Which Bills You Should (and Shouldn’t) Put on Credit

in Saving Money on by
Young woman stresses over her monthly bills as she clutches credit cards in her right hand.

Using credit cards can be a controversial topic depending on who you ask, but there’s no denying their ability to provide both convenience and opportunities for financial rewards.

With sound judgment and thorough planning, you can actually pay use credit cards to pay off a lot of your bills and reap a host of hidden benefits in the process. Plus, if you’re someone that likes to diligently track your financial transactions, using your credit card for most purchases will automatically organize them all on one statement. You just have to be careful when using them to pay bills you can’t easily afford.

Before you decide to pay all your bills with a credit card next month, answer the questions in the checklist below to make sure it’s the right option for you:

Credit Card Bill Pay Checklist

1. Does your credit card offer rewards or benefits? Unless you absolutely need to use a credit card because you can’t afford to pay a bill up-front, it may not be worth the risk to use one unless you are getting some sort of deal for it. Check out this list for some of the top-rated reward credit cards in 2020.

2. Can you afford to pay this charge by the time your credit card bill is due? While emergencies may arise every now and again, they can’t always justify your card use. If you have to use a credit card because you can’t comfortably pay your bill, it might be smart to ask yourself whether it’s absolutely necessary, or just a luxury that could be cut for now.

3. Will you be charged an extra fee for paying this bill with a credit card? Fees have become less common with bills nowadays, but they might still arise with some like utility payments. If you must pay an extra one to three percent of your bill to pay with a credit card, it may better to use another form of payment.

4. Will this help or hurt your credit score? A credit score is one of the most important measures of your financial health. The higher your score, the better your chance to be approved for new loans or lines of credit. Paying bills late will bring down your score.

Pay These Bills with Credit

Subscriptions

Subscription services are surely among MVPs of 2020 as we continue to endure the COVID-19 pandemic. Services like Netflix, Instacart, and even more luxurious deals like monthly wine clubs are all perfect when it comes to paying with a credit card. Best of all, you can set up automatic payments for them online without being charged any extra fees.

Insurance

You’ll need to check with your providers, but these essential bills are often an excellent fit for credit card payments. They likely past the test in the way of affordability and can quickly be done online.

Childcare

This will depend on the type of childcare you’re paying for, but most large daycare centers should allow credit card payment. It’s another excellent way to earn rewards on regular and essential costs.

Cellphone, Internet, and Cable

Nearly all providers accommodate online payments via credit card. Just make sure you’re not selecting a plan that might otherwise be unaffordable to you without a credit card.

Do Not Pay These Bills with Credit

Rent

You can’t typically pay your rent directly with a credit card without being charged some kind of fee. Speak to your landlord or facility manager to confirm this, and always reach out to them first if you’re having trouble affording your monthly rent payment.

Taxes

While you technically can pay taxes with a credit card, you’ll almost always pay a fee for doing so, as with your housing costs.

A Large Purchase That Could Wipe Out Your Credit

it’s tempting to charge large purchases with a credit card to earn more rewards or a sign-up bonus. But when a large purchase sits unsettled on your credit report, you’ll not only be hit with interest — you’ll also wipe out your available credit limit, a significant factor used in determining your credit score.

Another Credit Card Bill

The quick answer here is always no. Typically, you cannot pay off one form of credit with another. In addition to it not being allowed by most credit card companies, it would just be an irresponsible financial decision and not follow our best-practices checklist.

The Bottom Line

Young woman crunches numbers as she figures out how to pay the next month's bills.

Be aware of any fees you’ll incur paying bills with a credit card, never charge anything you can’t afford to pay back, and always pay the full balance on time. Using credit cards with good judgment can help boost your credit score and earn you rewards.

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