How to Tip With A Credit Card

Tipping with a credit card is a common convenience. This guide breaks down the simple process, ensuring you can show your appreciation accurately and securely with every swipe or tap.

1. Review the Bill & Calculate Tip: First, check your itemized bill for accuracy and to see if a gratuity is already included. Then, calculate your desired tip, typically 15-20% of the pre-tax total.
2. Select the Best Card: Using the right credit card can earn you extra rewards on purchases like dining. To find a card that maximizes your benefits, you can use the Kudos Explore Cards tool.
3. Fill Out the Receipt: On the merchant's copy, clearly write the tip amount on the designated line. Add this to the subtotal and write the final amount in the "Total" field before signing it.
4. Keep Your Copy: Always take your copy of the receipt. It’s your record of the transaction and is useful for tracking expenses or disputing any incorrect charges on your credit card statement.

Impact On Your Credit Score

While adding a tip to your credit card bill doesn't directly impact your credit score, it can have indirect effects on your overall credit health. Here are a few key factors to consider:

• Credit Utilization. Adding a tip increases your total balance, which can slightly raise your credit utilization ratio. Keeping this ratio low is crucial for maintaining a healthy credit score.
• Reaching Your Limit. Frequent or large tips can push your balance closer to your credit limit. Maxing out your credit card can negatively impact your score and signal financial strain to lenders.
• Payment Difficulties. A higher balance due to tips might make it harder to pay your bill in full and on time. Late payments are one of the most significant factors that can lower your credit score.

Alternative Ways To Tip

Cash Gratuity

For those who prefer not to use a credit card for gratuity, a cash tip remains a direct and universally accepted alternative. This method ensures the recipient receives the full amount immediately, bypassing any potential credit card processing delays or fees. It offers a simple, tangible way to show appreciation for service without needing to navigate digital payment options or applications.

Customizing Tip Preferences

Many platforms allow for the adjustment of tipping settings to better suit your preferences. Within an application or service's settings menu, you can often establish a default tip percentage that will automatically apply to future transactions. This streamlines the payment process and removes the need to calculate a tip for each individual service, offering a convenient set-it-and-forget-it approach.

Choose the Right Card to Tip

With over 3,000 credit cards available in the U.S., finding the one that truly fits your spending habits and financial goals can feel overwhelming. Kudos cuts through the noise with a personalized, people-first approach, helping you find your credit card match without the usual pressure or confusion.

If you want to maximize your credit card benefits, Kudos is the ultimate free shopping assistant for your online purchases. Plus, we're currently giving you $20 back after your first qualifying transaction—just sign-up for free with code 'GET20' and make a purchase at a Boost merchant.

Frequently Asked Questions

Is it better to tip with cash or a credit card?

Cash tips often go directly to your server immediately, while credit card tips might have processing delays.

How do I add a tip on a credit card machine?

The payment terminal will prompt you to select a suggested tip percentage or enter a custom amount before completing the transaction.

Do servers receive the full tip from credit card payments?

Usually, yes, but some businesses may deduct a small percentage to cover credit card processing fees.