Paying Bills Using Credit Cards Rewards and Benefits
Paying your bills with a credit card can be highly rewarding
If used correctly, paying bills using credit cards can not only help you manage your finances more efficiently, it can also earn you cash and rescue you in times of trouble. Many people today use their credit cards to earn credit card rewards while paying their bills. Indeed, paying bills using credit cards can introduce you to a whole new form of financial security. But much depends on how you use the cards and how disciplined you are in managing your personal financial affairs.
Paying on time
Most of the credit card perks and benefits you receive when you pay bills with a credit card are dependent on paying your bill in full when it is due. Allowing interest to accumulate on the card wipes out most, if not all, of the benefits you gain by paying bills with a credit card on time. The only exception occurs when you urgently need a short-term loan to pay an unexpected major bill, such as car repairs or a health emergency. In this case, paying a bill using a credit card can be a safety net. Be aware, however, that the interest on the loan will be high. This will remove many of the other benefits of that credit card. It is important to be able to balance the use of credit lines.
monitor spending more efficiently Benefits of paying bills using credit cards
It is also important that when you pay bills with a credit card, you monitor your spending continually. Access to your account over the Internet helps considerably in this regard. You should be aware continually what the balances on your cards are.
Earn Credit Card Rewards and Improve Credit by Paying Bills Using Credit Cards
Here is a look at eight ways in which paying bills using credit cards can help in managing your finances.
1) Paying bills using credit cards help you budget better
Depending on how close your account is to the closing date, you can have up to six weeks to pay for the expenses you place on your credit card today. This interest-free grace period gains you considerable budgeting benefits. You will know some 20 days ahead of time just how much money you will need to have in your checking account to pay your credit card bill.
Also, if you wish to dispute any bills you have time to do so.
An additional benefit is that you can set limits on your spending to help you budget. Say you want to spend no more than $500 a month on groceries. You can track your spending until it reaches $495. This ensures you buy no more groceries until the next credit card cycle kicks in.
2) You can build up your credit score
Paying your credit card bill on time every month will help considerably in building a high credit score. If you are new to credit paying your bills with a credit card can help you build your credit score when you have no credit history. A high credit rating will not only enable you to borrow large amounts of money, such as a mortgage or car payment, but it will also be of assistance in obtaining additional credit cards with benefits that are different from the ones you already have.
3) You can pay off your credit card bills using automatic bill payment
Even if you are highly disciplined in paying your bills on time every month, it is an added asset to use the automatic bill payment option that most credit card issuers offer. Doing so means that you can be sure that your bill will be paid in full on time every month. You will incur no late payment penalties, no interest charges and no dings to your credit rating.
Of course, you need to be sure that you have sufficient money in the bank account from which the automatic bill payment will be made. You can even pay your credit card bill twice in a billing cycle.
4) You can earn credit card rewards just for paying your bills
Paying a bill using a credit card can be highly rewarding. Rewards in the form of cash, airline miles, gifts or hotel stays are among the best reasons to pay bills with a credit card. Most cards today offer you at least 1 percent cash back for paying a bill using a credit card — every time you do so.
Also, many cards offer you up to 6 percent cash back for items you are going to buy anyway, such as groceries, gas, and meals at restaurants. They usually include a maximum amount of rewards that you can receive within a set period, but you can boost your benefits by obtaining additional cards.
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Use different rewards credit cards to maximize the benefits of paying bills using credit cards and quickly earn credit card rewards
A set of cards that offer rewards that are different from each other is a good way to go. Some cards offer rewards in rotating categories, so you can earn, say, 5 percent on groceries over three months. Another card might offer 5 percent on groceries in a different three-month period.
Other cards offer a set amount, such as 3 percent on gas or for travel, always. The Discover it® Card is an excellent example of this type of rewards credit card.
If the card charges an annual fee, weigh it up against the reward points you are likely to receive. Decide whether you will gain enough reward points to pay the fee and still come out ahead.
Strict discipline is required. Consider a new credit card if your current card offers little to earn credit card rewards. You need to use the right card for the right purchases. You need to avoid using a card for things you do not need just to earn credit card rewards. And you need to pay off your credit card bill each month in full.
5) Additional protection
Paying bills using credit cards everyday can provide additional benefits. Purchase protection, compensation for lost luggage or delayed flights and other travel benefits are available. Some card issuers even offer to check for lower prices than those you paid.
Among the benefits of paying bills using credit cards is car rental insurance coverage. This can be expensive when paid to the rental company, but which is offered free with many cards. If you rent cars often, you might want to consider obtaining a card that provides that benefit if you do not already have one.
Check the fine print in your credit card paperwork to find those benefits that suit your lifestyle and spending best. Understand the standard levels of credit card consumer protection.
6) Most places accept credit cards
Paying a bill using a credit card is widely accepted today. You can pay bills with a credit card to the company at which you have your house or car insurance, for example. Paying bills using credit cards is possible for utilities, cell phones, internet services and many municipal bills. You can earn credit card rewards by just paying these monthly bills.
Some bodies charge a fee for paying a bill using a credit card, however. The fee, which can run up to 4 percent, will wipe out the benefits of using the card. Be sure and check first before you pay bills with a credit card to such organizations or companies.
7) Buying online
Almost all online purchases can be made using a credit card. Paying bills using credit cards online also can offer protections, such as covering you should the purchase be fraudulent. Many of these online stores allow you to earn credit card rewards with their own branded reward credit cards. The Chase Amazon Rewards Visa® Card offers reward benefits along with credit card protection.
Paying bills using credit cards is much easier than paying by check or cash. Almost all outlets, even small businesses, today accept credit cards. This makes it almost unnecessary to carry a checkbook or to fill your wallet with cash.
Treat it like an occupation and earn credit card rewards
Paying bills with credit cards can become a part-time occupation. Make sure that you pay your credit card bills on time, and that you do not exceed your credit limits. Use the right cards, at the right time, and you can earn credit card rewards that save you money. Paying bills using credit will help you to budget better, and earn hundreds of dollars a year. All it takes is strict discipline and attention to detail.
CreditFast has reviewed the best reward credit cards on the market. Some of the credit card offers are from our advertising partners. CreditFast has objectively reviewed the features and benefits of each reward credit card. We have chosen credit card offers based on our editor’s recommendations.