Saving Up for a Major Purchase? Integrate Credit Cards with Your Efforts

When used properly, credit cards can be tools as you save up for a major purchase.

I'm a big fan of using credit cards to save up for various purchases. I like the idea that my regular, planned spending could position me for greater savings down the road. As a result, I use credit cards for almost all of my spending — and reap the rewards in the form of free airfare and gift cards from my favorite restaurants.

Major purchases can be especially helpful as you create a financial plan. According to a recent survey from Capital One, 81% of parents are saving for a major purchase. From homes to cars to vacations, there is a good chance that you are preparing for some large purchase in the next year or two. Strategizing about the next major purchase to come your way makes sense, and you can integrate credit cards with your efforts.

You've Bought a Home: Now What?

One of the biggest financial milestones many of us reach is the home purchase. However, once you've completed that purchase, it can be difficult to figure out what to do next. Saving up for a down payment can take a lot out of you, and without that goal to move toward, you might be tempted to slowly let lifestyle inflation creep up on you. I already know that I'm going to face this decision again soon. Even though I had hoped never to buy a home again, I'm in a position where I might not have many viable alternatives.

So, as I look forward to what's coming next — and what will come after that — I find myself making new plans. I recently bought a new car, and I save up for vacations using my travel fund. But that doesn't mean credit cards aren't a part of my overall monthly spending and saving plan.

Just because you've completed your home purchase doesn't mean that you should give up your savings habits. In fact, it's a perfect time to stick with them, and start getting ready for the next big purchase. And, while you're at it, here are some tips for using credit cards to help you along:

• Continue to set aside money: Just because you've reached your milestone, it doesn't mean that you should stop setting aside money. Keep putting money in a high-yield account to maintain the habit.
• Make regular purchases with rewards credit cards: Use rewards credit cards to make regular, everyday purchases. You buy gas and groceries every week. You pay your utility bills once a month. Put all of these regular, budgeted purchases on credit cards so you rack up rewards that much faster.
• Pay off credit card balances each month: None of this works effectively if you don't pay off your credit card balances each month. You don't want to pay interest, so avoid carrying a balance. Only use your credit card to buy what you already have money for, and what you would have bought anyway.
• Use rewards programs that make sense for you: Choose rewards programs that make sense for you. I like travel rewards because I travel a lot. Others like cash back. Look at what makes sense for you.

Bottom line: Credit cards can be a tool

No matter where you're at in your financial journey, credit cards can be a tool to help you along. As long as you have a plan and you know your goals, a good rewards credit can make a big difference.