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Last updated: 23/07/2020 | Estimated Reading Time: 4 minutes

When to use your credit card

Credit cards, when used correctly, can be an invaluable financial tool.

We’ll help you work out when it’s best to use your credit card to make purchases in order to take advantage of all of the benefits on offer.

We’ll also tell you when it’s best to use a debit card instead, so that you don’t end up swamped by credit card debt as interest rates spiral out of control.

In This Guide:

Credit cards vs. debit cards

A credit card allows you to spend money you don’t have at the time that you can then pay back at a later date. Even if you do have the money available, you can often benefit from using your credit card anyway and then paying back the balance in full before the interest properly kicks in.

We’ll go over a list of the best sorts of things to purchase using a credit card later in this guide, but they can be used for more or less anything. They are particularly good for making large purchases that would otherwise be tough given the timing of your pay cheques.

If you have a reward based credit card then you should use them as much as you can while still being able to comfortably pay off the balance each month.

The big thing to avoid with your credit card is making cash withdrawals as doing so will rack up hefty charges in interest. It’s always best to use a debit card to withdraw cash from an ATM while using a credit card to do so should be reserved for emergencies.


Using a credit card gives you an element of flexibility when it comes to budgeting, but it is important not to get complacent.

You should set up and use your credit card in accordance with what you can afford to pay back each month.

Your credit card will come with a minimum repayment amount each month but you should, wherever possible, try and exceed this as much as you can. If you just stick to the minimum amount each month, you’ll be paying your credit card balance off for a long time.

Payment protection

One of the reasons why credit cards are best used for large purchases is the protection you get in accordance with Section 75 of the Consumer Credit Act.

This protection means that in the event of either fraudulent use of your card or payment for an item that never arrives, the credit company is required to refund you when the retailer does not.

Section 75 protection applies to any purchases valued between £100 and £30,000.

Rewards and cash back

If you’ve got a reward based credit card then you’ve got even more of an incentive to use it instead of your debit card for day to day purchases.

Reward cards offer you benefits like cash back or points redeemable on flights when you make purchases using them.

It’s always important to make sure you stick within your budget though when you do use a reward card, as otherwise you could face rather high interest rates.

Top purchases to make with a credit card

Large One-Off Purchases

As mentioned above, Section 75 protection means added security when using your credit card to make large purchases like white goods.

But there is also the added benefit insofar as you can use your credit card for large one-off purchases when you don’t have enough money in your account to do so with a debit card. By making expensive purchases with credit you can pay for whatever it is you buy retrospectively over time.

Flights and Holidays

Buying flights and holidays using a credit card can be a good idea for the same reasons that apply to any other big one-off payments.

Additionally, many hotels will require credit card details for a deposit, and so booking your holiday without one can be tricky.

Travel Cards

Travel costs can be a major expense each month, particularly for those living in London.

Using your credit card to pay for your monthly travel card can allow you to free up that money from your monthly budget.

This works particularly well if you can time it so that you take advantage of your credit cards introductory interest-free period, if it is offered.

The same applies to any other regular expenses like mobile phone bills.

Supermarket Shopping

Many supermarkets offer special reward based credit cards offering you points redeemable on money off future shops with them.

This, combined with all of the benefits of credit cards mentioned above mean that putting your weekly shop on your plastic can be a great idea.

Compare credit cards with Money Expert

To make the most of your credit card, you should first decide exactly what kind of card you’re after, and then compare different ones online using our credit card comparison service.

We’ll show you a list of the best cards available in each category so that you can start using credit and reaping the rewards right away.