Although it’s nearly second nature for most consumers to pull out a credit card for their purchases, it may not always be the best idea for everyone. This can be especially true around the spend-happy holidays when we’re less inclined to stay on budget in the face of seemingly unbeatable sales of Black Friday and Cyber Monday.
At the same time, you don’t necessarily need to leave your credit card behind when hitting the post-Thanksgiving sales. In fact, there are four specific times you should consider pulling out the plastic and charging your deals (provided they’re in the budget, of course).
1. When You Can Score Really Valuable Rewards
One of the biggest reasons people like to charge their purchases is to earn valuable credit card rewards. With some smart selections, your cards can earn you 5% or more back on your purchases, making room in the budget for a few extra stocking stuffers.
Credit card signup bonuses can also be a big incentive to charge your big Black Friday deals. Signup bonuses typically have minimum spending requirements in the thousands of dollars that can be hard to reach with normal spending; however, your (budgeted-for) holiday purchases can make the requirement much easier to reach.
2. When You’re Buying Online or from a Questionable Source
Another good time to consider using your credit card is when you’re making a purchase online or with a merchant you don’t entirely trust. Credit cards have very strict laws that cap your liability for unauthorized purchases to just $50; in contrast, the limitations on your debit card will vary based on when you report the fraud.
What’s more, most major credit card issuers waive even that, offering $0 fraud liability. Many issuers also offer return protection, which can reimburse you for a product or service if the merchant refuses to do so.
3. When You’re Buying Electronics or Appliances
Credit cards are also good to consider when making large purchases of electronics, appliances, or anything else that typically carries a manufacturer’s warranty (excluding transportation). That’s because most credit cards offer some type of extended warranty coverage that will add a year — or two, or three, depending on the card — onto the manufacturer’s warranty.
Note that extended warranty coverage comes with some limitations and restrictions, so read your benefits documentation carefully. While not all items will be covered, most items for which you would consider purchasing the store’s extended warranty should typically fall under your credit card’s coverage.
4. When You Can Qualify for 0% APR
The last big reason to consider using your credit card for Black Friday and Cyber Monday purchases is if you need — and can qualify for — a good 0% APR deal. Many prime credit cards now come with introductory offers for 0% APR that last a year or more, which can give you the wiggle room to pay off your deals over time without being charged interest fees.
Of course, introductory deals always come with expiration dates, so be sure you know by when you need to repay your purchases to avoid being charged interest. Additionally, watch out for store cards or financing offers that come with deferred interest; these will charge you back interest if you don’t pay off your full purchase before the promotion expires.
About the author: Ashley Dull is the Finance Editor at Digital Brands, Inc., where she oversees content published on CardRates.com and BadCredit.org. Ashley works closely with experts and industry leaders in every sector of finance to develop authoritative guides, news and advice articles with regards to audience interest.