7 Expenses You Should Use a Credit Card For (And Why)

]]Nearly 191 million Americans have a credit card. Credit cards can be used for a wide variety of purchases ranging from groceries and gas to vacations and large purchases. While credit cards are convenient, they also come with the risk of debt and high-interest fees due to overspending. Some experts argue that using a credit card is a wise strategy when making certain purchases, while others say otherwise.

If you’re in the camp of people who do enjoy using credit cards wisely, you can optimize your benefits by making certain credit card purchases intentionally for rewards, purchase protection, or other perks. Here are 7 expenses you should use a credit card for regularly to reap more benefits and stretch your dollar.

1. Groceries

Groceries are a common expense to use a credit card for because many credit cards offer rewards for grocery store purchases. With the increased cost of groceries and food, you may find it helpful to each cash back or bonus points on your weekly food spend. The Discover It Cash Back Card often offers around 5% cash back on grocery store purchases during certain times of the year.

You can also pair these bonus earnings with other loyalty rewards programs and apps like Ibotta and Fetch Rewards. As with any credit card purchases, it’s important to make sure you set a budget for how much you’d like to spend and pay the bill off in full each month if possible. It’s easy to spend extra money on groceries each week with a credit card and tell yourself that you’ll just pay the bill when it comes out. That’s always easier said than done.

Remain mindful of your weekly grocery budget and any sales or discounts you can take advantage of even if you plan to use a credit card for this purchase.

2. Gas

Gas or fuel is another common expense you should use a credit card for if you want to earn rewards. The price of gas fluctuates, but you can always earn cash back with certain credit cards like with the Chase Freedom Flex Card which has no annual fee and pays 5% cash back on gas. When reviewing our spending for the year, my husband and I found that we spent around $300 per month or around $3,600 for the year on gas alone.

If we used a credit card that paid 5% cash back to pay for all our gas fill ups, we’d earn $15 back each month or $180 back for the year. This may not seem like much, but it adds up and can be paired with loyalty rewards through certain gas stations as well.

3. Cell Phone

Bills like your cell phone bill is another important expense to use a credit card for since some cards offer cell phone protection plans. This means you’ll get free cell phone insurance just for paying your monthly bill with your credit card. It’s important to read the fine print when reviewing your card benefits, but this insurance can cover the cost of replacing or repairing your phone if it’s lost, stolen, or damaged.

You typically need to pay a deductible when you file a claim but you won’t have to worry about paying for an extra warranty or insurance out of pocket when you use your credit card.

4. Vacations and Airfare

If you travel frequently for work or pleasure, you should always use a credit card to pay for your expenses. Not only can you earn valuable rewards points or miles, but credit cards also offer better purchase protection and fraud prevention than debit cards.

Many rewards or airline cards will get you cash back and points for booking your flight, hotel, and other travel-related purchases. You can use these rewards to score free or discounted travel in the future. If you’re traveling abroad, it’s also important to use a credit card that doesn’t charge any foreign transaction fees but will also protect your purchases.

Not to mention, some credit cards even provide complimentary travel services like TSA pre-check, access to certain airport lounges, as well as earlier boarding and a free checked back for flights.

RELATED: 12 Tips to Family Travel With Family on a Budget

5. Larger Purchases

You may want to use a credit card for larger purchases for a number of reasons. If you have good or excellent credit, you may qualify for a 0% APR promotional period for new purchases. These can last anywhere from 6 months to 18 months after you open a new credit card account. With 0% APR, you don’t have to worry about paying interest on your purchases and can take a few months to pay them off.

Making larger planned purchases with a credit card can also help you earn a sign on bonus. My husband and I used credit cards for most of our wedding expenses when we were engaged. We each got a Southwest Rapid Rewards Card and has to spend $2,000 during the first few months to receive a large sum of bonus points. These points allowed us to travel to Jamaica for our honeymoon for free.

When you’re trying to earn a credit card sign on bonus, it’s best to make sure you can still afford to pay off the card in a timely manner. Stick to larger purchases that you planned to make such as if you’ve been saving up for a new TV. If you have the cash in a savings account you can use the credit card to buy the TV and earn rewards on the purchase. Then, just pay the card off right away with the cash you saved so you don’t have to carry the debt.

6. Subscriptions

Let’s say you don’t want to use a credit card for much but still need to maintain a good credit card and have some payment history. Consider setting up automatic payments for a small subscription each month. If you pay $17 per month for Netflix, set up the payments on your credit card and pay the bill off in full each month to boost your credit score.

Avoid getting too many subscriptions so it doesn’t cause you to lose track of your spending and waste money.

RELATED: Trim Financial Manager: Save Money on Subscriptions with One Click

7. Dining and Entertainment

Eating out and attending concerts can get pricey. However, many credit card companies offer reward programs that give customers cashback or points when they dine and entertain, and in some cases offer exclusive perks to members.

Again, be sure to set a budget based on what you can truly afford to spend for dining and entertainment to avoid getting carried away and racking up debt. If you and your spouse usually have a date night twice a month, plan to use a rewards credit card for these outings and  then pay the bill off right away to maximize your benefits.

RELATED: How to Budget For Dining Out

Summary: Use a Credit Card Wisely to Give Yourself a Financial Boost

There are various benefits to using a card to make purchases. Whether it’s big-ticket items, travel expenses, or grocery store purchases, earning rewards through everyday planned spending is worth considering. However, using credit cards comes with caveats.

Be sure to read your card’s terms and conditions, stay within your budget, and pay your balance in full each month. By doing so, you can reap the benefits and avoid the pitfalls of using credit cards.