9 things you didn’t know you could pay for with a credit card
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If you’re reading this, chances are you’re already doing all the right things when it comes to maximizing your living expenses. This likely includes using the right credit cards when dining out or shopping for groceries. Perhaps you’ve even set up autopay for utility bills and insurance premiums. But there are lots of big purchases that you may be overlooking completely.
Here are some common expenses you may not have realized you can pay for with a credit card:
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Housing is one of the biggest expenses for most of us and luckily, one you can earn points on. Through a service like Plastiq, you can pay your rent or mortgage with a credit card. The service does charge a fee of up to 2.85%, but you can earn Fee-Free Dollars by signing up with a referral link and referring others.
The stock market took a nosedive during the pandemic and lots of people continue to take advantage by buying travel stocks at low prices. What you may not be aware of is that you can actually buy stocks with a credit card. Through a company called Stockpile, you can use any major credit card to pay for your stocks rather than using cash.
Stockpile does charge a 3% convenience fee along with a $0.99 trade fee, which can really cut into your profits. Not to mention, trading stocks is risky and if you get into it just to earn miles, you can end up in a lot of financial trouble.
A few years ago I used a now-defunct site called Loyal3 to purchase blue-chip stocks in order to meet the spending requirement on a card. The company didn’t charge any credit card transaction fees and I actually ended up making a small profit when I sold all the stock I purchased with my card.
Buying stocks with a credit card may be worthwhile in order to meet a spending requirement – something that has become more challenging during the pandemic. The good news is that I tested credit cards from every major issuer and none of them incurred cash advance fees.
A car (or part of it)
If you’re in the market for a shiny new set of wheels, you probably know it’s not going to be cheap. But lucky for you, you may be able to pay for this purchase with a credit card. This is a definite case-by-case scenario but some dealerships will allow you to buy a car with a credit card, or at least cover the down payment. Some dealerships may charge you a transaction fee, so you’ll definitely want to sort this out before getting too far into the buying process.
Tesla actually allows customers to pay the Initial Order Fee with a credit card. When I bought my Model 3, this fee was $1,000 but now it’s down to $100. Kind of a bummer, but worth mentioning if you were hoping to earn some miles on the purchase of a new Tesla.
Paying taxes has got to be everyone’s least favorite expense. But they are inevitable and the fact that we can pay taxes with a credit card takes the sting out of this chore. Currently, the lowest fee for credit card payments is 1.87%. Depending on which credit card you use, it could actually be worthwhile.
For example, the Discover it Miles earns 1.5x miles, which is matched at the end of the first year. Since miles are worth one cent each, this is the equivalent of earning 3% cash back. So even if you’re paying a 1.87% fee on your tax payment, you’ll come away with a 1.13% profit.
If you’re saving up Membership Rewards points for a high-end redemption, then charging your tax payment to a card like The Blue Business® Plus Credit Card from American Express might also make sense. The card earns 2x points on the first $50,000 in purchases spent each year; then 1x. TPG values Membership Rewards points at 2 cents each, so you’d earn a 4% return on your tax payment, which far exceeds the 1.87% fee.
Medical bills are frequently cited as the biggest portion of consumer debt. With high credit card interest rates, charging these expenses to a credit card isn’t advisable. But if you can get reimbursed by your health insurance company or Health Savings Account (HSA), then you’ll definitely want to charge those bills to a credit card.
Whether it’s a trip to the dentist or a prescription copay, you should try to charge all of your medical expenses to a credit card when you can. Even if it’s just a small copay, it all adds up. Best of all, I have yet to encounter a health care provider who charges a fee for credit card transactions. Don’t assume this to be the case though – double-check before swiping your card.
Whether you’re a student or you have kids currently in college, chances are tuition payments are not something you look forward to every semester. That’s why it’s absolutely worth checking with your institution about whether they accept credit card payments. You could easily earn tens of thousands of miles every semester for an expense you were going to incur anyway.
Before you do, be sure to look into fees. While many universities do charge convenience fees when you pay tuition with a credit card, some of them do not. If yours falls into the latter category, consider yourself lucky and use a card that earns the most rewards on everyday spending.
Fund a bank account
If you’re looking to switch banks or take advantage of checking account sign-up bonuses, you can maximize this move by funding your bank account with a credit card. That’s right – when opening a bank account, you’ll be presented with a few funding options. Most people will use a debit card, but some banks do allow you to use a credit card.
I did this recently when funding a new checking account and was able to charge $500 to my Chase Freedom Unlimited. I earned $7.50 worth of cash back but since I also have a Chase Sapphire Preferred card, I can convert that to 750 Ultimate Rewards points. Not a huge haul, but Ultimate Rewards points are incredibly valuable and every bit counts.
Keep in mind that some banks will charge a cash advance fee if you use your credit card to fund a checking account. The way you can avoid this is by finding out what your cash advance limit is. Then try to use the card to fund your account with a higher amount. If the transaction is declined, you’ll know that it’s being coded as a cash advance.
Girl Scout Cookies
It’s pretty much the law that when a mafia of 10 year-olds descends on your office building to fuel your Tagalongs addiction, you buy 10 boxes minimum. If you’re like me and you have nieces who are part of said mafia, it’s expected that you double that purchase. I never carry cash or a check around, but luckily there is an alternative: Pay with a credit card online. Nowadays, every Girl Scout has a designated web form where you can pay for cookies while giving them credit for the sale.
In-person delivery is even free, so you’re not only earning miles when buying cookies, you’re not paying extra for the privilege to do so. With the pandemic still not slowing down, chances are the Girl Scouts will push the online platform during the next sales cycle, which is going to be great news all around.
Dog walking service
If you’re juggling working from home while caring for your very own Points Pup, you may find yourself using a dog walker more often than before. The great news is that if you utilize a service like Rover.com, you can pay your dog walker with a credit card. You may even be able to earn bonus points or cash back on this expense.
In the past, Amex Offers has run deals on Rover. Most recently, they offered $10 off $50 spent, which is pretty substantial. Rover even has a referral program, allowing you to earn a $20 credit when you refer a friend to the site.
All of the above-mentioned expenses are substantial and can really help you grow your rewards balance for a post-pandemic dream vacation. You’ll want to take into account the additional fees involved in paying some of these expenses with a credit card and ensure that the rewards you’re earning are worth it. As with any purchase, remember to pay your card off in full every month so you do not incur interest fees.
Featured photo by JGI/Jamie Grill/Getty Images
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