5 expenses you should always pay for with a credit card

By UK CreditCards.com

Some experts discourage shoppers from using credit for smaller purchases, such as groceries or coffee. However, most experts agree that there are some expenses that you should always put on a card.

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For example, if you're getting ready to make a large purchase, such as a refrigerator, you should always use plastic to pay for it. That's because if you spend anywhere in the region of £100 to £30,000 using a credit card, you are automatically entitled to additional legal protection against faulty goods or misrepresented services under Section 75 of the Consumer Credit Act 1974. Should anything go wrong with your purchase, the vendor and the card provider are liable, not you.

However, big-ticket purchases aren't the only expenses you should always put on a card. Here are five more expenses that you are better off paying for with plastic: 

1. Travel
Most people use a credit card to pay for their annual holiday and travel expenses because they can't afford to pay in one lump sum or because they want the protection offered under Section 75 of the Consumer Credit Act 1974.

However, experts point to one more reason why you should pay for holiday expenses with a card: You may be eligible for extra traveller's perks through your credit card. For example, many credit cards offer free travel accident insurance, lost luggage insurance and even flight delay insurance. Check with your credit card provider to see what kind of traveller's perks your card provides. You could be surprised. 

2. Home appliances
Unlike a debit card or cash, many credit card providers offer extended warranty cover on goods and appliances, such as televisions, washing machines and, in some cases, personal entertainment systems such as iPods. The cover extends for a fixed period after the manufacturer's warranty expires and only covers items that you paid for in full with your card. Many cards also require that you register the item beforehand, so make sure you register costly items after you purchase them.   

3. Internet purchases
Although debit cards can be used to make online purchases, they are not as widely accepted as credit cards. Consumers also have better fraud protection when shopping online with a credit card. In addition, some online retailers feature bonus offers, such as free postage and packaging, when you pay with a credit card.

4. Deposits
If you ever hire something, such as a car or equipment, it is very likely that you will be required to pay a refundable deposit. Using a credit card for this is often a good idea because it means that you are still able to access 100% of your funds, and the supplier will return the deposit within the 59 day interest free period, allowing you to pay off the balance of your credit card in full without incurring any charges.

5. Student expenses
Using a credit card to pay for school or university items, such as textbooks, can be a wise decision if you have the discipline to use your card responsibly. By using your credit card early and often on items such as school supplies, you can build up a positive credit history that will serve you well in the future when you apply for additional credit.That said, it's easy to get trapped by too much credit card debt, so make sure you only charge what you can repay in full at the end of each month. 

See related: 5 secrets of credit score overachievers; 5 common love and money mistakes

Published: 3 August 2011