Building credit can feel like climbing a steep mountain, especially if you’re starting from scratch or you’re building back up after a big drop in your score.
You’ve probably heard that using your credit card wisely is key, but what exactly should you buy to boost your score?
Well, it turns out that the things you’re already spending on, like groceries or streaming subscriptions, can actually help you build credit… that is if you do it right.
In this article, we’ll share with you the six best things to buy with your credit card to boost your credit score while still keeping things simple. Let’s make that credit card work for you!
How Buying with a Credit Card Helps Build Credit
Your credit score is shaped by two big things: how much credit you’re using (credit utilization) and whether you’re paying your bills on time (payment history).
So, how does using a credit card help? When you purchase with your card, your credit utilization rate can either go up or down. Try to keep your spending u>below 30% of your total credit limit. If you go above that, it can send up red flags for lenders.
Also, using your card and paying your balance off regularly helps show a good payment history. Make sure to pay at least the minimum amount by the due date, but if you can, it’s better to pay off the full balance each month.
3 Minor Purchases to Build Credit
Building credit doesn’t always require large expenses. In fact, small, everyday purchases can effectively boost your credit score when managed responsibly. Here are three minor purchases that can help increase your credit score while keeping your budget in check.
1. Groceries
Groceries are a staple in everyone’s budget, making them an excellent option for credit card purchases when you’re looking to build your credit. Additionally, many credit cards offer higher cash-back percentages on purchases in U.S. supermarkets like Whole Foods, Stop and Shop, and Foodtown. These include the following:
- American Express Blue Cash Everyday®: Earn 3% cash back on purchases at U.S. supermarkets.
- American Express Blue Cash Preferred: Earn 6% cash back on purchases at U.S. supermarkets.
- American Express Platinum Card®: Up to $12.95 credit each month after you pay for a monthly Walmart+ membership.
- Bank of America® Customized Cash Rewards Credit Card: Earn 2% cash back at grocery stores.
- Capital One SavorOne Cash Rewards Credit Card: Earn 3% cash back on purchases at U.S. grocery stores (except for superstores like Walmart and Target).
When you use your credit card for grocery shopping, you’re not just covering an essential expense—you’re also earning rewards and building credit. Just be sure to pay off your balance in full each month to dodge interest charges and keep your credit utilization in check.
2. Utilities
Using a credit card for utility payments is another smart way to build credit. Many credit cards offer rewards for payments, meaning you can earn points, miles, or cash back on essential expenses like this one. This can also help you consolidate multiple bills into one payment, making it easier to track your finances. However, check if your utility provider charges a convenience fee for credit card payments and weigh the benefits accordingly.
3. Streaming Subscriptions
Streaming subscriptions like Netflix, Hulu, or Disney+ are perfect for credit card payments. These low-cost, recurring expenses are easy to manage and can contribute to a positive payment history. Just set up autopay, and you’ll never miss a payment. Since you’re using these services all the time, keeping up with payments is a no-brainer and a smart way to improve your credit.
Here are some of the best credit cards to build credit by paying for streaming subscriptions, as they offer cash-back rewards:
- American Express Blue Cash Preferred: Earn 6% cash back for select U.S. streaming subscriptions.
- American Express Platinum Card®: Up to $240 a year for digital entertainment purchases.
- Capital One SavorOne Cash Rewards Credit Card: Earn 3% cash back on popular streaming services.
- Citi Custom Cash® Card: Earn 5% cash back on select streaming services.
- Bank Cash+® Visa Signature® Card: Earn 5% cash back on your chosen category, including streaming services.
To stay on top of recurring expenses like streaming subscriptions and avoid late fees, try Cushion. This app consolidates all your accounts into a single dashboard, making it easy to see which bills have been paid and what’s coming up. By setting up autopay through your virtual Cushion card for these frequent billers, you can effortlessly build a positive credit history with every on-time payment.
3 Major Purchases to Build Credit
Apart from the daily small purchases, big-ticket items can significantly impact your credit score when purchased strategically. Here are three major purchases you should use your credit card for to build credit while earning potential rewards and benefits.
1. Appliances and Electronics
When considering what to buy to build credit, investing in appliances and electronics can be a great option. Air conditioners, refrigerators, and washing machines often come with higher price tags. Paying off these big-ticket items promptly can significantly boost your credit score and demonstrate your ability to manage larger amounts of credit.
Additionally, many credit cards offer price protection and extended warranties on such purchases, providing added value and security. These include:
- American Express Platinum Card®: Up to $10,000 in purchase protectionfor every item covered and extended warranty coverage.
- Bank of America® Customized Cash Rewards Credit Card: 3% Cash back for chosen home improvement and furnishing retailers like Home Depot and Williams-Sonoma.
- Bank Cash+® Visa Signature® Card: 5% Cash back on select furniture and electronic stores.
- Bank Shopper Cash Rewards™ Visa Signature® Card: 6% Cash back for selected retailers, including Home Depot, Ikea, and Ace Hardware.
2. Jewelry
Buying jewelry on credit can also be beneficial for building credit. Fine jewelry often represents a substantial purchase, allowing you to show that you can handle significant credit responsibly. Many jewelry stores offer installment payment plans or special promotions for credit card purchases.
Some famous jewelry stores that accept major credit cards include:
3. Travel
One of the best ways to build credit with a credit card is to use it for travel expenses such as flights, hotels, and car rentals. Additionally, using a credit card for travel expenses can provide extra benefits like travel insurance, cancellation coverage, and waived foreign transaction fees.
Pro Tip: Always make sure to pay off your travel expenses promptly to avoid accruing interest and to maximize the benefits.
Plenty of credit cards give you rewards points or cash back on travel purchases, which you can use for future trips. Some of these benefits include:
- American Express Blue Cash Preferred Card: 3% Cash back on transit services, including taxis, trains, tolls, and buses.
- Capital One SavorOne Cash Rewards Credit Card: 5% Cash back on hotels and rental cars.
- Citi Custom Cash Card: 4% Cash back on hotels and car rentals.
4 General Tips for Building Credit with a Credit Card
Building credit with a credit card requires careful planning and discipline. Here are four general tips to help you maximize your credit-building efforts.
- Make the most of your credit card rewards: Use your credit card perks wisely. Don’t fall into the trap of overspending just to rack up points. Stick to rewards that match your spending habits and goals, so you’re getting real value.
- Keep your balance in check: Try as much as possible to keep your credit utilization below 30% of your credit limit. This shows lenders you’re responsible and can give your credit score a nice boost.
- Monitor your credit regularly: Regularly check your credit report to stay on top of things and catch any errors or suspicious activity. Fixing mistakes early helps keep your credit score in good shape.
- Make timely payments: Always make at least the minimum payment by the due date. Better yet, pay off your full balance every month—it saves you from interest charges and builds a strong payment history.
Another effortless and smart way to build your credit is to use Cushion. By utilizing the virtual Cushion card for your bill payments and Buy Now Pay Later (BNPL), you can ensure every payment contributes to your credit score improvement. Cushion automatically tracks and reports your payments to credit bureaus, making it easier to maintain a positive credit history.
Summary
Using a credit card for everyday purchases—like groceries, appliances, or even travel—can be a smart way to build credit, as long as you manage it responsibly.
The key is knowing what to buy with your card, maintaining a low credit utilization, and always paying on time.
Do that, and you’ll see your credit score climb, along with the financial perks that come with it.
Plus, if you pick a card with rewards, you can score some extra benefits without overspending. 💸
