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3 Reasons to Buy Appliances With Credit Cards

Two people talking next to a washing machine in an appliance store.

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Appliances aren’t the sort of purchase you’re going to be making every day. Rather, you’re usually looking at buying new appliances in a pinch to replace a bum dishwasher or failing fridge. Or you may be purchasing appliances in conjunction with a home renovation.

Either way, you have a choice when it comes to buying appliances: Pay cash or use a credit card. In many cases, the credit card option is your best bet. Here’s why.

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1. You can earn big rewards

The amount of cash back you’ll get from a credit card will hinge on the specific card you have. But let’s say your card offers 1.5 points per $1 spent on general purchases, and appliances fall into that category. If you’re spending $5,000 on a new stove, dishwasher, and fridge for your kitchen, you’ll get $75 of that back, just like that.

Of course, you’ll always need to check and see if there’s any sort of surcharge for using a credit card that might exceed the amount of cash back you get. If you’re buying appliances from a major retailer, that generally won’t be the case. But if you’re buying them from a local business that tacks on a 3% surcharge for credit card purchases, then it obviously won’t make sense to use a card and get only half of that surcharge refunded as cash back.

2. You may get protection in case the price goes down

When you’re forking over a lot of money for appliances, it can be a real blow to see the cost of a given item drop just days after you’ve had it installed in your home. Some credit cards, however, may offer price protection so that if you buy an appliance and its price falls a week later, you’ll get refunded the difference. Considering that appliances aren’t the sort of thing you can easily take back to the store, that’s huge.

3. You may get an extended warranty

When you buy appliances with a credit card, you may get a warranty from your credit card itself that’s separate from the warranty that comes with your purchase. Some credit card warranties may even double the warranty provided by your manufacturer. Of course, you’ll need to read the fine print on your credit card agreement to see what protection you’re entitled to.

Make sure you can pay off your appliance purchases before putting them on a credit card

Clearly, there’s much to be gained by using credit cards to purchase appliances. But before you go this route, make absolutely certain that you’re in a position to pay off your credit card bill in full.

If you rack up interest on a credit card balance that includes your appliances, you’ll negate the benefit of the cash back you earned. And in time, those items might end up costing you a lot more than you bargained for.

Case in point: A $5,000 appliance purchase paid off over three years at a 20% APY will cost you $1,690 in interest. That’s basically one-third of the cost of your purchase itself.

So it’s really best to have the cash on hand to cover the appliances you’re looking to get. As long as you have the cash, though, you might as well use your credit cards for the benefits above.

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