Is It Possible To Pay Each Of Your Monthly Bills With A Credit Card?
Setting up your monthly fees, such as those for a gym membership or a streaming video service, to be automatically deducted from your credit card is one way to ensure that you never miss a payment and violate the terms of the agreement. You could also be able to earn reward points through this process, depending on the terms of your credit card.
The following is a list of some of the benefits and drawbacks of using a credit card to establish an automated payment plan for one’s monthly bills:
Advantages of paying your bills and utilities with a credit card One of the advantages of using a credit card to pay your bills and utilities is that it could help you save money.
- ‘Get reward points if your card supports that feature.’
- Never miss a monthly payment in any circumstance.
- If your energy supplier reports to the credit agencies, improving your credit score may be as simple as making regular payments on time for the services you use. This will show that you are responsible with managing your finances.
Among the possible dangers are:
Maintaining equilibrium
If you have your utility bills set up to be paid by credit card, it is essential to monitor your total balance and verify that you are paying the whole amount that is due on your credit card payment each month. Create a payment schedule in order to guarantee that you will have sufficient funds in your checking account to pay the bill for your credit card.
The prevailing interest rates
If you continue to carry a balance from one month to the next, the cost of your monthly payments will increase because you will be required to pay interest on the portion of the credit card balance that you were unable to pay off.
The expense of interest is not negligible, regardless of how low the annual percentage rate on the loan may be. This is because interest charges are added to your balance at the end of each day, and you will be charged interest on the interest that was added the day before. Additionally, you will be charged interest on the interest that was added the day before that. In other words, the interest on past-due balances on credit cards is compounded daily, which means that your debt can continue to grow even when you are not making purchases with the card.
Charges levied by various service providers
There are some electric and gas suppliers who may charge you an additional fee if you pay for your bill with a credit card. This is not the case in all states, but it does happen in some.
Should I put my expenses on my credit card instead of using cash?
You may make the most of your available credit by setting up automated payments to be made with your credit card. This not only ensures that your monthly bills are paid on time, but it also gives you the opportunity to earn reward points.
However, in order for this to work in your favor in the long run, you need to make sure that you pay off the entirety of your credit card payment at the end of each month. Set up automatic payments if that is an option for you so that you can stay current with payments each month, and monitor your balance regularly to ensure that it does not grow to an amount that is greater than what you are able to pay off.
