Finance

Spread the cost of big purchases with a credit card

We all make expensive purchases from time to time, whether they’re planned for or not. From the things we expect to pay out for, such as holidays and Christmas presents, to those costs that can crop up when we least anticipate them, such as urgent home repairs, many of us need to get our hands on a sizeable amount of money from time to time.

Putting the spending on credit cards is just one way of reducing the burden, spreading the cost over a suitable and manageable period. Of course, everyone’s different and everyone will have their own way of paying for those large purchases. Some will dip into their savings, while others will rely on an overdraft or an unsecured loan. If you’ve decided to go down the avenue of borrowing with a credit card, there’s a number of important things to keep in mind.

Why use a credit card?

One of the key advantages of credit cards is that they can offer the chance to borrow money at a 0% for a set period of time. If you’re looking to make a big purchase and put it on your credit card, a lengthy 0% period on purchases will be exactly what you’re looking for. If, for example, your card offers 0% on purchases for six months as part of an introductory offer, you’ll be able to spread your large purchase over this period without building up any interest, as long as you pay off your card’s minimum payment in full at the end of the month.

How to use a credit card

Being organised is the key to managing your money effectively on a credit card. If you’re planning to spend £2,000 on your card and spread it over your six-month introductory 0% deal on purchases, plan exactly how much you’ll pay off each month and where this money will come from.

How else can credit cards be useful?

If you’re coming to the end of your introductory 0% deal on purchases and still have some of your balance left to pay, you could decide to compare credit cards to look for a lengthy offer on a 0% balance transfer to give yourself a little more time to get your finances in order. You may also come across credit cards that offer introductory rewards, but beware – if balance transfers or purchases are your comparison factors, always focus on these first.