Credit cards may become a boon or bane, depending upon how they are used and what is purchased with them. In case you are utilizing your cards for shuffling of debts or the charge exceeds the amount you are able to pay per month, then it is high time to stop using credit cards. However, there are certain things which can be bought with credit cards by taking advantage of exclusive discounts or deals, or earning rewards or obtaining additional protection for the purchases.
1. Electronics and Appliances
Paying off with a credit card would be great in case you want replacement of old appliances or wish to purchase a big-screen television. A number of credit card issuers currently provide complimentary extended warranty schemes against the items you are purchasing with the card. The terms of these schemes vary according to what is covered and the longevity of the warranty, but usually they can be utilized for replacement or repairing of an item in case of damage.
Certain credit card agencies also render purchase protection, wherein loss and theft are covered, along with price equivalent for the items purchased. In case you intend to go for a big purchase, utilizing the credit card could in fact help you save money.
2. Arrangements for Travel
Using credit card for traveling purpose can be a good option since a number of card issuers provide stuff such as rental car insurance, medical assistance, emergency services, trip cancellation service and travel insurance without any extra charge.
Some credit cards pave the way for earning rewards when you cover travel expenses using the card. Depending on the type of card, you could earn hotel stays, free flights, free upgrades, vacation packages, discounts on car rentals, cash back, and so on. Moreover, free concierge service and other such added perks are offered by some cards. In case you are a regular traveler, a credit card is good enough.
3. Tax-Deductible Expenses
If you can prove certain deductions, you can claim those expenses in the form of a tax deduction. Utilizing a credit card for paying for the deductible expenses constitutes a great methodology for record keeping.
On the basis of your situation, the types of items you will want to utilize your card for might incorporate qualified education expenses, childcare expenses, healthcare expenses, charitable donations and business expenses. However, ensure that you stick to the statements every month so that the records for claiming tax deduction will be there.
4. Online Procurement
When you are shopping online, there are risks based on who can see your personal information. There is some kind of protection against identity theft or fraud when you are purchasing with credit cards. On the basis of the card being used, the coverage might be more enhanced compared to what is offered by banks in case of debit cards.
5. Recurring Bills
If your firm intention is to pay off the full payment of the credit card per month, you may use the card for reimbursing the recurring bills. This will go a long way in streamlining your finances. You will know that timely payment has been done for everything and you just need to pay a single credit card bill every month.
