4 Things to Charge on Your Credit CardPosted February 17, 2016 - updated April 27, 2016 in Credit Card Tips
As our motto goes, credit cards are a powerful financial tool when used properly. Credit cards are great for earning reward points and managing your short-term cash flow. To make the most of your credit card, avoid carrying a balance at all costs. Here are some situations when using your credit card makes the most sense.
1. Buying Groceries
Besides mortgage or rent, the second highest expense for a lot of Canadians is groceries. The good news is some credit cards offer higher reward accrual rates when heading to the supermarket. For example, you may earn two percent cashback when buying groceries. However, just because you’re buying groceries, doesn’t mean you’ll qualify for the higher accrual. You usually have to buy groceries at supermarkets to qualify. If you buy your groceries from a big box retailer like Costco or Walmart, you won’t qualify for the higher rewards. Be sure to check with your credit card company before shopping.
2. Buying Gas
When you’re filling up at the pumps, be sure to use your credit card. Many credit cards offer you a higher reward accrual when buying gas. For example, if you have a cashback or reward points credit card, you may earn two percent cashback on gas. A lot of people are hesitant to use their credit card at gas stations and with good reason. Gas stations are prone to credit card fraud. Fraudsters have been known to use skimming devices to steal your credit card information. To avoid being taken to the cleaners, consider getting a low limit credit card just for the pumps.
3. Online Shopping
While the Internet can be a great place to score a deal, it can also be a place to fall victim to fraudsters. If you’re looking to protect yourself from fraudsters, credit cards are by far your safest choice. Your credit card company is always looking out for you in case of fraudulent charges. If you find a fraudulent charge on your credit card statement, your credit card company can usually reverse it. In most cases you are not on the hook for fraudulent charges.
4. Big Purchases
If you’re planning to shell out some serious cheddar on a big purchase, you can’t go wrong with a credit card. Not only are credit cards good for managing short-term cash flow, most credit cards offer extended warranty protection, going beyond the manufacturer’s warranty. Although this is a great feature to have, be sure to read the fine print in your cardholder’s agreement so you know your protection like the back of your hand. A word of caution – make sure you can afford to pay off those large purchases before your credit card statement comes due. The last thing you want is to carry a balance at 19 percent interest or higher.
The Bottom Line
As you can see, credit cards come in handy for a lot of different purchases. Hopefully you’ve learned a thing or two about paying with plastic. Next week we’ll look at when it may not make sense to use your credit card.