Q: Is it advisable to charge regular monthly bills like utilities to a credit card? I've typically paid these directly from my bank account, but I'm considering the potential advantages of earning points or miles with credit card usage.
A: I personally use this approach. It's been a while since I manually paid bills, which I used to do regularly. By charging more expenses to your preferred credit card, you can accumulate airline miles and rewards faster. So, I encourage you to pursue this option. Just be cautious with setting those credit card payments on autopay.
An article from the Wall Street Journal by Imani Moise highlights that the number of credit card bills paid automatically surged from 2015 to 2020, coinciding with a nearly 20% increase in interest and fees. A study by finance professor Jialan Wang at the University of Illinois reveals that customers often pay off less of their balance when using autopay, resulting in higher interest costs compared to manual payments.
To stay organized, ensure that when you set up autopay for your credit card, you choose to pay the full amount rather than just the minimum. If you have concerns about insufficient funds, schedule autopay for a time when your account balance is likely to be highest, such as right after payday.
