You Should Always Use A Credit Card For These 5 Expenses

Many people insist on using cash instead of credit cards when making a purchase. Certainly, using cash can provide a sense of comfort in knowing exactly how much you are spending and therefore help you manage your finances more closely.

While this philosophy has its merits, it ignores the fact that using a credit card can give you a host of benefits. In fact, there are some expenses in particular that you should always pay for with your card. By doing this, you can save yourself a significant amount of money by wracking up rewards. Here is a list of five different expenditures that fall into this category.

Related: 4 Ways to Save Money When Comparison Shopping Online

Business expenses

Some business owners, especially those with a traditional bent of mind, prefer to pay for their expenses by cash or by cheque. They think that credit cards are only for personal use and should not be used for official expenditure.

However, using a credit card to pay for your day-to-day business expenses can actually be very helpful. A dedicated card can help you to keep track of every payment that you make. This can be particularly useful when it is time to file your tax, as you can use your monthly billing statements to compile your business expenses instead of spending hours looking for old vouchers and receipts.

Related: Best Corporate Credit Cards for Businesses 2024

Overseas trips

Next time that you plan an overseas holiday or a business trip, you must use your credit card to book your flight tickets and accomodation. While credit cards come with various rebates and mile awards for regular expenses, travel booking is a category that card issuers have been particularly generous with in terms of their rewards.

For example, the UOB PRVI Miles Card is a great example of a travel card with a generous set of rewards. Not only does it provide access to airport lounges all over the globe, it also rewards 6 miles for every S$1 that you spend on large travel booking sites like Expedia and Agoda. That is on top of the 2.4 – 5 miles per S$1 spend you can earn on overseas spending.

UOB PRVI Miles American Express Card

High spenders and frequent travelers looking to rapidly accrue miles should consider UOB PRVI Miles card.

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Pros

• Great for rapid miles accrual
• Awards high spend on airlines & hotels
• Annual fee waiver with Amex card

Cons

• Doesn't fit infrequent travellers with mostly local budgets
• Lacks luxury perks & privileges

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This card as well as several other travel credit cards also come with free travel accident insurance coverage to their cardholders and their families.

Related: Best Air Miles Credit Cards in Singapore 2024

Car rentals

In order to compete against one another and attract more customers, many credit card issuers have tied up with car rental companies to offer large discounts on car rentals.

For example, Standard Chartered Priority Visa Infinite credit card provides a 10% discount on car rental bookings with Rentalcars.com, the car rental subsidiary of Booking.com. If you are looking to book a car for an overseas road trip vacation, these savings can add up very quickly, greatly outshining any deal you can get if you opt to pay for your car rental in cash.

Online and store purchases

Making a purchase on your computer from the comfort of your home is very convenient. But it can also expose you to online fraud. In an effort to address this concern, most card issuers offer to compensate buyers if their card details are used by an unauthorised person. For example, the American Express Online Fraud Protection Guarantee can be of great help if your card details get compromised.

Besides this, there are other benefits of using a credit card to pay for things online. While rebates and mile rewards for shopping are quite well known, there are other less prevalent but important benefits that you can take advantage of. For instance, the Standard Chartered Priority Visa Infinite Card provides eCommerce Purchase Protection that provides coverage of up to US$$1,000 per claim per annum if your tracked online purchase is not delivered, wrongly delivered, or is physically damaged upon arrival.

Related: 6 Ways to Protect Yourself From Credit Card Fraud

Any expensive purchase, but don’t forget to pay your bill in full

In general, it could be wise to pay for any large purchases with a card. Since most cards come with some level of cashback or mile rewards, making a big purchase is also an opportunity to earn a lot of card rewards. In particular, cards like the Citibank Cashback + Card or UOB Absolute Cashback Card can be quite effective in earning savings since they provide an unlimited amount of cashback at a rate of 1.6% – 1.7% on all your purchases.

UOB Absolute Cashback Card

UOB Absolute Cashback gives you 1.7% limitless cashback on all categories, no limits, no minimums and no caps.

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Pros

• Unlimited cashback
• No min, caps or exclusions
• American Express Card privileges

Cons

• Low cashback rate for smaller budgets
• Annual fee

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However, there is a big caveat to this principle. Although there are tremendous advantages to using your credit card to make a purchase instead of using a debit card or cash, you must pay off the entire amount in your monthly statement on a regular basis. Failing to do so and rolling over your credit card balance can easily wipe out all of the discounts and rewards you’ve earned, since card balances accrue interest at a rate of around 26% per year.

As long as you use your cards prudently and you down pay your balance in full, using a credit card can make your free up both time and resources so you can do more with your life.

Read More:

• Best Cashback Credit Cards in Singapore 2024
• Should You Pay Your Rent with a Credit Card?
• Why You Should Not Hoard Your Credit Card Rewards
• How to Reduce Your Singapore Credit Card Fees to Effectively Zero
• Guide to Foreign Transaction Fees From Overseas Credit Card Spending

Cover image source: Unsplash