I charged $4k on my credit card for new furniture and paid it off the next day — was this a smart move?

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Recently, someone on Reddit posted a story about purchasing new furniture. The Redditor had just bought a house and wanted to buy $4,000 of furnishings for it. Instead of opting for in-store financing or using his debit card, he charged his purchases on a credit card instead. He wanted to know if this was a smart move.

Fortunately, the answer to this one is an absolute yes — given that he paid it off right away.

Charging and paying off big purchases is the way to go

This Reddit user made a very smart choice because he used his cash back card to get the benefits the card provided, and then paid off his purchase right away so he avoided credit card interest.

Charging items on a card and paying them off over time isn’t a good idea because the average credit card interest rate is 21.76%. Each purchase would become much more expensive for anyone who charged an item and didn’t pay it off in full when the bill came due. Charging furniture or other items and paying the purchases off immediately though, allows you to get all of the benefits of the card without the high cost. 

This Reddit user got 2% back on their card, which added up to $80 on a $4,000 purchase. That’s a pretty good amount of savings.

Not only that, but the poster also will get the protections that his card offers. Those specific benefits depend on his card but could include an extended warranty on his items, return protection in case there is a problem and the merchant won’t take the item back, and fraud protection if it turns out the furniture that’s delivered isn’t as promised. 

Whenever you are making a large purchase, if you have a credit card, it’s worth using it to get these benefits for yourself — as long as you know you will have the money in the bank to repay your debts and not make the credit card company richer by carrying a balance and incurring high interest charges.

Financing furniture usually isn’t a good move

Borrowing for stuff like sofas or TVs or appliances usually isn’t a great idea because you end up paying interest on assets that go down in value right away. Plus, by committing to a monthly payment for this stuff, you use up future income you haven’t even earned yet. It will be harder for you to live within your means in the future if you have a bunch of monthly payments coming out of your budget for furniture and other things you’ve bought. 

It’s also worth noting that sometimes furniture stores or other stores will offer you financing that seems like a good deal on the surface, such as 0% interest for a period of time. Be sure to read the fine print though, because these deals are often structured so that if you are late or miss a single payment or don’t fully pay the balance by the deadline, you end up owing interest retroactively. 

If you must buy something before you can fully pay for it, it’s worth looking for a 0% APR credit card that gives you 12 to 15 months interest-free on new purchases. As long as you have a plan in your budget to pay off the card before the promotional rate expires, you can enjoy an interest-free loan and get your essential items right away. Just be sure you stick to your plan to make your payments so you don’t end up with an unexpected bill in the end. 

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.