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The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
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7 things to consider when choosing a credit card for large purchases
Nick Ewen is TPG's editor-in-chief and helps readers leverage credit cards (he has more than 25 of them) and loyalty programs to travel more for less. He's been at TPG for over 11 years.
When Ryan worked as a TPG credit cards writer, he oversaw refreshes of card reviews and card offer stories. He enjoyed racking up cash back and helping readers maximize their points and miles for their next big trip.
also contributed to this story
August 16, 2024 • 9 min read
The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.Editorial disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
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Quick summary
Choosing the right card for large purchases can maximize rewards and provide valuable protections.
Charge cards, which lack preset spending limits, may have less impact on your credit utilization rate compared to traditional credit cards.
Bonus categories, spending threshold bonuses and targeted offers can increase the value received from significant transactions.
Purchase protection and extended warranty benefits are important considerations, especially for electronics or high-value items.
What to consider
Eligibility for bonus categories and targeted offers varies by merchant and card type.
Purchase protection and extended warranty coverage levels differ, with exclusions for certain items and events such as natural disasters.
Introductory 0% APR offers can provide flexibility for large purchases, but balances should be paid in full before the promotional period ends to avoid interest.
What you'll miss from the article
A detailed comparison of card features and protections to help you select the best option for your specific large purchase scenario.
Generated by AI with support from our editorial team.
Update: Some offers mentioned below are no longer available. View the current offers here.
One of the first lessons I learned when I got into the points and miles hobby is to put everything possible on a travel rewards credit card. However, it’s also important to choose the best card to make sure that you get the biggest bang for your buck. This is especially true when it comes to making a large purchase. So, today I want to discuss nine things to consider next time you plan on swiping your credit card for a significant amount of money.
For starters, let’s agree that the definition of a “large” purchase can vary significantly from person to person. You may not be able to charge a new car purchase to a credit card, but spending $1,000 or more on a medical bill, new laptop computer or an essential household item may be much more common. So, what card should you use?
Here's what to know.
Use a charge card
One possible option is to use a charge card instead of a credit card for large purchases. The biggest benefit to using a charge card is that charge cards have no preset spending limit. Instead, each purchase is approved on a case-by-case basis based on your history. The downside to using a charge card is that you must pay off your balance in full each month. (Then again, you should always be doing this, as I wrote about in my 10 commandments for travel-rewards credit cards post.)
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As a reminder, one of the largest parts of your credit score is your utilization rate; in other words, how much of your available credit you’re using. Since charge cards don’t have preset limits, they aren’t included in this calculation. As a result, charging a $5,000 purchase to a charge card won’t have nearly the same impact on your credit score as charging that same purchase to a card with an $8,000 credit limit. However, your statement balance is still reported to the credit bureaus, so creditors looking at your credit report will still see the high balance.
Where you make your purchase matters, as cards have bonus categories that include particular types of merchants. There are plenty of cards that offer valuable earnings rates on different categories, meaning you can earn additional rewards when spending in those categories.
If you're making a large purchase at a home-improvement store, for instance, you'll want to put it on your Citi Custom Cash® Card, since you'll earn 5% cash back in your top spending category (up to $500 spent each billing cycle).
The information for the Citi Custom Cash® Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
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Some purchases, however, such as medical bills, likely won’t fit into any bonus categories. For these types of expenses, you may want to use a card that’s good for everyday spending, like the Citi Double Cash® Card (see rates and fees)
Check Amex Offers and Chase Offers
One often overlooked aspect of maximizing earning is Amex Offers and Chase Offers (which you check online). These offers provide statement credits or extra points when you add an offer to your card and then make a qualifying purchase. You can view the currently available offers when you log in to your online account page.
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You’ll usually find more Amex Offers per card than Chase Offers — but it’s worth checking the offers on all your Amex and Chase cards before making a large purchase. Offers are usually available from travel, shopping, dining and entertainment merchants.
Charging a large purchase to a credit card that offers a welcome bonus could get you most or all of the way to the spending requirement for that bonus. You can also earn additional perks by hitting spending thresholds, like the Companion Pass on Southwest-issued cards and free night certificates on hotel cards like the World of Hyatt Credit Card (see rates and fees).
Use a card with purchase protection
Something else to consider for large purchases is whether or not your credit card has purchase protection. Most travel rewards cards include some type of purchase protection coverage, which will typically cover you for damage, theft and sometimes loss of a covered item shortly after purchase (usually within 90 to 120 days).
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However, you’ll also want to know how high of a limit your card has, and whether loss is covered. American Express, for one, makes it easy to determine the level of protection available on your card though. Just go to the American Express website, click on the type of protection you’re interested in and then click on your card.
Note that most of these policies limit the coverage provided for natural disasters though, and you can’t invoke the benefit on purchases of permanent household fixtures (like carpet or tile).
Use a card with extended warranty protection
A similar benefit to purchase protection is extended warranty protection. When you purchase an item with a stated manufacturer’s warranty, some credit cards will match or extend that warranty. This can be especially useful on appliances or electronics, which always seem to go bad a month or two after the initial warranty period is up (or is that just my bad luck?).
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You’ll want to make sure to save the original receipt, as you’ll need it to submit a claim to invoke the extended warranty benefit.
But, if you’re making a large purchase, cards like The Platinum Card® from American Express* and the American Express® Gold Card* can offer peace of mind and may one day put some money back into your pocket.
*Eligibility and benefit levels vary by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.
Although TPG always recommends paying off your balance in full each month, there are some situations where you might need some extra time. In this case, you’ll want to consider a card that offers introductory 0% APR on purchases. You may be able to activate a 0% APR offer on an existing card in your wallet, or you may want to sign up for a new card that initially offers 0% APR on purchases.
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However, be sure to pay off your balance in full by the end of the 0% APR period so you don’t incur high interest and fees.
Some of our favorite 0% APR cards include the Capital One VentureOne Rewards Credit Card (0% intro APR on purchases and balance transfers for 15 months; 18.49% - 28.49% variable after that; balance transfer fee applies) and the Blue Cash Preferred® Card from American Express (see rates and fees; 0% intro APR on purchases and balance transfers for 12 months; 19.49% to 28.49% variable APR after that).
If you have a large purchase coming up, you should definitely think about which credit card makes the most sense. Some of the considerations above relate to earning and redemption potential, while others act as insurance policies if things go awry. As always, feel free to remove considerations that aren’t important to you or relevant to your purchase, and add additional weight to the ones that mean the most to you.
The right card for each purchase will depend on the item being purchased and your particular circumstances. For some purchases — especially electronics — the potential value obtained from extended warranty, purchase protection and price protection benefits may justify using a card that earns less points on the purchase. Or, it might make sense to use a particular card if you’re working toward a spending threshold or a minimum spending requirement on that card.
For rates and fees of the Blue Cash Preferred Amex card, click here.
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
