The Ultimate Guide to Credit Cards
Thursday, December 12, 2019

15 Best Credit Cards for Small Purchases in 2019

15 Best Credit Cards for Small Purchases in 2019

credit card advice

Brittney Mayer
By: Brittney Mayer
Updated: June 28, 2019

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While chasing signup bonuses and big rewards are tried-and-true strategies for scoring headline-worthy redemptions, most of us rely on the small, everyday purchases to accrue our piles of points and miles. Thankfully, with one of the best credit cards for small purchases in your wallet, that accrual doesn’t have to be slow.

Maximizing rewards on your small purchases — as with any type of purchase — will often mean choosing a card that offers bonus rewards for your common spending categories. For example, if most of your small purchases consist of your daily coffee or a snack from the convenience store, choose a card that rewards dining or gas station purchases, respectively.

On the other hand, if your small purchases are more varied — or less common — then your best bet might be a good flat-rate rewards card. Either way, choosing the best card for each purchase will help ensure even the smallest transactions help you earn.

Overall | No Annual Fee | Flat-Rate Rewards | Dining & Coffee Shops
Gas & Convenience Stores | Student | Business | FAQs

Overall Top Cards for Small Purchases

Finding the perfect card — or combination of cards — to maximize your rewards is a personal journey; every consumer has different spending habits and expenses that means no card will be perfect for every user. And this applies just as much to the small purchases as it does the medium or large ones.

However, some cards do stand out as being a good fit for a wide range of potential cardholders, making them a solid place to start the card search. Our top picks here all offer good value at their most basic, with the potential for even more value depending on how you use your card and redeem your rewards.

  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
17.49% - 24.49% Variable
$95
Good/Excellent

Not only does this card offer a lot of value for dining and travel purchases with its 2X points per dollar, but even its basic non-category rewards — 1X Ultimate Rewards® points per dollar — can potentially out-value the competition. That’s because you can transfer Ultimate Rewards® to a number of hotel and airline loyalty programs, which may unlock a value of 2¢ per point or more.

BEST OVERALL RATING

★★★★★
5.0

OVERALL RATING

5.0/5.0
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 - 25.24%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5
  • No annual fee
  • No minimum to redeem for cash back
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases 15 months
0% Intro APR on Balance Transfers 15 months
16.49% - 25.24% Variable
$0
Good/Excellent

A good unlimited card is often a key part of any strategy to maximize rewards, as it can offer a higher rewards rate on non-bonus purchases, including those small purchases here and there that simply don’t conform to a bonus category. Even better, this card’s cash back rewards can be turned into higher-value points when you also hold an Ultimate Rewards® card such as the Chase Sapphire Preferred® Card above or its sibling, the Chase Sapphire Reserve®.

CITI® RATING

★★★★★
4.6

OVERALL RATING

0.0/5.0
  • Earn 15,000 bonus points after you spend $1,000 on  net new purchases with your card in the first 3 months of account opening
  • Enjoy 0% Intro APR on purchases and balance transfers for 15 months; balance transfers must be made within 4 months of account opening
  • Points are redeemable for gift cards to popular retailers, restaurants, and department and home stores. 2,500 ThankYou® Points can be redeemed for a $25 gift card at thankyou.com
  • Earn 2X Points at Supermarkets and Gas Stations
  • Earn 1X Points on all other purchases
  • Round-up to the nearest 10X points on every purchase
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
15.74% - 25.74% (Variable)
$0
Good/Excellent

This card was tailor-made for small purchases with its unique round-up feature that rounds up the rewards you earn on every purchase to the nearest 10X points. That basically means you always earn a minimum of 10 ThankYou® points on every new purchase, no matter how small that purchase may be. Points can be redeemed for a range of products, but the best value is typically found by transferring points to Citi’s partner loyalty programs.

Top “No Annual Fee” Cards for Small Purchases

Credit card annual fees can be a bit of a mixed bag. On the one hand, some cards that charge fees are able to offer high rewards rates and extra cardholder benefits that more than make up for the annual fee. On the other hand, if you don’t want to waste time (or money) making sure you eke out your value, then annual fees can be a real pain.

Thankfully, the days of needing to pay a big annual fee for a competitive rewards card are long gone. You can find a wide range of options, from bonus category cards to flat-rate unlimited cards, making it simple to maximize rewards without maximizing fees.

BEST OVERALL RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Earn a one-time $150 cash bonus after you spend $500 on purchases within the first 3 months from account opening
  • Earn unlimited 3% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
  • No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
  • 0% intro APR on purchases for 15 months; 15.74% - 25.74% variable APR after that
  • 0% intro APR on balance transfers for 15 months; 15.74% - 25.74% variable APR after that; 3% fee on the amounts transferred within the first 15 months
  • No foreign transaction fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
15.74% - 25.74% (Variable)
$0
Excellent, Good

This card has a number of small purchase categories covered, offering unlimited 3% cash back on dining and entertainment purchases, 2% back at grocery stores, and 1% back on everything else. Additionally, the card’s signup bonus has a reasonable spending requirement and new cardholders also enjoy an introductory 0% APR offer on new purchases and balance transfers.

CITI® RATING

★★★★★
4.6

OVERALL RATING

0.0/5.0
  • Earn 15,000 bonus points after you spend $1,000 on  net new purchases with your card in the first 3 months of account opening
  • Enjoy 0% Intro APR on purchases and balance transfers for 15 months; balance transfers must be made within 4 months of account opening
  • Points are redeemable for gift cards to popular retailers, restaurants, and department and home stores. 2,500 ThankYou® Points can be redeemed for a $25 gift card at thankyou.com
  • Earn 2X Points at Supermarkets and Gas Stations
  • Earn 1X Points on all other purchases
  • Round-up to the nearest 10X points on every purchase
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 15 months
0% for 15 months
15.74% - 25.74% (Variable)
$0
Good/Excellent

This may be the only card on the market that deliberately maximizes small purchases thanks to its round-up rewards. Basically, the rewards you earn on every purchase will be rounded up to the nearest 10X points, turning that $1 snack into 10 ThankYou® Points. New cardholders can also earn a decent signup bonus, and the card never charges an annual fee.

Honorable Mentions: The current credit card market is full to bursting with good rewards cards that won’t charge an annual fee. The U.S. Bank Cash+ TM Visa Signature® Card and Bank of America® Cash Rewards are nice if you want to choose your own bonus categories, while the Wells Fargo Propel American Express® Card covers many small purchases with its travel and dining categories. Most flat-rate cards are also no-fee, including the Citi® Double Cash Card with unlimited 2% cash back on every purchase.

Top “Flat-Rate Rewards” Cards for Small Purchases

Although many of our small, everyday purchases will likely fall into common categories — like that morning coffee, which counts as a dining purchase — some of those small purchases won’t actually fall into any popular bonus categories; unfortunately, few (read: no) cards offer bonus rewards for dollar store purchases.

That’s where a flat-rate rewards card shines. While all rewards cards have some sort of flat rate they charge on non-bonus purchases, these unlimited flat-rate cards don’t have bonus categories. Instead, they offer the rate on every purchase, with no limits, usually at a higher rate than other cards offer for non-bonus purchases.

BEST OVERALL RATING

★★★★★
5.0

OVERALL RATING

5.0/5.0
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49 - 25.24%.
  • 3% intro balance transfer fee when you transfer a balance during the first 60 days your account is open, with a minimum of $5
  • No annual fee
  • No minimum to redeem for cash back
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases 15 months
0% Intro APR on Balance Transfers 15 months
16.49% - 25.24% Variable
$0
Good/Excellent

An epitomic flat-rate rewards card, this option provides an unlimited 1.5% cash back on every card purchase, everywhere. But, while 1.5% cash back is not hard to find, this card does have a little something extra — if you happen to own a card with Ultimate Rewards® points, like the Ink Business Preferred℠ Credit Card, Chase Sapphire Reserve®, or the Chase Sapphire Preferred® Card. These cardholders can turn their cash back into points, significantly increasing the value.

CITI® RATING

★★★★★
4.8

OVERALL RATING

0.0/5.0
  • Earn cash back twice on every purchase with unlimited 1% cash back when you buy, plus an additional 1% cash back as you pay for those purchases.
  • Receive 0% for 18 months on balance transfers made within 4 months of account opening
  • Balance Transfers do not earn cash back; transfer fee applies
  • If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month
  • No categories to track and no caps on cash back
  • No annual fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
0% for 18 months
15.74% - 25.74% (variable)
$0
Excellent/Good

This card is one of the few unlimited options that provide more than 1.5% cash back — and it does so in a unique way. Cardholders will earn 1% cash back when they make their purchases, then they’ll earn an additional 1% cash back when they pay off those purchases, for a total of 2% cash back on every card purchase. This card doesn’t have a signup bonus, which definitely impacts its overall value, but it has good long-term potential.

Honorable Mentions: No matter what bank you like, they probably have an unlimited 1.5% cash back card offering. However, besides the Citi card above, getting more than 1.5% from a flat-rate card will require reading the fine print.

For example, the Alliant Visa® is a popular card thanks to 3% cash back the first year and 2.5% after that, but Alliant is a credit union (so you’ll need to become a member) and the card has a $99 annual fee. Similarly, the Fidelity® Rewards Visa Signature® Card offers unlimited 2% on every purchase, but you’ll need to redeem into a Fidelity account for full value.

Top Cards for Small “Dining & Coffee Shop” Purchases

For most folks, the small purchases they make most often will involve a restaurant, fast food chain, or coffee shop of some sort. This works out well for maximizing small purchase rewards, as many credit cards offer bonus rewards for dining purchases.

Additionally, most of us spend enough on dining purchases in general that having a card with good dining rewards is a smart idea for transactions of every size. Plus, many cards that offer bonus rewards on restaurant purchases also offer additional bonus categories, making it easy to cover multiple types of small purchases with a single card.

BEST OVERALL RATING

★★★★★
4.8

OVERALL RATING

4.8/5.0
  • Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
  • Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through May 2020.
  • No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
  • No foreign transaction fees
  • Capital One cardholders get access to premium experiences in dining, entertainment and more
  • $0 intro annual fee for the first year, $95 after that
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
16.24% - 25.24% (Variable)
$0 intro for first year; $95 after that
Excellent, Good

A good contender for an everyday card, this pick offers an unlimited 4% cash back on dining purchases, including restaurants and cafes. Users also get 4% back on entertainment purchases and 2% back at grocery stores, categories that cover a lot of common small purchases. Cardholders will need to pay an annual fee, but the fee is waived the first year, and the signup bonus is very competitive.

If you want a way to earn dining rewards without an annual fee, this card may be a good pick. Users earn 3X points per dollar on all kinds of dining purchases, as well as 3X points on travel purchases — including gas stations — to cover your small purchases coming and going.

  • Receive 0% APR on new purchases and balance transfers for 12 months
  • Earn 3x points on eating out and ordering in, gas, and travel
  • Pay $0 annual fee

Top it all off with a nice signup bonus and introductory APR offer, and this card has a lot to consider.

(The information related to Wells Fargo Propel American Express® Card has been collected by CardRates.com and has not been reviewed or provided by the issuer or provider of this product or service.)

Honorable Mentions: Dining is a popular bonus category, and most issuers have at least one or two cards with bonus dining rewards. The revamped Citi Prestige® has the highest bonus category rate at 5X points per dollar, with the Amex Gold in second at 4X points per dollar, but both carry large annual fees. The Chase Sapphire Reserve® and Chase Sapphire Preferred® Card are popular for travel and dining, and the Capital One® SavorOne® Cash Rewards Credit Card is a good no-fee option.

Top Cards for Small “Gas & Convenience Store” Purchases

Gas stations and convenience stores have been a staple of everyday life for decades and are a prime location for small purchases. That quick stop at the convenience store or top-up at the gas pump may hardly seem worth pulling out your credit card, but every energy drink you grab to get you through your day can also get you a few points closer to your next redemption.

Many credit cards will offer gas station purchases as a bonus category, often in addition to another everyday category like dining or groceries. This means your go-to card for small gas station and convenience store purchases may well end up being your favorite everyday card, too.

10. Wells Fargo Propel American Express® Card

Despite charging no annual fee, this card offers a lot of earning opportunity thanks to having multiple broad bonus rewards categories, including a travel category that applies to gas station purchases on top of the standards like airfare and hotel stays. Plus, earn triple points on dining purchases and select streaming services.

  • Receive 0% APR on new purchases and balance transfers for 12 months
  • Earn 3x points on eating out and ordering in, gas, and travel
  • Pay $0 annual fee

What makes this card even more impressive is the fact that cardholders can earn big rewards in multiple categories — all without an annual fee. And there’s a competitive signup bonus, as well as an introductory 0% APR offer.

(The information related to Wells Fargo Propel American Express® Card has been collected by CardRates.com and has not been reviewed or provided by the issuer or provider of this product or service.)

11. Citi Premier Card

The Citi Premier Card is a solid mid-range card that offers rewards in two 3X-point categories into which many small purchases fall: entertainment and travel. And, unlike many travel cards, this card’s  bonus category includes gas station purchases.

Citi Premier Card

      • Earn 3X points per $1 spent on eligible travel purchases, including gas stations
      • Earn 2X points per $1 spent on dining out and entertainment
      • Pay $0 annual fee the first year, then $95

This card earns Citi’s ThankYou® Points, which cardholders can use for cash back, booking travel through Citi, or by transferring them to one of Citi’s loyalty program transfer partners. As with most transferable miles, the best per-point value is typically found in smart transfer redemptions.

Honorable Mentions: With so many gas rewards cards from which to choose, the secondary rewards categories become more important. The Amex EveryDay® Preferred Credit Card and Amex Blue Cash Preferred® Card offer both gas and grocery rewards, while the Bank of America® Cash Rewards Credit Card and U.S. Bank Cash+ Visa Signature® Card give users the choice of a secondary category in addition to gas rewards.

Top “Student” Cards for Small Purchases

Beyond the usual expenses of housing and car-related costs, it’s probably fair to say that most of your purchases as a college student will be small purchases, so finding a good card for those little buys can be a big deal. Student credit cards are one of the few financial upsides to being a student, and many student cards offer competitive rewards.

As with any type of credit card rewards, you’ll get the best value by choosing a card that complements your spending habits. If your main expenses revolve around food, for example, go with a card that rewards dining purchases. Students who really want to maximize their rewards should do a little rewards math before picking a card.

Discover it® Student chrome Review

at Discover Card'ssecure website

STUDENT RATING

★★★★★
4.8

OVERALL RATING

4.0/5.0
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases - automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% for 6 months
10.99% for 6 months
19.49% Variable
$0
Fair/New to Credit

This card is a solid pick for small dining or gas station purchases, as cardholders earn 2% cash back on up to $1,000 in combined category purchases each quarter. Additionally, Discover’s Cash Back Match means the rewards earned in the first year are automatically doubled. Not bad for a card with no annual fee.

13. Citi Rewards+ Student Card

As with the non-student version of this card, the Citi Rewards+ Student Card is ideally designed for small purchases thanks to its unique rewards program that rounds up the rewards earned on any purchase to the nearest 10X points. This means that $2 taco can earn 10 ThankYou® Points.

Citi Rewards+? Student Card

      • Earn 2X ThankYou® Points per $1 spent on supermarket and gas station purchases
      • Round up each transaction to nearest 10X points
      • Pay $0 annual fee

The base rewards for this card also work in favor of small purchases, offering 2X points per dollar for grocery store and gas station purchases — and that’s before you round up. New cardholders can also earn a nice little signup bonus and enjoy an introductory APR offer.

Honorable Mentions: Most student credit cards will come with some form of rewards, so choose the card that best suits your spending. The Discover it® Student Cash Back has a lot of value for users who can maximize the rotating rewards, or check out the Bank of America® Cash Rewards for Students to choose your own 3% bonus category. If flat-rate rewards sound better, the Bank of America® Travel Rewards for Students or the Journey® Student Rewards from Capital One® could be worth a look.

Top “Business” Cards for Small Purchases

Although the sub-$10 small purchases common for consumers are likely less common for your average business, that doesn’t eliminate them entirely. And, for freelancers and other small businesses, the frequency of small purchases is likely much higher.

Either way, if those small purchases occur at the same places your business typically shops, you can use your favorite business rewards card and call it a day. If, as is more likely the case, those purchases are made at diverse merchants, then a flat-rate rewards card is probably the better option for your company’s small purchases.

BUSINESS CARD RATING

★★★★★
4.7

OVERALL RATING

4.6/5.0
  • Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening
  • Earn unlimited 1.5% cash back on every purchase made for your business
  • 0% introductory APR for 12 months on purchases
  • Employee cards at no additional cost
  • No Annual Fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases 12 months
N/A 12 months
14.74% - 20.74% Variable
$0
Good/Excellent

This is a solid flat-rate card that offers the same 1.5% cash back on every purchase, from any merchant category, making it good for non-bonus purchases. The card has no annual fee, which makes it free to carry even if your small purchases are sporadic. Cardholders who also hold a Chase Ultimate Rewards® card — such as the Ink Business Preferred℠ Credit Card, Chase Sapphire Reserve®, or the Chase Sapphire Preferred® Card — can turn their cash back into points for even more value.

15. Blue Business Plus Credit Card from American Express

The Blue Business Plus Credit Card from American Express is a flat-rate points card that gives you the same 2X Membership Rewards® points per dollar on every purchase, no matter how small.

Blue Business Plus Credit Card from American Express

      • Earn 2X Membership Rewards® points per $1 on the first $50,000 in purchases each year
      • Earn unlimited 1X points per $1 thereafter
      • Pay $0 annual fee

Those points have a lot of potential value, too. Membership Rewards® can be redeemed for cash, merchandise, or travel, but it’s the ability to transfer the points to more than 20 hotel and airline loyalty programs that offers the most per-point value potential.

Honorable Mentions: You can find a lot of great business credit cards, making it easy to maximize rewards. The Ink Business Cash℠ Credit Card, for instance, is good for small dining or office supply purchases, while the Ink Business Preferred℠ Credit Card has your small travel and shipping purchases covered. And check out the Capital One® Spark® Cash for Business and the no-fee Capital One® Spark® Cash Select for Business for flat-rate rewards.

Is It Better to Use a Credit Card or Debit Card?

For many young people, getting that first debit card from the bank is their first real experience with the power of plastic payments. Suddenly, the cash-less convenience of payment cards makes purchasing feel like a brand new experience.

Later, when we come of age, we start to wonder if we should abandon that old debit card in favor of the credit cards we can now obtain.

The answer: Yes.

While debit cards can be good tools for learning how to manage money and use digital payment responsibly, credit cards offer a number of features that simply make them a better — and safer — way to pay for most purchases.

To start, the vast majority of credit card issuers offer $0 fraud protection, which means you have zero liability to repay unauthorized charges, giving you absolute peace of mind that a stolen credit card won’t cost you a fortune. Even cards from issuers that don’t offer $0 liability won’t cost you much; the law caps your liability for unauthorized credit card purchases at just $50 if your physical card is used and $0 if the fraudster stole your digital card data.

Debit cards, on the other hand, have a very different liability structure. While digital theft — i.e., your debit card number was stolen, but you still have the physical card — has the same $0 liability as credit cards, if your physical card is lost or stolen, your liability will depend on when you report the card lost or stolen.

Basically, if your physical card goes missing, you must report the card as lost or stolen before any unauthorized charges are made to have no liability. If you wait any longer, your liability starts to go up:

Debit Card Loss or Theft Liability

Not only can a thief potentially drain your debit card account, but your debit card may also give a fraudster access to any other linked bank accounts. And if you don’t catch the fraud early enough, anything stolen could be gone for good.

The difference in the level of fraud liability between credit and debit cards makes credit cards generally safer to use for online shopping, particularly cards that allow you to use virtual credit card numbers for your online purchases. And fraud protection isn’t the only purchase protection benefit you can get from your credit cards.

In fact, most credit card issuers and networks provide a range of cardholder benefits that can be quite valuable. For example, many cards offer extended warranty protection that can add to the manufacturer’s warranty for a product, eliminating the need to buy a pricey protection plan from the store.

Some common cardholder benefits include:

      • Extended warranty protection
      • Rental car insurance
      • Return protection
      • Trip cancellation/delay coverage
      • Cellphone insurance
      • Price protection
      • Emergency travel assistance

And, of course, we have yet to touch on the credit card rewards you can earn. Many, many credit cards offer some form of purchase rewards, whether it’s cash back, points, or miles. Even cardholders with less-than-perfect credit can find rewards cards that help them earn on every purchase.

That’s not to say you can’t find a few debit cards that offer purchase rewards — because you can — but those rewards are likely to be very meager compared to what’s possible with good credit and the right credit cards. And those potential credit card rewards increase significantly when you start to talk about signup bonuses, most of which can easily be worth hundreds, if not thousands, of dollars.

As if all of the above weren’t enough reason to use your credit cards instead of that old debit card, here’s one more — arguably the most significant: debit cards don’t build credit. That’s right, while your debit card acts a lot like a credit card when it comes to making purchases, you can’t actually establish or build credit history with a debit card.

Credit cards, however, can be an excellent way to establish your consumer credit profile and start building credit history. Or, in the case of rebuilding, credit cards can be good ways to build a recent positive payment history to help boost a flagging credit score.

Graphic of Accounts Not Likely to Build Credit

Of course, the other side of this is that credit cards can, when used irresponsibly, also harm your credit. Late credit card payments, maxed-out card balances, or other poor credit habits can cause your credit score to decrease. With a debit card, you may be stuck with an overdraft fee if you don’t have funds, but your credit won’t be impacted.

But this may not always be the case. More and more scoring agencies and lenders are investigating using alternative data — including bank account history and bill payments — as a way to augment consumer credit reports. For example, you can now opt-in for an UltraFICO Score that gives you a score based on your banking history, with higher scores going to consumers without overdrafts or other negatives.

Can Small Card Purchases Still Build Credit?

One of the most common excuses we tend to give ourselves for not doing something is that one small thing can hardly make a difference. For example, many folks will say they don’t vote because, “What’s one vote going to do?”

In reality, however, a single vote can make a difference. Along that same line, even small credit card purchases can make a difference — both to your credit-building journey as well as your rewards earnings.

That’s because it doesn’t matter how much you spend on your credit cards — all that matters is that you spend. So long as you use your credit card and make at least the minimum required payment before the due date, your issuer will report your payment history to the credit bureaus.

For example, suppose an imaginary cardholder, named Carla, uses her credit card to buy a $1 pack of gum — and that’s it for the whole billing period. If Carla pays off that $1 balance before the due date, Carla’s issuer will report her positive payment history to the credit bureaus. What’s more, if Carla used a rewards card for the purchase, she’ll also earn rewards on that $1 purchase.

Are There Purchases You Shouldn’t Put on a Credit Card?

When used responsibly — i.e., when paid in full and on time every single billing cycle — credit cards can be an ideal purchasing method for just about anything. At the same time, there are a few occasions when your credit card may not actually be the best payment method.

For one thing, not everyone can use a credit card responsibly. If you have trouble tracking your purchases or paying on time when you use credit, you may be better off with cash.

Even if you always use your cards responsibly, some purchases simply shouldn’t be made with a card due to the extra costs involved. For instance, some companies will charge an extra “convenience fee” to pay by card if credit cards aren’t the standard payment method (utility companies are notorious for this fee).

States Prohibiting Credit Card Surcharges

Similarly, some merchants will provide a discount for paying with cash or actually add a surcharge for paying with a credit card — though the latter is downright illegal in a number of states. In cases where paying by card is the more expensive option, it’s worth crunching the numbers to see if the potential purchase rewards are worth any fees or surcharges.

Additionally, any purchases that involve what is typically termed as a cash equivalent shouldn’t be made with a credit card due to the fact that they often process as cash advances.

Although the typical credit card cash advance involves using your credit card to get cash from an ATM, any transaction that involves a product that essentially acts like cash may be considered a cash advance by your credit card issuer (though, of course, specific definitions may vary by card and issuer).

These transactions typically involve items that can be easily converted to cash, such as:

      • Money orders
      • Lottery tickets
      • Gift cards
      • Foreign currency
      • Casino or gambling chips
      • Traveler’s cheques
      • Funding a bank or shopping account

Any transaction processed as a cash advance will come with extra costs, starting with the cash advance fee charged by most credit cards. The cash advance fee is usually a flat percentage of the transaction amount, with 3% to 5% being common.

In addition to the fee, cash advances are generally charged higher interest rates than other transaction types. Additionally, the grace period that allows you to avoid interest fees on new purchases won’t apply to cash advance transactions, so the interest will start accruing as soon as the transaction posts.

The only real way to avoid the extra fees for cash advances — other than, well, avoiding cash advances — is to use a card that doesn’t charge the fee. While it’s rare (if not impossible) to find a card from a major bank that doesn’t charge a cash advance fee, your local credit union may offer cards without extra transaction fees.

No Purchase Too Small for the Right Card

As is often the case, it’s the flashy signup bonuses and big rewards that make headlines and blog posts. But, for the average cardholder, it’s the culmination of many small purchases that results in the rewards they earn.

And that’s OK. You don’t actually need to spend thousands of dollars a month on your credit card to get good value out of both your rewards and any other cardholder benefits to which you’re entitled.

No matter how much you spend, the principles of smart credit card use remain the same. Maximize your rewards by choosing cards that complement your spending habits, and always, always, always pay your credit cards on time (and, ideally, in full).