How to Use a Credit Card to Consolidate Bill Payments

A picture of a girl holding a credit card.
How should you use credit to pay your bills? Carefully. Always have a plan to pay the card ASAP.

Credit cards have a really bad reputation among consumer finance specialists.  They typically advise you to only use your credit cards for emergencies and to pay them off as quickly as possible. And that is really a great strategy for using credit cards, especially if they have no annual fees.

But consumers often overlook another great advantage that credit cards offer: they can help you consolidate monthly expenses into a single payment that you can make at virtually any time you wish.

The thinking goes like this: You’re going to pay your utility bills and some monthly service fees anyway, but they are constantly coming in throughout the month. So why not just have them all billed to your credit card and then make a single monthly payment to the card?

Although you can’t get all your monthly payments billed to your credit card, when you’re writing up a monthly budget it is easier to look at a single dollar amount due to the credit card than it is to look at all those little bills. Examples of expenses you may be able to bill to a credit card include:

  • Gas and electric bills
  • Water and sewage bills
  • Cable bills
  • Telephone bills
  • Subscriptions for online services, magazines, newspapers, etc.
  • Monthly gym/fitness membership fees
  • Insurance premiums
  • Storage facility fees
  • Travel pass fees (for toll roads and such)
  • Prebilled parking fees
  • Some vehicle loans (many lenders do not permit you to pay with credit cards)

The only bills you want to pay with a credit card are those which do not charge you a special fee for setting up the payment. Many of these kinds of bills can now be paid online, though, and a credit card is a convenient payment tool.

Rather than miss a regular monthly payment simply because you forgot or came up cash short on the day the bill was due, your credit card may provide you with a convenient payment buffer plan. Just be sure you ALWAYS pay off the credit card in full as soon as possible to avoid incurring any interest charges.