For the longest time, consumers have primarily paid their monthly recurring bills directly from their checking accounts through physical checks or bank transfers. However, in 2023, the most financially savvy people will use credit cards to pay bills in addition to using them for everyday purchases. Today, we’re looking at the best reasons you should always use your credit card for your monthly bills and expenses.
1. Earning Credit Card Rewards
It’s official: If you’re not utilizing credit card rewards, you’re in the minority. According to recent data, 80% of American consumers actively earn and use credit card rewards, so what are you waiting for? Over the last three years, I’ve taken countless vacations that were (mostly) paid for by credit card rewards. If you’ve ever thought of spending a week in a tropical paradise or a month backpacking through Europe, you must realize it’s an effortlessly attainable dream – if you’re savvy with your credit card rewards!
2. It Builds Credit
For millions of men and women, the prospect of owning a home or vehicle one day in the future is what motivates them every day. However, as we all know, houses aren’t handed out willy-nilly; you have to prove you’re responsible enough with money first! The same goes for cars or personal loans. In 2021, 42% of people were denied a financial product like personal loans or credit cards due to low credit scores. By building your credit score through responsible credit card spending, you can put yourself into the best financial situation possible for future money maneuvers!
3. Superior Fraud Protection
In 2023, it’s more vital than ever to protect yourself from fraud and potential theft of your assets. Thankfully, credit cards have extensive protections to protect you from unwanted purchases. By using credit cards to pay bills, you can rest easy knowing that your card issuer will have your back if a suspicious charge appears on your account. Although it hasn’t happened often, the few times a merchant mistakenly charged me more than once was rectified by a friendly customer service department in only a few minutes. Talk about peace of mind!
4. Easier To Manage Your Budget
If everything you spend – from monthly bills to everyday spending – is on a credit card, your overall financial picture is far easier to comprehend. Most credit cards break down your monthly expenses into familiar categories to make navigating easier. Should you decide to cut back on expenses or bills, credit card accounts make it easier than ever to do so. Responsible credit card use is critical to anyone’s financial wellness.
5. It Frees Up Your Cash
Everybody loves having a healthy checking account, and paying bills with your credit card is a failproof method to ensure your checking account is flush with cash. You’ll never know when you’ll need to withdraw some money, and people confess that they feel peace of mind when they realize they have extra hundreds (or thousands) of dollars in their respective accounts. I can’t be the only one who stares at their checking accounts in admiration after getting paid, am I?
6. Convenience
Technology is a fantastic thing, isn’t it? By paying monthly bills with your credit card, you can enjoy modern convenience in all its glory. Gone are the days of writing physical checks or even looking up your checking account and routing numbers for online payments. Paying bills via credit card is a straightforward way to navigate your finances in 2023; in the eyes of countless users, convenience is arguably the biggest perk of using your credit card!
7. It Fosters Responsible Spending
Let’s be honest: Responsible credit card use is easier said than done. We’ve all heard the same warning when we were impressionable teenagers: “Don’t get a credit card unless you absolutely have to.” However, the financial landscape has changed dramatically in recent years, and learning to use a credit card responsibly is one of the most significant ways to improve your financial well-being! For many, paying bills with credit cards teaches them valuable lessons about responsibility and maturity, ultimately fostering rational consumer spending.
8. Earning Cash Back
While credit card rewards are the most well-known perks of using your card for payments, earning cash back is arguably just as valuable! Most major issuers offer cash-back cards, like the SavorOne Cash Rewards card from Capital One and Wells Fargo’s Active Cash card. Using these cards means you’re getting paid for paying bills, often receiving 1.5% or more in cash back. The money you receive is yours to use however you like; you can even use it to pay off your credit card balance.
9. Debt Balances Can Be Transferred and Consolidated
Going into debt is nobody’s idea of a good time, but it can be inevitable. However, many credit cards are balance transfer cards that can help lighten the burden of any debt! By applying (and being approved) for one of these cards, you consolidate and transfer your existing credit card debt to one account and pay it off in equal interest-free payments. Look for the best deals; some balance transfer cards offer 18-24 months of interest-free payments.
10. It’s Perfect for Emergencies
Even the most predictable life can take an unexpected turn. Hospital visits, emergency expenses, and mandatory last-minute travel can throw a monkey wrench into any budget. Paying these unforeseen bills with a credit card is an easy way to bite the bullet without sacrificing the money in your bank accounts. While many believe an emergency savings account should be part of everyone’s financial situation, only 78% of U.S. adults have them, making credit cards even more essential.
