Racking up debt is never a good thing, but you shouldn’t ban all credit cards from your life just because you want to avoid debt. In fact, if used wisely, credit cards can be extremely beneficial, especially when it comes to tech purchases. Here are a four reasons why you should purchase all of your gadgets with a credit card.
So many times the manufacturer’s warranty that comes with a new cell phone falls short; either it does not cover everything, or issues start to arise after the warranty expires. Purchasing an extended warranty is always an option, but that can add on up to $99 to the cost of a phone, and cell phone plans are already expensive.
Fortunately, some credit cards come with phone protection plans. For example, the Wells Fargo Rewards Visa is a free card that offers up to $1,200 in cell phone protection (after a $25 deductible). You don’t even need to buy your cell phone with this card. Instead, pay your monthly bill with the Wells Fargo Rewards Visa, and you will be covered for up to four cell phones that are listed on your cell phone bill. The maximum benefit limit is $600 per occurrence and $1,200 per 12-month period.
When you purchase an appliance or gadget, the salesperson will usually ask you if you want to purchase the extended warranty plan. On one hand, you want to keep your pricey purchase protected, while on the other hand, it is hard to part with $40–80 for a service you might not use. Make your purchase with a good credit card, and you will not have to decide.
Many credit cards offer extended warranties on their purchases so you don’t have to spend the extra money on one from the manufacturer or retailer. Each card has its own set of rules and fine print, so be sure to know the loopholes before applying.
American Express cards come with the best extended warranties, giving users up to five years’ protection on some purchases. The American Express Blue Cash Everyday Card matches the length of the original warranty if the original manufacturer’s warranty is less than a year. For original warranties that cover one to five years, Amex provides one additional year of coverage. The coverage does not cover items with physical damage, software, or a few other things.
Ever buy something thinking you were getting a great deal only to be burned a few days later when the price dropped? With the right credit card, you will not have to worry if the price goes lower. Many cards offer a price matching benefit that will refund the difference.
The Discover it® Cashback Match is one of the better cards for tech lovers, as it will refund you up to $500 if you find a lower price on an item within 90 days of your purchase. The card offers 5% cash back on quarterly rotating bonus categories, including 5% cash back on Amazon at the end of the year. If the 5% cash back is eligible on tech purchases through Amazon, then buying an Xbox One S 2TB console can earn you almost $20 in cash back.
Citi cards also come with Citi Price Rewind, which makes it very easy to get the lowest price on an item. Just buy an item with your Citi card and save the receipt. Within 60 days of your purchase, log in to Citi’s Price Rewind database and search for your item. Once your item is selected, Citi will do all of the work tracking lower prices. If you find a lower price outside of the database, there is also an option to send in a refund form. Citi refunds card holders up to $500 per item and up to $2,500 per year.
Promotional 0% APR
It can be hard to wait and save up for the latest and greatest tech gadget that comes out. The smartest way to pay for your pricey purchase without reaping the negative consequences is to use a 0% APR card. A few different cards offer 0% APR for a promotional period when you first sign up. The Citi Simplicity® Card has the longest 0% APR intro period, which allows you 21 months of no interest charges when you first open the account.
Only buy what you can easily pay off within the promotional period. For example, if you want this ASUS gaming laptop, it will cost you $999 plus tax. Be prepared to pay about $60 per month on the Citi Simplicity Card to completely pay off the laptop without getting hit with costly accrued interest.
It is also a good idea to set up reminders in your calendar so that you don’t forget to pay off the debt before the promotional period is over. If you don’t, you could be held accountable for accrued interest charges across the entire period, even if you pay off 90% of your debt before the 21 months is up. Don’t fall into the trap of paying only the minimum payment or waiting until later to chip away at your new debt.
Of course, you’ll want to make sure that you’ve developed some good spending habits before you start putting purchases on a credit card. Make sure to avoid overspending when you buy new tech gadgets, especially since the newest technology can become outdated within only a few years. It’s important to always carefully monitor your credit card use, as they can quickly get you into debt; but when used wisely, they can provide huge benefits with tech purchases.
Have you ever used one of these credit card benefits? Or do you have recommendations for other good benefits that others could take advantage of? Share your best tips in the comments below!