Here’s what to buy with a credit card to build credit and what to avoid, according to experts


Construction credit is important when you want to buy a house or a car. Having good credit will also get you lower interest rates when you want to get another credit card or apply for a loan. However, if you’re new to a credit card, knowing what to buy with a credit card to build up credit can be tricky. On the other hand, you might also be wondering what items you shouldn’t buy with a credit card when you’re just starting out. For all those questions you might have, Elite Daily reached out to experts at Bank of America and credit karma for their advice.

Of course, the first thing you think of when you get a credit card probably isn’t “how should I spend my credit card to build up credit?” Instead, you’re thinking about the cute and must-have items for your home that you need to add to your shopping cart. Or, if you’re worried about your payments, you might be too afraid to whip out your credit card while shopping. Colleen McCreary, Director of Human Resources at Credit Karma, told Elite Daily: “People often assume that using credit cards will negatively impact their credit score. However, this is usually not the case. In fact, to accumulate credit, you must prove that you are able to borrow responsibly and it usually starts with a credit card.

When it comes to finding ways to use your credit card wisely, experts say there are key things you can buy with a credit card to build credit and help you in the future. . You just need to know what those things are. For those wondering, “Should I use my credit card for everything,” here are some credit card tips that will help you answer that question.

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Jason Gaughan, Bank of America’s head of insecure products, told Elite Daily that payment history is the biggest part of a credit score. With that in mind, Gaughan says, “It’s important to always pay your bills on time – even if it’s just the minimum payment.” Gaughan also recommends that you always spend within your means.

So buying things you spend money on every month can be a great way to start building credit, like your groceries. McCreary says, “In the beginning, it’s best to buy things that you can pay back within 30 days. Since you’ve already factored your groceries into your monthly budget, you know you have the money to pay for everything you buy.

Much like your groceries, Gaughan also recommends gas as one of those daily purchases in your budget for things you can buy with a credit card. You might even get benefits for using your credit card for these purchases. “For example, the Personalized Bank of America Cash Rewards Card offers cardholders 3% cash back on purchases in a category of their choice each month, which can help you put money back in your wallet while building credit responsibly,” shares Gaughan. If you drive a lot, just choose “petrol” as one of your categories.

However, McCreary cautions, “If you’re able to get a credit card that offers rewards, make sure you understand how to get the most out of your rewards card.” So if you have a travel card, only use it for travel. Since gas can accommodate this, you’ll want to check that it qualifies in order to get the most out of your purchase.

If you’re wondering what items you shouldn’t buy with a credit card, Gaughan advises to “avoid putting expensive items on your credit card if your credit limit is low.” You want to stay within your means and “if you make expensive purchases like paying rent…on your credit card, it can lead to a higher usage rate, which will negatively impact your credit score” .

While your rent might be something you want to avoid right now, you can still pay for some of your utilities with your credit card. At first, you might not want to have all the utilities on your credit card, but things like your electric or water bill are a good start. McCreary suggests starting small and getting familiar with your payment schedule before increasing the amount of debt you take on.

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If you’re someone who treats yourself to a coffee from Starbucks or your favorite local coffee shop every week, this could be a great everyday purchase to add to your credit card. You can easily afford that $5 latte. However, make sure you are actually paying what you can.

“Remember that you’ll eventually have to pay back every dollar spent, plus interest and fees charged by your credit card company if you don’t pay off the original balance in full before it’s due,” warns McCreary. “If you fail to pay off your credit card debt, you could face high interest and penalties – not to mention damage to your credit ratings that could follow you for a long time.”

Another small monthly expense you already pay for that could be a nice addition to your credit card is a streaming service. McCreary says, “In general, it’s a good idea to start by using the credit for small, recurring expenses, like a monthly subscription…and paying it back every month.” So go ahead and pay for your Netflix, Disney+ or Spotify with your credit card.

Another recurring expense suggested by McCreary is your gym membership. You’ve already determined that it’s within your budget, and McCreary says that as long as you stay within that budget, “you’ll never have to choose between paying your credit card bill and covering the necessities.” So go ahead and give credit to your workouts.


Irregular purchases within your budget

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If you’re wondering, “should I use my credit card for everything,” Gaughan cautions against this. He says that while your credit card can be used for a wide range of purchases, “what’s most important is practicing responsible spending habits, like only making purchases that you know you can afford and pay your credit card balance on time and in full.”

If you know you can afford it, this includes irregular purchases from time to time. When you’re about to buy concert tickets or a cute top you saw while shopping online, it’s good to ask yourself, “How do I spend my credit card to create credit that fits my budget right now?” If you know you can pay it back quickly, that new Rare Beauty drop or Instagram-worthy happy hour cocktail can be one of the things to buy with your credit card to build some credit.

While these are all great things to buy with your credit card to build credit when you’re just starting out, you can also use some of the tools provided to you by your bank for a more personal plan. Gaughan recommends Best Money Habits for all Bank of America users. It is “a free financial education platform from Bank of America, available to anyone, that offers a wide range of financial advice and guidance, including building credit.”

Also as additional advice for building credit, McCreary encourages anyone to “keep your credit utilization below 30 percent.” You don’t want to max out your card like you’re Cher Distraught. Instead, use it when you need it and you’ll have a credit score worth bragging about.


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