Hi, I know a fair amount of people are scared to use credit cards, but for those who are super disciplined and pay off their credit card bills every month, I would check into paying your monthly bills by credit card using auto-pay. I pretty much have all my bills set up to get paid by credit card. It saves me from forgetting to pay a bill, saves a TON of money on postage and I get rewards back from my credit card for all the money I 'spend' on my credit card. I guess the only downside to this is that you do have to remember to update the expiration date of your credit card with all the companies that you use the credit card for, but that does not occur very often. The way I figure it, my credit card company pays me a little bit of money every month to pay my bills!
The main issue here is that you CAN use your credit cards to pay your bills...but if you find that you HAVE to use them to pay your bills then something is definitely wrong in your hosuehold and your finances may need to be re-evaluated. There is nothing wrong with getting the most out of your credit card companies by building up points, etc. as long as you pay off your balances every month and are not reliant on using your cards to pay for your normal living expenses.
I know several people who have landed up heavily in debt by using their credit card to pay off bills. They started off with good intentions, but it's so easy to 'forget' to clear the balance, or use the credit card as a short term financial bridge. If you can be really disciplined, it's a good way to rack up reward points, but I would think it's a bad move for most people. I'm certainly not strong willed enough to go down that route, and I don't know anyone who is.
If you set up a direct debit to pay off the credit card debt every month (and have the funds to do so), this is a great way to build loyalty points and get rid of the hassle that is paying the bills. And if you do it online, via some bank application, you won't even have to remember changing the cc number once it expires. I can do that in my bank's home banking application, however I prefer to use current funds rather than credit cards for paying my bills, because it only takes one bad step and your credit card points build up becomes a money sinkhole.
I pay my bills auto with my credit card and my credit card gets auto payed every month as well. I gain points which is a payback at the end of the year so it's a bonus to me. I don't have to, it's a bonus for me. I spend below my head not above it.
I guess I don't see the difference in discipline in paying your bills with your cash versus paying them off with your credit card. If you were using your checking account, you'd be paying on a monthly basis, so why not just use that money to pay the credit card instead? Clear off one card completely and put everything on auto pay. Then, you know where everything is going and only have one date to consider. I've done during many periods of my life and I'm not a "super responsible" person with my money. People can fall behind on their regular bills just as easily as they can on their credit cards.
I used to use my debit/credit card to pay Verizon each month. I am so glad it wasn't on automatic bill pay because when I cancelled my account with them and transferred all of my numbers over to AT&T, Verizon still claims I have an account with them too. Billing me $500 because they claim I have an account still and that I am 2 months late even tho I cancelled it almost 3 months ago and they don't want to acknowledge it. If this was on automatic bill pay, I would continue to be docked for this and wouldn't have a leg to stand on when fighting it. I trust no company enough to automatically debit or charge my account every month. I also know somebody who got charged to their account twice in month due to a computer glitch. I won't do automatic bill pay.
Even if it were on automatic bill pay, all you would have to do is talk to your credit card or bank to stop the payment. If it were a debit card, you could simply get a new debit card. You could do that with both, but especially with the debit card. They would continue to use the same card numbers, but it would be going off into space as there is no number to connect it with. Although, I would try to not have bill pay on a debit card. With the credit card, you have time to sort out any billing issues prior to you laying out cash. With a debit card, it's already been done.
They will not stop the payment, the only thing you can do is to have it disputed. Main problem with that is that they have a billing statement in that amount, proof that you were a customer (even tho you terminated service) and they had your credit card number because you gave it to them on file. They didn't technically do an unauthorized charge until months of fighting it and proof. It really is a hassle but I have tried to stop a payment before and was told flat out this information here. It really is more of a hassle then it is it worth for me, but I hope others have a better experience with it
Wow! In general this is a genius idea that never occurred to me! Unfortunately, you can get caught up either way. I would have to keep perfect track on the auto payment, because paying a small amount every month through autopay may not cover the entire balance. Perhaps if I get things in order where the credit cards are all paid off and I can start from the beginning I can create a cycle where I pay a decent amount through auto pay as a backup so I don't forget. Then whenever I want at the end of the month pay the remaining balance off from the direct payment on the credit card. The largest down side besides not keeping track well is not knowing if a bill may shoot through the roof on you and screw you over. That is what would frighten me most I believe. Sometimes things can go a little strange.... but I think most of my bill companies here are fairly reliable in that respect. Can you make a loop where credit cards pay for each other and then one of your debit accounts pays one of the credit cards? That may be scary.... ( O.O)
I like doing it this way mostly because I can reap the rewards, too. So I will pay the bills and then immediately pay off the credit card, so I'm not racking up any interest or fees. By doing so, though, then the transaction goes through them, I build up "points" or "credits" and then I get rewards, discounts, or products later on for using the card. It's like double dipping. For anyone who gets behind, that can be really dangerous, but if you know what you're doing, it's all good.
Yup. This idea is for people who pay their credit card in full every month, no matter what. That's what I do. I like the fact that paying by credit card reduces the amount of due dates I need to remember every month. I always look over my credit card statement to make sure that nobody is double dipping me or doing anything else I don't want. And I love my reward checks!
Wow. I'm sorry that your bank sucks. The ones that I bank at don't continue to charge to a card that is no longer active. In fact, I got into a huge argument about that as I completely forgot that they sent me a new card and I wasn't getting billed by a company that wanted to charge me late fees. The requests were going into cyberspace.
Of course, as you said, you have to make sure that you're absolutely fastidious about paying off your credit card bill every month, or else you're shooting yourself in the foot... but it makes sense if you're already paying all your bills on time. Then it's like paying one large bill to your credit card rather than a million smaller ones to various companies.
I use my credit card to pay my bills, simply because its easier to wire money from my VISA directly to the company I'm paying off. Using the credit cards because you have no other choice, well that's a different issue altogether. You need to make sure that you stay on top of all payments, or it could become dangerous for your finances. Consider trying to pay everything for a month, using finances you already have, if you can't handle it - some changes may need to be made.
Sometimes, I think that helps people if they do pay for everything on their credit cards as that would be fewer times they'd be reaching into their bank account. If they know that they want to pay the card off in full, then they just use the card to a certain amount and then issue out that one payment to the company.
I do not even have a credit card. I am happy about this, because if I did, and I used it to pay bills, I would owe WAY too much money.
This is a great way to pay for a vacation if you are disciplined with your credit card. My cousin pays her mortgage, food, all her expenses with her credit card. She gets miles for American Airlines and goes somewhere every year for free. This is how she finances her trips. She also get other discounts for her high activity. However you must be disciplined and only use the cards for paying your bills. Some people will use the card for buying stuff for themselves and then the balance is growing leaps and bounds with a high interest rate. If you are able to use it I would recommend people to do this. There are loads of free bees that come with it.
Lol I had some problems with Verizon too but have you tried giving them a call? They can be sometimes helpful over the phone. Also I use credit card to pay for Verizon bills as well.
I agree with novasparker because when you're paying bills with credit cards it's tantamount to "robbing Peter to pay Paul." Usually you will use incoming income to pay bills but if you're using money that's not yours to pay your bills, in the long run you're asking for trouble. I only have a couple of debit cards, and try to keep my savings at least at two house payments. I never buy on credit, if I don't have the money to pay cash for something, that means I don't need it.
