From racking up bonus points to building a credit score that’ll make all the ladies want you, paying for bills on a credit card just might do you some good. 😉💃
However, if you’re not careful, you could wind up in a pickle. 🥒 Before you enter your credit card number and submit that payment, read these top tips. 👇
Here’s Five Fast Facts on paying bills with a credit card:
- 💳 Charge It - If you want to put some bills on credit, most utility companies and cable and internet providers accept credit card payments. You can also use credit to pay for streaming services, cell phone bills, and medical bills. Some home and auto insurance companies accept credit as well.
- 🖐️ Not So Fast - What can’t you pay for with a credit card? Both rent and mortgage payments typically need to come from your bank account. The same goes for your car loan and any student loan payments. Although some third party services may allow you to pay these kinds of bills with plastic, expect to pay extra fees.
- ✅ A Few Pointers - Paying bills with a credit card does come with a few perks. If you’re using a rewards-based card, you’ll really rack up the points. It’s also a great way to build (or rebuild) your credit. If you don’t leave a lot of cash in your checking account, setting up automatic payments on credit could help you avoid those pesky overdraft fees.
- 📈 Extra Credit - Now, here come the cons. Depending on the bill, paying with credit could result in an extra processing fee. You’ll also jack up your credit utilization (AKA use more of your allotted credit amount), which could bite you in the butt. The amount you owe makes up between 20% and 30% of your overall credit score.
- 💰 Money Pit - Finally, if you’re not paying off your credit card balance each month, high interest charges put a hurtin’ on your finances. Some cards have interest rates around 30% today (major yikes). If you’re not careful, you could dig yourself a hole that’s tough to climb out of.
🔥Bottom line: If you’re strapped for cash, putting the occasional bill on credit could be a lifesaver. Just make sure you stay smart and pay off those balances ASAP. Looking for other ways to free up some moolah in your budget? This article will help you take much needed stock of all your subscriptions.
Do you use a credit card to pay bills?
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