Should I use a credit card to pay my bills, even though I have enough money?

A Reddit user is debating the best method to pay his bills.

The poster has no credit cards right now, and he makes more than enough money to cover all of his expenses for the month. That includes his fixed costs like his home loan and his discretionary costs like food and gas.  He’s now debating whether he should sign up for a cash back card so he can just charge everything and then make one monthly payment instead of paying the bills multiple times a month, especially as a card would also allow him to earn cash back on things he’s buying anyway.

So, should the poster opt for a card and switch the way in which he pays? And, if so, how should he set up the process of charging everything and paying it off in order to maximize his cash back while simplifying his financial life?

Is paying your bills with a credit card a good idea?

First things first: The poster should definitely get a great card and pay as many bills as he feasibly can with it.

As he pointed out, doing so can help him to get paid back for things he’s paying for anyway. If he can pay a couple of thousand dollars worth of bills on his credit card each month and he gets a great card offering 2% cash back on everything or 5% back on his top spending categories, he can earn hundreds or even thousands of dollars a year in rewards. By not using a card right now, he is passing all of that up.

Of course, there are some bills he realistically won’t be able to pay with a card. Most mortgage lenders don’t accept credit card payments, for example. But, even if he can’t pay everything, the more stuff he can earn cash back on, the better. The poster can check with his insurance companies, utility providers, and others he pays regularly to see which ones accept cards as a payment method.  

What’s the best way to structure bill payments with a credit card?

Beyond earning cash back, the poster also expressed a desire to simplify his financial life. Specifically, while he wants to pay off his credit card in full each month, he’s tired of having to make a bunch of small payments to all his different bills.

Fortunately, a credit card will allow him to simplify and streamline things. He should be able to automate most of the payments he has to make. So, for example, he could sign up to pay his phone bill with his card as well as his electric bill and his gym membership. Once he has as many autopayments as possible going on the card, then he won’t have to individually remember to pay the bill for all those different things.

Of course, he’ll have a large balance on his credit card then. But if the poster sticks to a budget and doesn’t overspend, he can just set up to have his credit card autopay on payday. This will make as much of his financial life as possible automatic, so all he’ll really need to do is review the statements once a month to make sure the payments are applied as they should and to make sure there are no unexpected charges on his cards. 

The reality is, paying your bills with a credit card is a great idea for the rewards, the simplification of your money management, and the ability to build credit. This poster should definitely be using a card for his costs, and so should just about everyone else who can trust themselves not to get too deeply into credit card debt. There are plenty of great cash back cards out there, so just research your options to find the perfect one today.