So, you’ve finally done it. You’ve found the perfect apartment, have the keys in hand, and now it’s time to relax and enjoy the new digs. Of course, the only problem is you don’t have much furniture to sit and relax on. It may make sense to use your credit card to furnish and decorate your new apartment. Here are four reasons why:
1. Access to money when you need it most. You’ve just paid out your first and last month’s rent and possibly a security deposit to land the apartment. It could be several weeks or months before you have more money available to start buying furniture. Credit cards with 0% financing give you an opportunity to make payments without interest over a longer period of time. Look for credit cards with a 12 month promotional offer of 0% interest on new purchases to give yourself a year to pay back your furniture and décor expenses.
2. Purchase protection offered on most cards automatically covers the stuff you buy with your credit card against damage, theft or loss for a specific period of time. Check whether or not your credit card offers purchase protection. If it does, you may be able to avoid paying renter’s insurance, as long as your purchases are protected for free by the purchase protection benefit that is included with the credit cards.
3. Establish your credit history and build a strong score. Many first-time apartment renters are just beginning to obtain credit. Using a credit card responsibly will result in a good credit history that shows you make your payments on time, and help you establish a FICO score that will be used for the rest of your life whenever you are applying for credit.
4. Earn rewards. Credit card rewards programs offer much more than the 1% cash back offers of yesterday. In fact, a number of credit cards allow you to earn gift certificates to leading retailers, merchandise from selected retail stores or catalogs (both can help you get additional furnishings for your place), gas rebates, and higher amounts of cash back when shopping for items within certain categories. For example, a credit card with a home improvement rewards program might earn you 3 to 5% cash back on all purchases made in a home improvement store. This helps you save money on the things you have to buy, anyway.
When using a credit card to furnish your new apartment, make sure you choose a card that allows you to repay the balance over several months without interest or fees; and one that offers a rewards program you’ll actually use. Be responsible with your credit card payments to keep your 0% interest rate, as one late payment will often cause the card’s interest rate to skyrocket. It may be wise to set up an automatic payment option for the credit card through an automatic bank draft on a set date each month. That way, your payment is never late and you benefit the most from furnishing your apartment with your credit card.
Important Note: We know what it’s like to feel the joy of slapping the credit card down to get what you want, right now. We’ve also felt the pain of receiving the monthly statement and realizing with a sinking heart that we way overspent. Credit card debt is serious and you should always be sure that you spend within your means. Our intention with this post is to provide people with advice on how to use credit cards wisely (for example, seek out a 0% interest card and pay it off before the 0% expires!). Though credit cards can be dangerous if you simply go hog wild with your spending (DON’T), they can also be very helpful when you hit a month where you have extraordinary pulls on your cash (like putting down a first and last month’s rent).
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Debbie Dragon is a writer for CreditorWeb.com, where she writes about credit card offers, rewards programs and personal finance.