Paying Your Monthly Expenses With a Credit Card

If you’re looking for a way to earn rewards, protect your bank account and simplify your finances, using a credit card is a viable option. Paying your monthly expenses with a credit card can be a great way to earn extra rewards while getting some extra time to foot the bill, but you should consider a few things first. 

Here are some things to consider when using a credit card to handle your monthly bills.

Monthly expenses that call for credit card assistance

Life gets complicated sometimes. When unforeseen expenses pop up, you might find yourself overwhelmed by all the bills that flood your inbox and mailbox. Whether you are writing a check for rent or bouncing from website to website paying utilities, it can be easy to say, “I’ll finish this later” or “I’ll wait until I get paid,” only to let the payment deadline pass without a second thought.

Without a good plan for taking care of your monthly payments, you can be hit with late fees and interest charges that will really hurt your bank account.

A credit card can help solve this problem. By responsibly using a credit card to consolidate your payments into one easy-to-manage account, you can get organized and take the stress out of paying your bills. To do so, you have to follow one rule: pay off your balance in full every month. If you can do this, you’ll avoid interest charges, allowing you to fully enjoy the benefits of paying your monthly expenses with a credit card.

The case for using credit cards to pay monthly expenses

Many credit cards have built-in protections like zero fraud liability. You’ll be much more protected from identity or card theft by using a credit card than a debit card because you have the issuing bank as extra protection between you and your money.

On top of these protections, you can use one of the best rewards cards to earn rewards by paying for your monthly expenses. Depending on the card, you can earn points and miles for free hotel nights and airline flights or cash back to lower your monthly credit card balance or buy yourself something special.

Finally, using a credit card to pay your monthly expenses makes managing your bills easier. You can set up automatic payments to your credit card for things like your monthly subscriptions, car insurance, internet and cable services.

For other expenses that don’t have autopay options, pay them immediately after receiving the bill in the mail — no more checking to see if you have enough cash in your checking account to pay them all at once. When you use a credit card, you consolidate your monthly expenses into one payment that you make at the end of your billing period each month.

The case against using credit cards to pay monthly expenses

There are some risks involved with using your credit card, however. Many expenses either can’t be paid with a credit card. Other debts, like mortgages, student loans and car loans, often require payment from your bank account instead of a credit card. Paying your rent with a credit card is more common, but depends on your landlord and often comes with added processing fees.

You’ll also find some of your utilities difficult to pay with a credit card. Ameren, an electric and natural gas provider in Missouri and Illinois, accepts credit cards but charges a $2.35 convenience fee on each transaction. If your bill is high, the fee is minimal and can often be counteracted with credit card rewards, but paying the fee on a low balance makes it less beneficial.

You shouldn’t use a credit card as a crutch for money or debt problems. While it may be helpful in an emergency to use a credit card for your monthly expenses, you’ll be hit with a hefty interest charge if you can’t pay your balance off in full by your due date. If you’re already in credit card debt or are tempted to use credit cards to spend more than you earn every month, you should protect yourself by not using a credit card to pay your monthly expenses.

Establishing good habits

To protect yourself from unwanted interest charges, practice a few good habits when paying your bills with a credit card.

First, use only one credit card for your monthly bills. By using only one card, you keep all of your expenses in one place. If you use multiple credit cards to pay your monthly expenses, you suddenly have to track the payments on all of your credit cards, introducing the same complexity credit cards help you avoid.

Second, keep a list of all the payments you put on your credit card each month. Write it down and stick it on your fridge, keep in a spreadsheet on your computer or in a note on your phone. As long as it is accessible, you’ll know exactly which payments go onto your credit card every month.

Finally, set up an automatic payment to pay your full balance every month. An automatic payment will make sure you never carry a balance to the next month, helping you avoid interest charges.

In a nutshell

If you’re looking for a way to simplify your finances, paying your monthly expenses with a credit card is a great place to start. Credit card payments for many of the services you use all the time are becoming more common, giving you the ability to set up automatic payments that you can take care of all at once at the end of the month. You’ll be better protected from fraud, you can earn rewards and you won’t have to worry about writing checks all the time.

But there are some pitfalls to watch out for. If you already struggle with debt or having enough money to make all of your payments, using a credit card isn’t for you. The interest rates on credit cards are far too high if you don’t fully pay your balance every month. Also, many expenses, like rent, mortgage payments and utilities, either don’t accept credit card payments or charge additional fees for processing them. Look at each expense on its own as well as your full financial situation to figure out if using a credit card for your monthly bills will work well for you.

Trevor Wallis

Contributing Writer

Trevor Wallis is a St. Louis-based personal finance writer who teaches people how to achieve freedom through good money practices. He’s written for The Simple Dollar, Bankrate, NextAdvisor, Rewards Credit Cards and Online Loans. When he isn’t writing, he’s roasting specialty coffee and planning new ways to use credit card rewards to explore the world with his wife and newborn son.