards offer sign-up bonuses that allow you to earn additional points or cash back for meeting a certain spending requirement within a few months of opening your account.

Let’s say you qualify for an offer that gives you a $300 sign-up bonus for spending $3,000 within three months of opening a new credit card. If you normally only spend $800 a month on your credit cards, you may have a hard time meeting that requirement. But if you’re planning to make a $1,500 furniture purchase out of the blue, that offer makes sense.

2. Is there a category of renewable rewards that pays you more?

Some credit cards offer additional rewards or cash back in rotating categories. It pays to see what they are when making a large purchase.

Let’s say you plan to update your wardrobe to go back to work, so you’ll spend $400 at your favorite department store. If one of your credit cards offers 5% cash back instead of the usual 1% on department store purchases that quarter, that’s a good card to use.

3. Are there additional benefits for using a specific card?

It’s not just bonus points or cash back that you need to consider when deciding which card to use for a large purchase. You should also pay attention to some of the peripheral benefits you might enjoy.

If your big purchase is a flight, for example, then you could pay that charge on a travel rewards credit card. Using one of these cards can make you eligible for benefits like free checked bags and discounts on in-flight purchases. You can also get more built-in protection when you book flights with a travel rewards card in case something goes wrong, like a flight delay. However, to be clear, that coverage may not necessarily replace actual travel insurance. You may still want to purchase a separate policy for maximum protection.

Chances are you only make big purchases from time to time. It pays to be strategic about the credit card you use. Reviewing these questions could help you make the right decision and receive the most benefit.

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