Thursday, February 2, 2023

How To Use Credit Card For Shopping

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Should I Use A Credit Card Or Debit Card For Online Shopping

Using your credit card when online shopping

Since you are a follower of Balanced Millennial Financial, you know that I assign a purpose to each bank account. I do all spending on credit cards and use the cash in each bank account to pay the credit card.

If I were to cut this article off right here, here is a TL DR.

If you are able to control your spending and pay off your balance every month, you should use a credit card for online shopping.

For those of you looking for the TL IDCLR , lets explore the difference between a credit card and a debit card.

Before You Make The Purchase

Fill your shopping cart by clicking Add to Cart or Add to Bag on each item you want to purchase. When youre done, click the Checkout button . You may have to click on the shopping cart first and then select the option to check out. Review your cart to be sure you’ve added the correct amount, sizes, and colors of the items you want to purchase. Then, you can begin the purchase process.

As with all credit card purchases, make sure you have enough available credit on your account before completing the transaction. Otherwise, your transaction could be declined and you’ll have to find another payment method. And, if you havent used the credit card in a while, you also need to be sure its active.

Why To Shop The Market

Its absolutely a good thing to shop around for just like you would shop around for a new refrigerator, says Beverly Harzog, credit card expert and author of The Debt Escape Plan. If you havent compared rates and other offers in the last year or two, its time to carve out some time to do it.

Even if you dont intend to change cards, getting informed about what else is out there can help you negotiate better terms from your current credit card issuer. And banks are as willing as theyve ever been to negotiate on things like credit limits, APRs and late fees, says Schulz.

Also Check: Cabela’s Rewards Card

Stay Under 30% Of Your Total Credit Limit

One way to keep your credit score healthy is to keep your credit utilization ratio under 30%. This credit utilization ratio is the percentage of total available credit that youre using. For example, if your limit is $1,000 you should keep your balance under $300. But the ratio applies to the sum of all your cards so if one credit card has a $3,000 limit with a $3,000 balance and a second card has a limit of $7,000 with no balance, youre right at the 30% mark which is where you want to be.

Best Credit Cards For Shopping Online With Department Stores

shopping with credit card

There are few cards, except specific store-branded cards, that offer bonus earnings for online department store purchases. Here are a couple of options if you have a large department store purchase you can make online.

  • U.S. Bank Cash+ Visa Signature® Card Earning big means selecting your own personal bonus categories. Youll earn 5% cash-back on online purchases with retailers such as department stores, sporting goods or clothing stores, electronic stores, and even furniture stores. Select 2 categories each quarter and youll be earning well on your online purchases made in those categories, up to $2,000 in purchases each quarter.
  • Blue Cash Everyday® Card from American Express While the card earns 3% cash-back at supermarkets , the card earns 2% cash-back at department stores, including online purchases.

Keep in mind that normally stores such as Walmart.com, Target.com, and warehouse club websites do not count as online department store purchases.

To learn more about department store-branded cards, weve done the homework for you in our articles on over 200 cards, including our take on some of the best cards issued by Comenity Bank and Synchrony Bank.

Also Check: Check Cabela’s Gift Card Balance

What Is The Difference Between A Debit And Credit Card

To get a debit card, you must open a checking account with a bank. Any bank. You deposit your cash with them and they give you a debit card to access your money.

You must have cash in your account to be able to spend using your debit card.

To get a credit card, you will apply for a credit card and get approved for a certain credit limit. Say $1,000.

You are able to borrow up to $1,000 and pay it back in the future.

If you dont have the $1,000 to pay back, you will carry a balance any pay interest at an obnoxious rate like 25%.

Do you see why a credit card can be riskier than a debit card?

Westpac Fraud Money Back Guarantee

Our Westpac Fraud Money Back Guarantee ensures that the cardholder will be reimbursed for any unauthorised transactions claims provided that you havent contributed to the loss and contacted Westpac promptly. Refer to your cards terms and conditions for full details of when a cardholder will be liable.

Recommended Reading: How To Pay Best Buy Credit Card On App

Reading Your Credit Card Statement

Each month, you’ll receive a statement showing your account activity. This statement includes:

  • Your total card balance
  • Purchases you made during that billing statement cycle
  • Minimum payment due
  • Payment due date

The minimum payment due is the smallest amount you have to pay for that month. But it’s always a good idea to pay more than the minimum if you can.

Your card statement will also tell you how much it will cost you to pay off the balance over time with interest. You can avoid interest charges on credit card balances by paying your bill in full during the grace period. A credit card grace period is a set time period, typically 20 to 30 days, that you have to pay off recent purchases before interest starts accruing.

If you don’t pay in full, interest begins to accrue. The amount of interest you pay is determined by your card’s annual percentage rate . The APR reflects the interest rate for the card, along with any fees the card charges, annualized as a percentage.

Cons Of Using A Debit Card For Online Shopping

How to stop using your credit cards for Online Shopping

While using a debit card may help you avoid overspending, it brings on some additional risks, especially when online shopping.

  • When your card is swiped, cash is removed almost immediately.
  • A fraudster wouldnt know how much is in your account but could take all of the money in your account and more. Debit card security is lower than credit card security.
  • If you overdraft your account, you will incur fees .
  • You dont build any credit while swiping your debit card.
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    Redeem Rewards For Holiday Purchases

    If you already have a hoard of credit card rewards whether it’s cash back, points or miles now can be a good time to use them for all your holiday purchases. Rewards can be redeemed in a variety of ways, from gift cards to travel.

    The value of cash back, points or miles varies based on how you redeem them, but we’ve outlined four common redemption options below so you can choose the best one for your needs.

    Gift cards

    Gift cards are one of the simplest redemption options. And that can be a smart way to use your rewards in part because gift cards are the number-one wish list request for nearly six in ten consumers, according to the National Retail Federation’s annual holiday survey.

    Card issuers typically set minimum redemption amounts for gift cards, usually at least $25. Many rewards portals allow you to get gift cards for major department stores, such as Macy’s and Bloomingdale’s electronics stores such as Best Buy restaurants such as The Cheesecake Factory and more.

    Statement credit

    Travel

    Travel is a good redemption choice, especially if you have certain travel cards that offer bonus value on points redeemed through the card issuer’s portal. The Chase Sapphire Reserve® offers 50% more value on points redeemed for travel on Chase Ultimate Rewards®. For example, 50,000 points are worth $750 toward airfare, hotels, car rentals and cruise reservations when you redeem through Chase Ultimate Rewards®. This is a great way to maximize the value of your rewards.

    What Are The Benefits Of Using A Credit Card

    The various pros and cons of credit cards largely depend on how you use them. Good spending habits can help you get a more out of them.

    The pros of a credit card are that they can help you with budgeting. For example, if you have a large item or service that you want to buy, you can spread the cost of repayment over several months, rather than having to have the money straight away.

    In addition, credit cards provide some protection if the goods or services are faulty or do not arrive.

    The cons of a credit card is that it is possible to get into debt and find that you are being charged interest on any credit card spending that you cannot pay back. It can be easy to spend money on your credit card without having a plan to pay it back, so make sure you are aware of how much you spend and think about how you will find the money to settle your bill at the end of the month.

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    Best Credit Card For Fast Delivery

    Our rating: 3.6 out of 5Score required: Good to excellentType of card: Cash backSpending categories: Amazon.com, Whole Foods, restaurants, gas stations, drug stores

    • 5% back on Amazon.com and Whole Foods purchases
    • 2% back on restaurant, gas station and drug store purchases
    • 1% back on other purchases
    • $100 Amazon gift card upon credit card application approval
    • No annual fee

    Our take: If you love shopping on Amazon.com and want your purchases delivered really quickly and dont mind footing a $119 fee for Prime membership the Prime Rewards Visa Signature card is the way to go.

    As grocery stores struggled to meet demand in the pandemic, many shoppers turned to Amazon Prime to buy food and essentials. Amazon Fresh users can even get items delivered for free in just two hours so why not earn some rewards in the process?

    Tip: This year, Amazon Prime Day is June 21 and June 22. Make sure to keep an eye out for great deals, and that you have one of the best credit cards for Prime Day ready to score rewards on your purchases.

    Best Personal Credit Cards For Any Online Shopping Purchase

    Using Credit Cards for Everyday Purchases

    No need to purchase from a specific retailer to earn rewards on these cards as every purchase you make, including online purchases, earns points, miles, or cash-back.

    Learn More
    • Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
    • Earn 5% cash back on grocery store purchases on up to $12,000 spent in the first year.
    • Earn unlimited 1.5% cash back on all other purchases.
    • Earn 5% on Chase travel purchased through Ultimate Rewards®, 3% on dining and drugstores, and 1.5% on all other purchases.
    • 0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99% – 24.74%
    • No minimum to redeem for cash back. Cash Back rewards do not expire as long as your account is open.
    • Annual Fee: $0

    Must Reads: For more info on the Chase Freedom Unlimited, see our thoughts on its benefits and our full review.

    Youll earn 1.5% cash-back on every purchase you make online, or anywhere. Youll also earn 3% cash-back at drugstores that may sell online merchant gift cards and on dining which can include food delivery.

    Must Reads: For more info on the Amex Business Platinum, see our insights on its benefits, top card FAQs and the best airport lounges you can access. Go here for our full review. This is one of several business credit cards from Amex.

    Read Also: How Do I Check My Cabela’s Credit Card Balance

    Watch Out For Interest Rates

    If you dont pay off your credit card balance in full at the end of the month, youll pay interest on your whole balance. This is unless youre in a 0% introductory period.

    As a new customer, you might get an introductory rate when you first get the card. But check whether this covers purchases or balance transfers or both. Remember, it wont cover cash withdrawals.

    Also, check what the interest rate will be once the introductory period is over and make sure you repay in full before then if you can.

    When To Hold Off

    Worried that applying for a new card could mean taking a credit hit? Generally, each credit card inquiry you apply for could knock two to five points off your credit score. That means, it shouldnt make much of a difference unless youre barely on the cusp between fair and good credit, says Harzog. Just make sure you dont apply for multiple credit cards at one time it can make you look desperate to lenders. Better to leave a few months between each application.

    And if youre planning on applying for a mortgage, its a good idea to not only not apply for new credit, but to stop most credit card activity about six months ahead of time, says Harzog. That way, you can pay down any debt and keep your utilization ratio low to boost your score. Keep on doing this even after youve been pre-approved.

    Also Check: App For Best Buy Credit Card

    How To Use A Credit Card For Online Shopping 9 Tips For First Time Users

    Owing to the steady shift towards a digitalized economy, India is currently one of the largest credit card user bases with more than 47 million users in 2019.

    This market is anticipated to escalate at a CAGR of 25%+ during 2020-2025. Much of this can be attributed to the growing tendencies to purchase first, and pay later.

    In an attempt to personalize this financial product, credit card companies have brought in multiple variants that cater to the customized spending habits of individuals.

    Such variants include shopping cards, fuel cards, travel credit cards, etc. The increased popularity of e-commerce platforms and online shopping has brought in the need to use credit card for shopping that comes with numerous financial leverages.

    It includes earning reward points, a welcome bonus that can be later redeemed against vouchers, discounts, cashback, etc. at the partner outlets.However, considering that shopping credit cards offer cardholders with access to substantial funding, individuals need to refrain from making the wrong financial decisions.

    Here are a few of the essential tips that card owners need to adapt or adhere by to make the best of a credit card for online shopping

    How We Picked These Cards

    Shopping at a store using your Credit Card

    We chose our top credit cards for shopping with a variety of shopping habits and preferences in mind.

    First, we considered the type of rewards program. While some shoppers prefer a flat rewards rate on everything, others might want the chance to maximize their rewards on certain everyday spending categories.

    We also wanted to include a few retail credit cards from large stores that offer a wide range of items because they offer some of the best rewards for their regular shoppers.

    Recommended Reading: How Do I Check My Cabela’s Credit Card Balance

    You See Incorrect Charges On Your Credit Card Statement

    Every so often, you may see an incorrect charge on your statement. Maybe a retailer never refunded you for an item you returned, billed you twice for the same item or charged you an incorrect amount. Whatever the case, these errors can likely be corrected.

    What to do: Contact your credit card issuer to let them know about the incorrect charge. This will typically kick off an investigation on their end into the charge, and if they conclude that the charge is erroneous, you will not be liable for paying it.

    Learn: The Top Purchases You Should Always Make With a Credit Card

    Whats The Easiest Store Credit Card To Get

    Application standards for store credit cards arent typically made public, but its generally agreed that many retail credit cards can be easier to get than other types of cards. But that isnt true across all store credit cards, so dont assume that youll be able to qualify when you apply.

    We advise doing research on specific cards before you apply, especially if youre trying to build your credit.

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    What Are The Different Kinds Of Credit Card

    Make sure you get the right kind of credit card for you. Some cards are designed for dealing with debt, while others are better suited to regular spending. Do not only pay attention to headline interest rates, but think carefully about the advantages of each one.

    For example, some credit cards reward you for spending, others give cashback, some do not charge fees even if you use them abroad, and others can help you build up loyalty points at retail outlets.

    The best credit card for you is the one that works for your lifestyle. If you cannot clear you credit card bill each month then a card with a low interest rate would suit you better. If you always pay off your bill in full then you might want to consider a credit card with perks or rewards so you can make the most of your spending.

    Compare different types of credit card using our comparison table.

    How Can I Avoid Getting Into Debt With A Credit Card

    Using Credit Card Payment Terminal In Shop Stock Photo ...

    It can be very easy to fall into the debt trap if you do not use your credit card wisely.

    For instance, if you:

    • Only plan to pay the minimum monthly repayment

    • Always use the full amount of credit

    • Forget to make a repayment every month

    Instead of thinking of your credit card as quick and easy money, you should consider it to be nothing more than a short-term loan. It may be called a “credit” card, but it is in fact a debt card.

    Always have a repayment plan and always be aware of how much APR interest you are paying. If you are struggling to keep up with repayments you can contact a debt advice charity like National Debtline or StepChance. They will give you credit card debt advice for free. You do not need to pay for debt advice and counselling – these charities will help you free of charge.

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