If you have a large purchase coming up and don’t have the cash, you have myriad options at your disposal. You could spend months saving small sums to reach your goal, or you could take out a personal loan. If neither of those options seem appealing, you could sign up for a new credit card instead.
While credit cards get a bad rap, they are almost always a better deal than personal loans. Not only can you apply for a credit card online (instead of visiting a bank), but some cards offer flexible terms, no added fees, and low interest rates, too.
Whether you plan to remodel your kitchen, need to buy new appliances, owe money for your child’s braces, or have a pricey home repair to deal with, some credit cards are ideal for handling large expenses. Here are some of the best options on the market:
Capital One VentureOne Rewards Credit Card
While the Capital One VentureOne Rewards Credit Card is technically a travel credit card, it offers real benefits for individuals with a big purchase coming up. For starters, consumers who qualify for this card will get 0 percent APR on purchases for the first 12 months; 15.49% - 25.49% (Variable) after that. That’s a full year to avoid interest payments on your large purchase, and potentially pay it off.
Not only that, but you can earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel. You also earn an unlimited 1.25X miles on every purchase, every day.
Since this card offers “travel credit” instead of points for a specific program, you can redeem your points for any type of travel without worry over blackout dates or award space. You’ll also enjoy no foreign transaction fees when you travel abroad, and no annual fee for having the card.
Capital One Quicksilver Cash Rewards Credit Card
If you need to finance a large purchase, it’s hard to beat the Capital One Quicksilver Cash Rewards Credit Card. This card offers 0% APR on purchases and balance transfer for 15 months, 15.49% - 25.49% (Variable) after that, which lets you avoid interest payments altogether during that time. This card offers a lower rate than most (starting at 15.49% APR for good credit).
Since the Capital One Quicksilver Cash Rewards Credit Card never charges an annual fee, your interest-free loan won’t cost a dime for 15 months. As a bonus, you get a one-time $200 cash bonus after you spend $500 on purchases within 3 months of account approval. You’ll also earn a steady 1.5 percent cash back for everything you buy.
GM BuyPower Business Card™ from Capital One
The GM BuyPower Business CardTM from Capital One® offers a similar no-interest introductory offer for people who need to make a large purchase and pay it down over time. After you sign up, you qualify for 12 months at 0 percent APR for purchases. This card doesn’t charge an annual fee, with a 18.49% Variable APR.
The rewards aspect of this card is a little different, although it could be ideal if you’re in the market for a new car. When you use your card, you earn 3% earnings on purchases at gas stations, restaurants, and office supply stores; 1% earnings on all other purchases; plus, 5% earnings on purchases of GM parts, accessories and service at authorized GM dealers - all of which can be exclusively redeemed toward the purchase or lease of an eligible, new Chevrolet, Buick, GMC or Cadillac vehicle.
Barclaycard CashForward™ World Mastercard® (Offer Expired)
If your goal is earning cash back and avoiding interest on a large purchase, the Barclaycard CashForward™ World Mastercard® (Offer Expired) might be the answer you’re looking for. Cash rewards do not expire as long as your account is open, active and in good standing.
You’ll never pay an annual fee, and you’ll enjoy 15 full months with zero interest.
Barclaycard Ring® Mastercard®
The Barclaycard Ring® Mastercard® is yet another card option perfect for large purchases of any kind. This card offers 0% intro APR for 15 months on balance transfers made within 45 days of account opening. After that, a variable 14.24% APR will apply. This card comes with a balance transfer fee. Promotional balance transfers that post to the acount within 45 days of account opening, either $5 or 2% of the amount of each transfer, whichever is greater applies. Balance transfers that post to the account after 45 days of account opening, the balance transfer fee is $0.
This card doesn’t offer ongoing rewards or a signup bonus, but it does come with no annual fee and no foreign transaction fees.
Capital One® Spark® Miles Select for Business
This last offer is perfect for business owners who need to invest or buy supplies without forking over a lot of money in interest payments. By signing up for the Capital One® Spark® Miles Select for Business, you’ll get 0 percent APR on purchases for a full 9 months with a go to rate of 14.49% - 22.49% (Variable) after that.
You’ll also earn an unlimited 1.5 miles per $1 spent on your card, along with a one-time bonus of 20,000 miles after you spend $3,000 on your card within three months of account approval. Your miles will never expire, and you’ll never pay foreign transaction fees or an annual fee to keep your card.
How to Use a Credit Card for a Large Purchase
Any of the cards on this list can help you save money on interest when making a large purchase. Some even offer rewards, which can serve as icing on the cake.
But, that doesn’t mean this strategy is foolproof. If you want to make credit work for you and not against you, make sure to follow these tips:
Have a plan for when your APR resets.
While scoring 0 percent APR is a huge advantage, it’s too good to last. Cards that offer this perk only do so for 12-21 months. Once your introductory offer is over, your card’s APR will reset to a regular rate.
If you don’t want to pay a lot of interest on your large purchase, try to pay your balance off before the introductory offer ends. At the very least, pay down as much as you can so you’re not stuck making huge interest payments for several months.
Only charge what you can afford to repay.
Credit cards offer the prospect of something for nothing. By charging your purchases instead of paying cash, you can get away with making small payments for years.
However, it’s crucial to remember that the chickens eventually come home to roost. You’ll need to repay every penny you charge eventually, plus interest and fees.
Don’t use rewards as an excuse to overspend.
While some of the best cards for a large purchase offer ongoing rewards and signup bonuses, it’s important to see those perks for what they are – an incentive to spend more.
While there’s nothing wrong with enjoying a little cash back, it’s important to understand that, if you carry a balance, the interest you’ll pay will wipe out the rewards you earn. Most of the time, it’s simple math; paying 15 percent APR to earn 1-2 percent cash back doesn’t make sense.
Planning to use credit for a large purchase? Make sure to compare offers, do the math, and set yourself up for success. While a credit card can help you make a large purchase without paying interest, using credit without a plan is rarely a good idea.