6 types of purchases you should always charge on your credit cardThere are times you shouldn't charge, but sometimes card's features are handyBy Erin Peterson
Two of the most common features that consumers
consider when they use a credit card are the interest rates and
rewards.
For Greg McFarlane, author of "Control Your Cash: Making Money Make
Sense," the most important feature of all is one that few people even recognize:
"The main thing I care about as a consumer is the protection a credit card gives
me," he says.
From travel insurance to fraud protection, these
little-known credit card services can be worth thousands of dollars over the
life of a card for those who spend the time to take advantage of them. "People
don't usually take the time to read the information that's sent to them, and
it's not what they're thinking about when they get a card," says Carrie Coghill,
director of consumer education for FreeScore.com. "But the reality is that there
are some good reasons to use a credit card, as long as you follow a few
rules."
 Just as there are some items you should never charge on a credit card, there are some you should -- that is, when you have the cash to pay a balance on time
and in full.
Because of key perks and protections embedded in many cards, you'll get what you
pay for -- and then some.
1. Big-ticket items
From computers to home appliances, major purchases are almost always
worth putting on a credit card, says Coghill. "Not only can you typically get
extended warranties over and above the original warranty offered, but some cards
will give you price protection," she says. "If you find a lower price within 60
days, you can be reimbursed the difference." That can be a lifesaver if your
fridge goes on the fritz and you need a new one immediately. You may not get the
best price when you buy it, but putting it on a credit card means you can price
shop at your leisure and still get the benefit.
2. Service provider purchases
If you got new tile in your bathroom or new
landscaping in your backyard, everything might have looked fine when it was
installed and you paid for the service. But a week later, perhaps the grout is
cracking or the shrubs have died. "If you paid with cash or a debit card, that
money's already out the door," says McFarlane. "But if you pay with a credit
card, the burden of proof is on the merchant to show that the work was done to
your satisfaction." Because merchants who accept credit cards agree to the terms
set by the card companies, the card company can exert serious leverage and charge back disputed purchases when one
of its customers has been wronged.
3. Fragile or breakable items
That delicate vase was going to look gorgeous in your
dining room -- before you tripped on a stair and smashed it to pieces. Your new
laptop was going to change your life -- and then you dumped an entire cup of coffee
on it. If you made the purchase on a credit card, you might not be out of luck,
says Kim McGrigg, spokeswoman for Money Management International, a national credit counseling agency. She also also writes the weekly Credit Cares Q&A column for CreditCards.com. "When a
problem like this arises, people might think about contacting the store or the
manufacturer," she says. "But in addition to these things, you should think
about calling your credit card company." While you might only be able to recover
a few hundred dollars in damages, it's certainly better than having to eat the
entire cost yourself.
4. Travel expenses
Credit cards shouldn't be used to buy a trip you can't afford, but if
the money's in the bank, you can put almost every travel expense on your card
and see extra perks. Many cards offer an array of travel services, from
automatic travel accident insurance, car rental insurance and lost luggage
insurance. "There are cards that will even reimburse you for essentials if your
luggage is delayed or if things are stolen from your hotel room," Coghill
says.
5. Automatically recurring purchases
From gym memberships to cable packages to credit
monitoring services, it's easy to sign up for monthly expenses and then find
that you're not taking advantage of them. Sometimes it's easy to get taken off
of subscriber rolls, but other times you'll need to get tough. "Some companies
don't have the best reputation for customer service; they'll start automatic
recurring payments but won't stop. Paying by credit card offers a layer of
protection between you and the biller," says Liz Weston, author of "The 10 Commandments of Money." If a call to the primary company won't stop the
payments, a call to your credit card company will.
6. PayPal purchases
When you sign up for PayPal, the site will encourage you to pay sellers directly from your bank account, but that's not the wisest
decision, says Weston. "The protections you get from those transactions are
dictated by the method of payment you use," she says. "Transactions made using
your bank accounts are governed by different federal regulations, which are
inferior" to those of credit cards. Unplug your bank account from PayPal and
make the credit card company as your middleman, and you'll have an easier time
keeping your money in the bank if you're defrauded or need to dispute a
purchase.
See related: 6 items you should never charge on a credit card, The 10 Commandments of Money, How to dispute a credit card bill with a merchant Know your credit card's travel perks, 4 keys to credit, debit card zero-liability policies
Published: May 10, 2011
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