August 20, 2025 · 12 mins read
Santosh Kumar
You could consider using a credit card for large purchases if you can pay off the balance before it starts accruing interest. A 0 percent introductory APR card buys you more time to pay off the purchase. Using a credit card to pay for large but predictable expenses — like groceries, travel, and appliances can help you earn rewards and access additional benefits. It’s also possible to pay for big expenses with alternative options like a savings fund, personal loan, or BNPL (buy now, pay later) plan.
Say you’re remodelling your home, footing the bill for a big trip, or facing an emergency expense. The money has to come from somewhere, and you might be wondering whether you should swipe a credit card to pay for it.
You can consider using a credit card for large purchases, but there’s a chance of racking up interest fees and impacting your credit score. Half of Indians carry credit card debt from month to month, according to Bankrate’s Credit Card Debt Survey, but that doesn’t mean it’s a good idea to pay interest on a large purchase. That’s where a card with 0 percent intro APR could come in handy. Whether you go for an intro APR option or a high-earning rewards card for a big expense will depend on how you use the card and when you can pay off the balance.
Learn more about when to use — or not to use — a credit card for large purchases.
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If you’re thinking of putting a high-dollar charge on your card, it helps to weigh the pros and cons. Here are a few reasons why using a credit card for a large purchase may work in your favor.
Some rewards credit cards offer sign-up bonuses, often in the form of cash back, points, or miles, to new cardholders. To earn the bonus, you typically have to spend a certain amount within the first few months. If you already need to make a big purchase and have your eye on a new credit card, it might be a good opportunity to meet your minimum spending requirement and earn any welcome bonuses it offers.
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A new credit card with a 0 percent introductory APR offer might be a good choice for a large purchase. You'll still need to make minimum payments each month. If you don't, your issuer may revoke the introductory rate, and you'll be charged the regular interest rate. But this strategy may give you more than a year to chip away at a big credit card balance.
If you have a rewards card, you might be able to tap into a flat-rate, tiered, or rotating spending category to earn cash on a big expense. Or, you could earn points or miles to put toward your next vacation. Earning rewards on a large purchase you need to make anyway can help maximize your credit card rewards strategy. Just remember, earning rewards isn’t a reason to go into debt. Racking up rewards on a large credit card purchase should only be a consideration if you know you can pay off the purchase without incurring interest charges.
Credit cards may offer additional rewards that can help protect or increase the benefits of your purchase.
For example, extended warranty protection will help if you’re buying a new smartphone. Travel insurance and free checked bags might be useful on that big trip. And purchase protection can make sure you’re covered if your new smartphone is stolen.
Credit cards are increasingly offering a buy now, pay later option for large purchases. Instead of paying off the whole purchase in one billing cycle, you may be able to make several monthly payments.
In most cases, the issuer charges interest fees for a buy now, pay later option, but it’s often a fixed and lower rate than regular credit card interest. And while it can be helpful to spread out a hefty payment over time, it’s still a form of debt. Make sure you can afford the monthly payments.
If you’re facing an emergency issue and need to cover immediate expenses, using a credit card may be your best — or only — option. You could consider applying for a new 0 percent intro APR credit card with a long introductory period. You’ll want to make at least the minimum payment each month. But make sure you know when the period ends so you won’t be surprised by the regular APR. You’d pay your balance to avoid interest charges. It might help to reach out to a credit counselor for more advice on reducing debt when you pay for emergencies.
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It's important to note that using credit cards for every purchase does require a certain amount of discipline.
When you pay with cash, you can't spend any more than you have in your wallet. With debit, your spending is more or less limited by how much money is in your account. With a credit card, you can spend all the way up to your credit limit, regardless of whether you actually have the money to cover those charges.
That spending power can be too tempting for some people, and the fallback ability to roll debt over from one month to the next can amplify the temptation. Other people have no intention of going beyond their means, but just find it hard to monitor their spending if the money's not coming straight out of their bank account.
For these folks, it might make perfect sense to just keep the credit card in a drawer until they need it for a big purchase.
You might be able to get some rewards by making a big purchase on your credit card, but it could also impact your credit score. Credit utilization refers to the percentage of available credit that you're currently using, and it's an important factor in a category that makes your fico score go substantially upto 30%.
When you put a large purchase on your credit card, you could be using up a significant amount of your credit. If your balance exceeds 30% of your credit limit, you have a high credit utilization ratio that may hurt your credit score.
There are ways to avoid this. "When you make a charge on a credit card, the balance that shows in your credit report is typically the balance on your billing statement," says Rod Griffin, senior director of public education and advocacy at Experian. "If you then turn around, say the next day, and pay the balance in full, it may not be reported to the credit bureaus. The billing cycles typically last 30 to 45 days, and so if that billing cycle hasn't ended and you paid the balance in full, it wouldn't be reported to the credit bureaus."
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If you charge a big purchase and can't pay off the credit card in full, you'll probably rack up interest charges. Credit card annual percentage rates can be steep and can significantly increase your borrowing costs.
Consider the urgency of the purchase. "Is the purchase an emergency, such as replacing the tires on your car before winter, a leaking roof or an unreliable furnace? Or could I save for a while and make the purchase in cash without paying a significant amount in interest?" says Martin Lynch, president of the Financial Counseling Association of America.
Carrying a large balance on your credit card may result in hefty interest charges that can make paying off the credit card debt more challenging.
Using a credit card to pay for a big purchase instead of raiding your checking or savings account can help your short-term cash flow. But it could potentially hurt your liquidity in the long term. When you’re taking on debt today, you're agreeing to monthly payments in the future.
"I would look at what is the balance going to do to, first and foremost, to my ability to repay the debt. What does it do to my cash flow circumstance?" says Griffin.
You can choose a specific credit card that might work well for the purchase – for example, a rewards credit card that offers higher earning potential in a certain category. You could maximize your rewards if your big purchase falls into that category.
If you have solid credit, you can also open a 0% APR credit card to make a big purchase. These cards have an introductory period that can help you pay off the item in manageable chunks, interest-free.
"You need to make sure that if you do get a card with an introductory rate, you meet the terms of that introductory offer," says Griffin. "But again, that comes with the caution that, if you don't pay it off within that introductory period, you could be faced with substantial interest rates, potentially balloon payments, those sorts of things."
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Can You Overpay Your Credit Card Before a Major Purchase? If you've reviewed the pros and cons of using a credit card for a big purchase and want to move forward, the first thing to do is to check your credit limit. Make sure you have enough to make the big purchase. Some people want to take a different strategy and wonder if they can overpay on their credit card before a big purchase.
"With many lenders, you actually can overpay your account in advance of a large purchase, which would temporarily give you the additional credit you might need to make the transaction," says Lynch. "That wouldn't increase your score, unfortunately, and it wouldn't permanently increase your credit limit. It would also have to be permitted by your card provider's policies." To head off an embarrassing credit denial, notify the card issuer before charging a big purchase. Many credit card companies have advanced technology to help prevent fraud. If expenses are not the normal payment for you, letting your credit card company know before the time can ensure there are no blocks on the purchase. Lastly, consider other alternatives, such as a personal loan or home equity line of credit, that may be more cost-effective. If you can hold off and save up for the big buy, that might be your best bet.
Follow the tips below to use this financial tool responsibly:
1: Do not purchase things that you can not afford. Though a credit card provides you the flexibility to purchase anything you want, it is not sustainable. Make sure you only charge what you can easily afford to pay off at the month's end.
2: Try to keep your credit utilization ratio at 30 percent and never max out your credit card.
3: Always make your repayments on time. Because missed or late payments do not attract penalty or interest charges, but also take a toll on your credit score, whereas a history of on-time credit card repayment helps in building a positive credit score. If you are likely to forget to make on-time repayments, then you can set up reminders or enable an automatic payment facility for at least the payment of the minimum due amount.
In general, we would recommend using your credit card for everyday purchases because this financial tool is safer to carry than cash and provides stronger protection against fraudulent transactions than a debit card. In addition to this, it helps in building your credit score, allows you to track your spending, and helps you earn higher rewards without even changing your spending habits.
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You should regularly check your credit limit and see if you have used more than 40% of your available credit limit.
Credit cards offer additional protection in the form of insurance for card purchases that might be lost, damaged, or stolen.
Paying through EMI is cheaper than taking out a personal loan to pay for a purchase, such as a television or an expensive refrigerator.
A lot of credit card holders believe that the minimum amount is the total due they are obliged to pay, when in fact it is the least amount that the company expects you to pay to continue receiving credit facilities.
Credit cards come with an interest-free period, which is a period of time during which your outstanding credit is not charged interest. Ranging between 45-60 days, you can avail free, short-term credit if you pay off the entire balance due by your credit card bill payment date.
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