Credello: Tips for When to Buy With a Credit Card


Credello: Credit cards are quickly becoming a more popular payment option than cash, but is it the best thing for your finances to pay with plastic? Here are some considerations about what should go on the card and what shouldn't.

Considerations before deciding whether or not to charge a purchase

Before putting anything on a credit card, be sure to ask yourself a few things:

1. What's your credit limit? The first thing you should consider immediately is whether your card has a limit high enough to pay for your purchase. If you're just starting to build (or rebuild) your credit, you might have cards with very low limits, so you'll need to be extra aware of how much you're spending, as going over your limit could result in your card getting denied, additional fees, etc. If you're in a situation where you need higher limits, consider getting a small installment loan to build credit and show lenders how responsible you can be in paying off debt.

2. Is this something you can afford to pay with cash? Credit cards should never be used as sources for "extra" money, as the interest that gets tacked onto your purchases can wreak havoc on your finances. If you can't afford to pay with cash and it isn't an emergency expense, like getting your car towed or paying for a hospital visit, then you shouldn't put it on your card, either.

3. What benefit will paying with a credit card get you? Many cards offer cashback for purchases at specific shops or spending categories, while others give you reward points that can be converted into gift cards or even discounted travel options. If you can make your spending habits get you a little extra back, using a card instead of cash might be worth it.

Purchases you should put on a credit card

1. Travel - Not only can using a credit card for travel get you nice rewards, but it can also help you avoid getting hit with unexpected fees or debt. Many cards offer bonus points for spending on airfare, hotels, and other types of travel-related expenses. Plus, many cards provide travel insurance that will reimburse you for unexpected costs due to weather-related delays, lost luggage, etc.

2. Subscriptions - The major benefit of putting a subscription on a card instead of your checking account is that you'll have an additional barrier protecting your cash. There are hundreds of horror stories online of gyms, streaming services, and online memberships continuing to bill a checking account after the contract ends or accidentally double-charging a subscription, which could overdraft your account and cause you to get overdraft fees.

3. Large purchases - If you like to utilize reward points, large purchases are an excellent way to boost your point balance quickly. Also, many cards offer extended warranties for appliances, electronics, and other "big" purchases. Again, make sure you have the money to pay it off quickly and that your credit limit is high enough to cover the cost.

Purchases you should pay with cash

1. Any bill with a credit card processing fee - While it's typically more convenient to pay with a card for things like your taxes, utility bills, or rent, many of these incur additional credit card processing fees that aren't worth the cost. 

2. Cash advances - This goes back to the problem of seeing available credit as "extra" money. The interest rates typically get tacked onto cash advances immediately and can be higher than your purchase APR. 

3. Buying a car - Some people with high credit limits will consider putting a car purchase on their card to reap the rewards, but the interest rates on credit cards are typically much higher than a car loan and will end up costing you more than if you just used a personal loan from the dealer or your financial institution.

The bottom line

Use your credit card wisely to protect your financial security, and ensure you understand the benefits and drawbacks of each payment method before purchasing.

About Credello

Credello is a financial tech company offering personal finance tools that simplify financial decisions through personalized, on-demand recommendations — so users can borrow, save, or invest with confidence.

Credello believes that finding the right financial product should be as easy and interactive as online shopping, and we are on a mission to make that possible. For more information, please visit

Contact Information:
Keyonda Goosby
Public Relations Specialist
[email protected]
(201) 633-2125

Original Source: Credello: Tips for When to Buy With a Credit Card

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