Is it smart to pay your monthly expenses with a credit card? Mostly, yes. Being strategic with your credit card purchases can help you earn rewards and pay your bills on time, which keeps your credit score solid.
However, this method involves paying your credit card bills in full each month, which helps you avoid expensive interest fees and potentially racking up unwanted debt.
What you can charge
Most of your monthly bills can be paid with your credit card, however, some companies may charge you a fee. When you set up autopay, you’ll be able to see if there are any potential fees involved.
Cable, internet, phone bills
Phone, cable, internet and cell phone providers usually accept credit card payments each month without charging a fee. There are even credit card issuers (usually for small businesses) that may offer extra points as an incentive to tie your accounts to them.
If you’re one of the 33 million cord-cutters and don’t have cable TV, you most likely pay for Netflix, Hulu or an a la carte channel subscription like HBO from Amazon Prime. These companies typically allow you to pay your monthly bills with your credit card.
Pro tip: Use your dormant credit cards (i.e. the ones you keep in your drawer and never use) and tie it to one of these subscriptions to ensure the issuer won’t close your account. Credit cards that go unused for lengthy amounts of time may be closed at the issuer’s discretion.
If you have renters insurance and pay in advance for the year, you can also put this on your credit card. Some insurers have different policies for charging fees around using credit cards, so be sure to double check.
Just to give you an idea, Nationwide and Geico don’t charge fees as long as you pay the premium in full rather than in installments.
Utility bills (watch out for potential fees)
While you most likely have the option to use your credit card to pay for utility bills like electricity and gas, you may need to pay a fee. For example, PG&E in the San Francisco Bay Area charges a $1.35 convenience fee for bills up to $1,500.
Pro tip: It could make sense to use pay utilities with a credit card if you’ve just opened a new credit card and need to meet the spending threshold to get your bonus. Only do this if your utility bills are relatively high (i.e. $200 vs. $50) to offset the cost of the convenience fee.
You still have to pay
If you just can’t seem to pay your credit card bills on time each month, consider setting up autopay from your checking account to your credit cards.
While tying your bills to credit cards can help you earn points on expenses you’d be paying for anyway, it’s not a set-it-and-forget-it strategy. You should always have the cash in your checking account to cover your monthly credit card bills. Pay your credit card bills on time and in full each month.
Otherwise, you’d potentially end up paying late fees on your credit card, interest and rack up unwanted debt.
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