Should You Pay Your Bills With Credit Cards When Short on Cash?

Ben Allen  | 

When times get rough and money gets tight, having a little bit of flexibility can be really helpful. Credit cards can give that flexibility you might be looking for with your finances, like being able to put off paying a bill until you can get enough money to cover it, or making a necessary purchase when short on cash.

Knowing when to use a credit card, though, is important, so as to avoid digging yourself deeper into a worse situation. For some bills, it’s smart to utilize a credit card, while for others, this will just lead to paying more money in the long run.

Benefits of Using a Credit Card

Using a credit card has two major benefits. The first benefit is that credit cards can give a person an extra chunk of time (typically a month or 30 days) to pay off an expense.

The other benefit is that many credit cards offer rewards of some form or another every time you use them. These benefits are typically small for each purchase, but can be built up with regular use. Common rewards include cash back on each purchase, points or “miles” that can be used to book airplane tickets, money or points to specific stores, or discounts when purchasing gas.

Recurring Bills: Non-debt and Utilities

One potential, positive use for credit cards is paying off recurring bills like energy, water, internet, cell phones, and cable. By doing so, you can earn whatever rewards are associated with your card on things you were already going to pay anyway.

It’s also nice to be able to put off paying these types of bills when you run out of money for whatever reason. Instead of only having a few days of flexibility to get a check to the power company, you can have an extra 30 days to pay off the debt to your credit card company.

Be aware, though, that some small companies might have additional fees if you want to pay with a credit card. In these instances, you’ll need to decide if paying an extra two percent on your bill is worth getting that payment extension.

Paying Your Rent With Credit

Similar to the above situation, using a credit card to pay your rent can give you more breathing room, but it’s a much less likely option.

Many landlords don’t accept credit card payments and only accept cash or checks for rent. Those that do accept credit cards often charge a convenience fee, so again, you have to decide if getting that delay with worth paying extra.

Just be sure that you’ll have the finances available to then pay for the rent on your credit card and the next month so that you don’t put yourself in a giant hole of debt.

Paying off Student and/or Car Loans

Another common type of monthly bills are your existing debts. These include student loans, car payments, and any kind of debt you have accrued over your life.

These are bills that you can’t pay using a credit card. Most loan providers just won’t allow it; they instead require payment using a debit card or check.

Paying For Daily Necessities

You’ve got to eat. If money runs short, use your credit card to take care of paying for daily necessities so you can put your current funds towards bills you can’t put off. This can include groceries, gas, home maintenance, and other day to day costs you have.

Just be sure to keep track of how much money you are putting on your card, and ensure that you can pay it off when the bill comes due. It’s easy to lose track of how much you owe on a card, and then realize you spent too much at the end of the month when it’s too late. Make a budget, stick to it, and don’t let yourself get in credit card debt.

When Not To Use A Credit Card

Regardless of your situation, there is one instance that you should never use a credit card. If you won’t be able to pay off your credit card bill when it comes due, don’t put a bill on the card. This is a terrible decision, as credit cards have relatively high interest rates, and could transform a small debt into a huge one in just a few months. There are other solutions to handling expenses in a time of need if you can’t put it on a credit card and pay it off on time.

Before you simply just decide to use your credit card to handle your bills, weigh all of your options. Some companies have a grace period with paying bills, many just being a few days, while others could go for a whole month late before you get in trouble. Do some research to find what could benefit you the most when utilizing your credit cards.

Need more information on credit cards? Visit our credit card resource center. Looking for more ways to improve your credit score? Visit our credit score resource center for more tips and guides.

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Ben Allen is a freelance content creator and digital marketer who believes in helping small businesses succeed. He spends his free time bragging about his two daughters, eating stuffed crust pizza, and playing video games.

This post was updated February 28, 2019. It was originally published July 31, 2017.