Which Credit Card Should You Use for a Large Purchase?

If you’re planning to make a large purchase soon, maybe for a family vacation or major home improvement expenses, choosing the right credit card can make all the difference. Knowing what to look for can help you get the best deal and may even earn some credit card rewards.

Look for a credit card with a promotional interest rate.

Promotional interest rates aren’t just for balance transfers any more. Now, many credit cards extend the promotional rate to new purchases too. When it comes to large purchases, a long introductory promotional rate will give you time to pay off your balance without incurring any extra interest. Taking advantage of the interest rate could help you save hundreds of dollars in interest costs.

Be sure you make your monthly payments on time since late payments could cost you the promotional rate.

Look for one that pays rewards.

With a rewards credit card that offers a zero percent promotional rate, you both the ability to earn an incentive on your purchase, plus you get the convenience of paying off your balance time with no interest.

Look for a credit card that pays higher rewards on the type of purchase you’re planning. If you’re booking a vacation, for example, look for a travel rewards credit card. Some purchases don’t fit neatly into a category. A flat-rate cash rewards credit card is better for those types of purchases.

Try to earn a signup bonus.

It’s fairly normal for rewards credit cards to pay an initial signup bonus. To earn the bonus, you need to make a minimum amount of purchases within the first three months of opening your credit card.

If you’re applying for a new credit card, look for a rewards card with a minimum spend threshold around the amount of your initial purchase. Credit cards with higher signup bonuses tend to have higher minimum spending limits. If you’re already planning a large purchase, it may be easier to meet the limit than you normally could.

Keep in mind that your ability to meet the spending limit depends on your credit limit. For new credit cards, you’ll find your exact credit limit after you’re approved.