For Big Purchases, Swap BNPL for These Credit Cards With Longer Interest-Free Periods and Perks

Maybe you want to buy furniture for your new place or surprise your boo with a gift that'll knock their socks off. If you're considering using a popular Buy Now, Pay Later plan for your big purchase, you may not realize that a credit card can serve the same purpose -- sometimes with more benefits. 

Certain cards offer a 0% introductory APR on new purchases for a limited amount of time, typically nine to 21 months. If you can pay off the charge before the introductory APR period ends, you're essentially getting an interest-free loan that lasts several times longer than the ones typically offered by BNPL plans. Just make sure you have a plan to pay off the entire balance within the designated time frame, or the card's regular APR -- which can often be over 20% -- will kick in on the remaining balance.   

Some of the best credit cards for big purchases have no annual fees, and many also offer competitive welcome bonuses, cash-back rewards programs and purchase protection. So the right credit card can help you save on your big purchase and net you extra benefits. Here's what to look for.

Should you use a credit card for big purchases?

When used responsibly, a credit card can help you earn you rewards and provide extra security. A 0% introductory APR offer can help avoid interest charges -- so long as you pay off the balance by the end of the promotional period. Credit card welcome bonuses could provide additional value if you're able to qualify.

Rewards credit cards may even include additional perks that make shopping more secure by utilizing virtual card numbers to decrease the likelihood of online fraud and by providing purchase protection or an extended warranty.

It's important to proactively plan out your spending on your credit card. Having access to a large credit line and a strong rewards rate can make it tempting to spend money you don't have, and credit card debt can add up quickly. It's all too easy to get bogged down by high interest charges and large monthly fees. Missing monthly payments could result in punitive late fees, higher interest rates and a lower credit score.

How to choose the best credit card for big purchases

If you're looking for a credit card for large gifts or other purchases, you'll want to think about which card features would best support how you plan to use it. Consider this:

What are you planning to buy?

If you're looking to finance a big-ticket item, you may want to use a credit card with a low or 0% introductory APR period. Your purchases won't accrue any interest during the promotional period, giving you more time to pay off the balance. That noted, if you don't pay off the purchase before the end of that period, you will begin to rack up interest charges, which can be significant.

Rewards

Credit cards primarily earn rewards as points, miles or cash back. The most straightforward type of credit card reward is cash back, which you can typically redeem as a statement credit, a direct deposit into your bank account or with specific merchants at checkout. A 1% cash back rate will usually net you one cent back per dollar spent, whichever way you redeem it.

Reward points are often more complicated but also potentially more valuable. How you redeem -- options may include merchandise, gift cards or travel -- is likely to affect the value of your rewards.

For example, using your points for purchases with retailers like Amazon may yield lower values than if you were to transfer them to the card issuer's travel partners.

Annual fees

An annual fee will cut into any rewards you may earn, so it's important to consider whether your spending will yield enough rewards to cover the cost of the card, and then some. You could find additional value from the card's perks. 

Welcome bonus

If the purchase is big enough, you could potentially earn a welcome bonus in one shopping trip. Just be sure you're not overspending just to earn the welcome bonus -- if you aren't able to pay off the purchase and start accruing interest, those fees could wipe out the value of your welcome bonus. 

Other factors

Purchase protection, extended warranty and virtual card numbers are all good things to look for when choosing a card for your big gift spending. 

Purchase protection covers your new purchases against damage and theft, usually for either 90 or 120 days. Extended warranty will increase the length of a manufacturer's warranty on eligible purchases. Virtual card numbers are a unique 16-digit code generated for you to use in place of the one printed on your physical card. It's meant to limit the chances of fraud.

How to maximize your rewards

Take advantage of any discounts your card may offer. Most of the major credit card issuers have shopping portals for cardholders where they can access discounts with specific merchants.

When it's time to check out, be sure you're using a credit card that earns rewards for the purchases you're making. Once you've earned rewards, make sure to redeem them in the way that provides the greatest return on your spending. With rewards cards, that typically means redeeming for statement credits or depositing the rewards directly into your bank account.

Or, depending on your card, you could go the extra mile and leverage different airline and hotel transfer partners of your credit card. It takes a bit more work, but you can often find a greater per-point value by using your rewards to fund travel.

Big purchase budgeting tips

Using a credit card responsibly for big purchases could cut back on some of the expense. Here are a few things to think about:

• Stick to your spending limits. Create a budget and do your best to not deviate from it.
• Take advantage of any deals or discounts your credit card issuer features.
• Plan ahead. If you're able to save money ahead of time, you'll feel less of a financial strain. And if you have enough money saved to cover the card's welcome bonus spending requirement, you could earn even more without having to worry about overspending.

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