The Pros & Cons Of Paying Bills With A Credit Card
Paying bills with a credit card has a number of advantages, including convenience and getting Airmiles or other bonus points if you card offers them. There are also several disadvantages that you need to consider before using your credit card to pay bills.
Many people have cards that offer airline miles or other bonus points. It makes sense that if you have to pay your bills anyway, why not use a credit and get some points out of it?
This can be an advantage, but you need to consider a couple of things. First, can you pay off your credit card every month? If you carry a balance on your credit card, the interest that you'll pay on the bill payment charges will more than outweigh any bonus points you may get.
You should only consider using a credit card to pay monthly bills if you are sure you can pay off the balance at the end of the month.
If you set up an automatic bill payment through your credit card, it can be more difficult to dispute any errors. Because the charge will be processed automatically, it will already have been paid by the time you contact the company to correct an error.
Many people also don't look closely at their bills once they've set up automatic payments, so they're more likely to miss errors entirely.
Another disadvantage of automatic payments is they can be hard to stop or change, especially if they're to companies or utilities with a lot of red tape.
If you ever need to get a new credit card - if one was stolen, for example - you would need to change the information on file with all the companies that you've set up automatic payments with.
This can also lead to charges being processed on the wrong card and being declined. Most companies charge a service fee if a charge is declined, so you could wind up dealing with these extra charges.
In general, using a credit card to pay bills can have more advantages than disadvantages, but it requires you to be responsible about keeping records and especially about paying the card off every month.
If you are able to manage these things, you can get some good bonuses by using your card for paying bills.
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