Making a major purchase? How to choose which credit card to put it on

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It is important to strategically allocate costs. Here’s how to map your strategy.

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

Check out the best The Ascent credit cards for 2021

Chances are, you’re used to charging multiple credit cards. When it comes to small, day-to-day purchases, you might not think too much about which card you’re throwing away, especially if all of your cards have similar reward programs for things like groceries, gas, and other things you spend. money for all the time.

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

1. Can you take advantage of the registration bonus?

While it may be possible to make a large purchase with one of your existing credit cards, it would be even better to apply for a new one and put it on it. Many credit cards offer sign-up bonuses that allow you to earn extra points or get refunds for meeting certain spending requirements within months of opening an account.

Let’s say you’re eligible for an offer that gives you a $ 300 signup bonus for spending $ 3,000 within three months of opening a new credit card. If you usually only spend $ 800 a month on your credit cards, you may have difficulty meeting this requirement. But if you are planning to buy furniture for $ 1,500, it suddenly makes sense to take advantage of this offer.

2. Is there a renewable pay category that will pay you more?

Some credit cards offer bonus rewards or cash backs in revolving categories. When making a major purchase, it is helpful to see what it is.

Let’s say you’re planning to upgrade your wardrobe to get back to work, so you spend $ 400 at your favorite department store. If one of your credit cards offers 5% cashback instead of the usual 1% on department store purchases this quarter, this is a good card to use.

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

When deciding which card to use for a large purchase, you should consider not only bonus points or cashback. You should also look out for some additional benefits that you might like.

If your major purchase, for example, involves a flight, you might be charged if you charge that amount to a credit card to encourage travel. Using one of these cards may qualify you for benefits such as free checked baggage and discounts on in-flight purchases. You can also get additional built-in protection when you book flights with a bonus travel card in case something goes wrong, such as a flight delay. Although, to be clear, this coverage may not necessarily replace actual travel insurance. You can still purchase a separate policy for maximum protection.

Chances are, you only make large purchases from time to time. It is strategically important to match the credit card you use. Answering these questions will help you make the right choice and get the most out of it.

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