When it comes to making payments with a credit card, many tend to just pull out their card and use it as a default form of payment. While that type of thinking is very convenient, it is not always the best choice when it comes to your financial security.
Knowing which expenses are best suited for a credit card and which ones are best paid with another type of payment is essential in saving you money in the long run and making sure you get the most out of your credit card usage.
The best expenses to pay with a credit card included purchases like groceries, fuel, airfare, and other large items that offer reward points or other benefits. These items often require an upfront cost but also give you rewards back over time that can outweigh the costs associated with them.
Many times, you will get cashback, miles, or other points which you can use on future purchases. Additionally, making these types of purchases with a credit card ensures that if something goes wrong after purchase, you’ll have an easier time filing for a chargeback with your credit card issuer.
On the other hand, there are certain expenses that should never be paid with a credit card because it could put you in an unfavorable financial position down the road. This includes things like loans, medical bills, or any other form of debt so that you do not accrue interest charges from using your credit line and potentially fall behind on payments later on.
Rent or mortgage payments also should be paid by means other than your credit card, because the fees associated with these transactions can add up over time and reduce your ability to make future payments without incurring additional costs.
By taking some extra time to think about which type of expense is best suited for which payment method, you can save yourself money while still being able to take full advantage of any rewards points available through your current account(s). Doing so will help ensure that every penny spent gets used wisely and efficiently, rather than letting unnecessary fees sneak up on you down the road due to a lack of planning ahead of time.
