How to Make Large Purchase with Credit Card
Ways of Making Large Purchase with Credit Card
What is large purchase? Large purchase can be looked at from two angles. First, a transaction can be described as a large purchase if the amount of the item involved is quite high. For instance, if you are buying a laptop of $9,000, this can be considered as a large purchase because of the price involved. Another way to describe large purchase is when you compare the price of the item you are buying to your credit limit. Buying an item costing $3,000 when your credit limit is $4,000 will be a big purchase. Therefore, what can be described as a big purchase is relative.
But the question now is how can you make a large purchase with credit card? If you are looking at our second definition of what can qualify to be called a big purchase, making the purchase may not be difficult. Your credit card limit can accommodate the purchase. The only thing is that you may not be able to make much other charges on the same card for the month. But you should understand that this may likely force you to max out your credit card. And this will lower your credit score. But the effect of this on your credit score will soon disappear when you pay off the card balance.
What happens when your credit card limit falls below the price of the item you want to buy? There are two ways to go about this. You can split the payment into two. You can pay with your credit card while you pay the balance with cash. The seller may likely accept this option but you need to be sure before you make cash withdrawal. Another way is for you to transfer the money into your credit card. This will lead to positive balance on your credit card. With this, you will be able to have enough disposable cash on your credit card. Alternatively, you may require your credit card issuer to increase your credit limit. For your request to be granted, you must have a good credit score. Also, your income level and debt to income ratio must justify the credit limit you are asking for.
Read Also: Can You Buy Car with Credit Card?
In most cases, people don’t have enough cash to pay for large purchase. This makes credit purchase become inevitable. Before making any large purchase, you should evaluate your ability to pay back. Don’t forget that you will pay interest on the balance on your card. Nevertheless, you can avoid paying interest on the card balance if you use 0% apr credit card to make the purchase. With 0% apr credit card, you will not need to pay interest on the card balance all through the 0% apr introductory period. But you should prepare to pay off the entire card balance before the 0% apr introductory period expires. Otherwise, you will end up paying high interest rate on the card balance. The interest rate after at the expiration of the 0% apr introductory period is usually higher than that of the regular credit cards.