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Rewards credit cards can bring a lot of value to the table—especially when you use them for large purchases. Over the years, I've earned thousands of dollars in free travel by using credit cards to pay for products and services with expensive price tags. However, I always follow several important rules before I pull my credit card out of my wallet. 

Read on for a look at some of the biggest purchases I've made with a credit card. I'll also reveal how I earn rewards without hurting my credit score or wasting money on interest. 

The Biggest Purchases I've Made With a Credit Card

When I make big purchases, I'm always sure I have enough in savings to afford charging them—and to avoid interest payments (more on this below). With this strategy, my transactions have also helped me qualify for lucrative sign-up bonuses and earn thousands of dollars' worth of credit card rewards. Here are the three biggest purchases I've put on my credit cards.

1. I Bought a Car With a Credit Card

Let's start with one of the biggest purchase I've ever made with a credit card—and the one that seems to surprise people the most. During the pandemic, my husband and I bought a car with a credit card

We purchased a used vehicle with money we already had in an auto expense savings account. The $8,500 purchase qualified us for 8,500 in valuable Chase Ultimate Rewards points. And we could have scored even more rewards if we'd had the time to open a new credit card with an attractive sign-up bonus first. 

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Credit Card Rewards Rate Annual Fee Bonus Offer Learn More
1x- 5xPoints More Info

Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.

$95 75,000Chase Ultimate Rewards Points More Info

Earn 75,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's over $900 when you redeem through Chase Travel℠. Dollar Equivalent: $1,725 (75,000 Chase Ultimate Rewards Points * 0.023 base)

1x - 3xPoints More Info

Earn 3 points for every $1 on Southwest Airlines® purchases, 2 points for every $1 on Rapid Rewards hotel and car rental partners, 2 points per $1 on local transit and commuting (including rideshare), 2 points per $1 on internet, cable, and phone services; select streaming, and 1 point for every $1 on all other purchases.

$99 85,000Southwest Rapid Rewards Points More Info

Earn 85,000 bonus points after spending $3,000 on purchases in the first 3 months from account opening. Dollar Equivalent: $1,190 (85,000 Southwest Rapid Rewards Points * 0.014 base)

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$0 $200Cash Bonus More Info

Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.

Citi Custom Cash® Card

1% - 5%Cashback More Info

Earn 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, 1% cash back thereafter. Also, earn unlimited 1% cash back on all other purchases. Special Travel Offer: Earn an additional 4% cash back on hotels, car rentals, and attractions booked on Citi Travel℠ portal through 6/30/2025.

$0 $200Cash Bonus More Info

Earn $200 in cash back after you spend $1500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® points, which can be redeemed for $200 cash back.

2. My Family Paid for Major Home Repairs With Credit Cards

The most rewarding purchase I ever made with a credit card was an $8,000 HVAC unit replacement. When our old unit started acting up, we already had cash tucked away for the replacement in a savings account. Yet we also knew that paying for the purchase with a credit card (and then paying off the balance) could net us some valuable rewards.

Unlike the car purchase, my husband and I had time to plan ahead and maximize our rewards earning potential with this home improvement project. We each opened a popular Southwest credit card, then earned its sign-up bonus and the coveted Southwest Airlines Companion Pass® for the remainder of the year. 

By splitting the purchase into two transactions, we both met the initial spending requirement and qualified for our sign-up bonus. Thanks to the Rapid Rewards points we earned and our dual Companion Passes, our family enjoyed 10 free flights valued at over $3,800 that year. 

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3. I Pay for Medical Bills With Credit Cards

I also use credit cards to pay for medical bills. My family has medical coverage through a health care share plan with a $3,000 deductible that resets every November. Thanks to a case of unlucky timing, we recently incurred our full deductibles for two years—$6,000 in total—within a span of a few short months. 

In this situation, we didn't want to wipe out $6,000 of our savings during the middle of a pandemic and my maternity leave. So, we worked out interest-free payment arrangements with most of our medical providers. Each month I make these payments with a credit card and we get some added rewards for these expenses. 

How to Safely Make Large Purchases with a Credit Card

Keep these ground rules in mind before you jump into putting a big expense on a credit card. It's critical to manage your credit card accounts carefully, or your card—and interest payments—could work against you. 

1. Save in Advance

Before you use your credit card for a big purchase it's best to put aside money in advance. In my household, we only pay for transactions with a credit card when we already have the cash available to make the purchase. (It's a lesson we learned the hard way after digging our way out of credit card debt, twice.)

It's understandable that you might need to finance a large expense over a series of months or years. But credit cards usually aren't the best way to go in this situation. The average credit card APR on interest-assessing credit card accounts is relatively high. If you have a decent credit rating, you could probably secure a personal loan or other financing at a better rate. 

2. Pay Your Statement Balance in Full

The ideal way to manage your credit cards is to pay your statement balance in full each month. And during months when you run up account balances with large purchases, paying your bill in full matters even more. Because I make a habit of paying credit card balances in full, I'm able to earn points, miles or cash back on my purchases without incurring interest fees. 

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3. Watch Your Credit Utilization Rate

Credit utilization—the relationship between your credit card limits and balances—has a big impact on your credit score. Large purchases can drive your credit card balances up (at least temporarily), and that may cause your credit utilization rate to increase. As a rule, high credit utilization isn't good for your credit score. 

To avoid credit score damage, even on a short-term basis, I pay my credit card balances off before the monthly due date. Credit card issuers report account details to the credit bureaus once a month, near your statement closing date (around 21 days before your due date). By paying my full balance before the statement closing date, I keep my credit utilization rate low on my credit reports

Bottom Line

The ability to earn rewards on my spending is one of my favorite credit card perks. It's a big reason why I opt to pay with a credit card whenever possible. But if I don't have the funds to pay off a large purchase right away, my credit card stays in my wallet. 

Credit cards can be a convenient, safe and rewarding way to pay. But they can also be an expensive financing choice if you don't have the cash set aside to cover an expense.

ML

Michelle Lambright Black

Michelle Black is founder of CreditWriter.com and HerCreditMatters.com. Michelle is a leading credit card journalist with over a decade and a half of experience in the financial industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, small business, and debt eradication. Michelle is also a certified credit expert witness and personal finance writer.