According to a 2014 Gallup poll, Americans have an average of 2.6 credit cards, and at least 71 percent of the population has at least one. Having a credit card can be beneficial for emergencies, traveling, or simply handling unexpected bills between paychecks.
Find out how using a credit card to pay monthly bills can also be a smart and convenient financial move.
Advantages of Paying Bills With Your Credit Card
Paying your monthly recurring bills with a credit card can have a number of benefits, including:
Convenience: You can sign up to pay your bills automatically each month using your credit card. Rather than paying by phone, logging into multiple websites to pay online or mailing in checks, paying by credit card can save time and hassle.
Ease of Tracking: Some people find that making a single credit card payment rather than several individual bill payments each month is easier for them to track and manage.
Credit Card Rewards: If you have a rewards credit card, you can accrue additional rewards, such as travel points, cash back, or merchant rewards by paying your monthly bills with your card.
Bills That You Can Pay With a Credit Card
Your credit card should be suitable for just about any monthly recurring bill that fits within your credit limit. Examples of bills you might want to pay include those for:
- childcare costs
- water and electricity
- car and health insurance
- Internet, cable television and cellphones
Bills You Should Not Pay With a Credit Card
According to the Las Vegas Review Journal, some bills should not be paid using your credit card, usually because you’re likely to incur greater fees or interest by doing so. Among those bills are:
- medical bills
- college tuition
- federal or state taxes
- down payments for home or car loans
Best Credit Cards for Paying Bills
While almost every credit card can be used to pay bills, you could benefit most by using a credit card that offers an incentive for spending. Rewards could include travel points, hotel points for overnight stays, cash back or merchant rewards for discounts and vouchers. Choose the credit card that can bring you the greatest number of benefits for your lifestyle, and don’t be afraid to shop around until you’ve found a suitable option.
Things to Consider if You Pay Bills With a Credit Card
Keep in mind the following important considerations when deciding whether or not to pay any bills with your credit card:
- First and foremost, try to pay your credit card balance in full each month. If you carry a balance from month to month, you’ll pay interest that won’t likely be offset by any rewards or convenience.
- Know your credit limit so that you can avoid going over it and risking increased interest rates or a negative impact to your credit score.
- Check to see if a biller charges a convenience fee for paying with a credit card and avoid using credit for that bill. Also, be aware of which companies don’t accept credit card payments.
Visit usbank.com for more information about credit cards.