The Best and Worst Things to Buy With a Credit Card

A happy woman shopping online with her credit card

By Bob Atoo
February 10, 2021

When it comes to figuring out the smartest way to use a credit card, there are a few things that you should be aware of in order to help improve your credit rating, while ensuring that you don’t make credit purchases for unnecessary things that could negatively impact your credit score.

We’ve put together this helpful guide of the best things to buy with a credit card to build credit, as well as what you shouldn't buy with a credit card.

Check Your Score

Should you use your credit card for everything?

It goes without saying that you shouldn't use your credit card for every purchase you make; while some purchases with a credit card can actually help to improve your credit score, some things can have a dramatic negative effect on your rating, which you want to avoid at all times as it can take a while to build it back up again.

Using your credit card to pay for things like travel cards and holidays is often advisable, but you should avoid using a credit card to pay for things like medical bills and cars.

Below, we discuss some of the best and worst purchases that you could make with a credit card.

What purchases to make with a credit card

Online shopping

Using your credit card for some online shopping purchases can have its advantages.

Firstly, many credit card companies offer an added layer of protection when you purchase something online with your credit card. For example, if your item doesn’t arrive or if it arrives broken or faulty, you can usually claim the money back from your credit card company. Of course, this depends on each credit card provider, so be sure to check your card’s terms and conditions.

Some credit cards also offer a return protection policy which enables you to make a claim through your credit card company if the company you purchased a good from won’t let you return the item.

Read more: Credit Card Protection Explained

One-off high-value purchases

Purchasing one-off, high-value items such as a new TV with your credit card can also have its benefits, depending on what your credit card offers.

Some credit cards offer something called purchase protection which acts as a form of insurance against the good you’ve purchased in the event that it becomes broken or faulty, usually within the initial 90 to 120 days of purchase.

Of course, not every credit card will offer this level of protection, but it’s a good idea to check if your card offers this before you make a high-value purchase.

Travel cards

Travel cards are another thing that are usually considered to be good purchases on a credit card.

You can sometimes take advantage of interest-free introductory offers and by using a credit card to pay for your Oyster card bill each month, for example, it means that you don’t have to worry about the expense of topping the card up each time you use it.

This way, you can simply pay it off your credit card bill at the end of each month, providing that you can afford to do so.

You might like: The Advantages of Using a Credit Card

Holidays

Using a credit card to pay for things as part of your holiday is another useful way to use a credit card.

For example, purchasing flights, hotel and car rental with a credit card adds an extra level of protection to your purchase, so if your flight is cancelled or your baggage is lost or stolen, you can often make a claim through your credit card.

Again, it is entirely dependent on the type of cover and protection that is provided with your credit card, but it’s worth looking into before making a purchase.

Check Your Score

Groceries

Many supermarkets offer their own type of store credit card that you use exclusively at their supermarket, which means you can often benefit from discounts and rewards.

However, it’s imperative that you remember to pay off your credit card bills, even if they are supermarket-specific ones so that you don’t get into too much debt.

Read more: A Guide to Supermarket Loyalty Schemes

What not to buy with a credit card 

Mortgages

A mortgage is already a type of loan, so by using a credit card to pay for it, you will essentially be transferring one loan to another, which is only going to add more fees and interest to your payments in the long-run.

Student loans

Student loans are another thing that you should avoid paying for with a credit card as the amount of added interest you’ll have to pay back will likely be extortionate.

Many student loan providers won’t even give you the option to pay off your loans with a credit card anyway, so it’s not something you should even really give a second thought.

Cars

Many car dealerships won’t accept credit card payments anyway as it means they have to pay fees, so you probably shouldn’t even consider it as a payment option when purchasing a car.

However, if it was something you were thinking about, then you should be aware that as cars are usually high-value items, they will take a long time to pay back and putting the payment on your credit card will mean that the interest you pay on the purchase can get quite substantial, the longer you take to pay it back.

Learn more: What Checks Need to be Done for Car Finance?

Medical bills

Paying off your medical bills is also something that you shouldn’t really use your credit card for.

This is because if you can’t afford to pay off your credit card almost straight away, you will just be racking up more debt in the form of interest which will make it much more costly in the long-run.

Purchases for your wedding

This particular purchase is really up to your own personal prerogative, but paying for things for your wedding on a credit card is often advised against as it usually means that you’ll be going into your marriage with a fair bit of credit card debt as you’ll need to pay it off.

It’s better, therefore, if you try to save for your wedding in a separate fund rather than using a credit card where possible.

If you're unsure what your credit score is, it's worth finding out so that you know where you stand financially and whether or not it needs improving. Tap the button below to check it now for free (30-day free trial with Checkmyfile):

Check Your Score

For further information regarding credit cards and credit ratings, check out our handy guides below.

Related guides