Credit cards can be convenient tools when you want to go shopping. But they can also be used for non-shopping transactions like making bill payments. There are reasons to consider using them for this purpose, but also reasons to avoid using them to pay your bills. Let’s explore both sides of the issue before you decide whether or not to use your credit cards for bill payments.

Here are two pros and two cons of paying your bills with credit cards.

Credit Cards for Bill Payments – The Pros

1. Your credit cards can be a good option if you don’t have the money to pay your bills on their due date, but you will have it soon. For example, your payment might be due the day before you get paid. As long as you remember to pay off that charge quickly, using your credit card could save you money in late fees. Besides, if you use a rewards card, the charge might help you earn more points (although bill payments might be excluded as cash advances).
2. Probably the biggest benefit of using credit cards for bill payments is the timing factor. You can make your payment at the last minute and still have it in on time. Or you can simply avoid the “what if” issue, hoping your cheque makes it to the company you’re paying on time. By the time it arrives via the post and is processed in their office, you might be stuck with a late fee.

Credit Cards for Bill Payments – The Cons

1. One problem with paying bills with your credit card is the potential to rack up more debt. If you’re already struggling financially, paying your bills with credit could make matters much worse in the long run. Besides, you don’t want to end up paying interest on top of your bill payment.
2. Speaking of interest, here’s another big problem. Some types of bill payments (like over the counter bill payments) may be treated as cash advances by your credit card company rather than a normal charge. That means you can be charged a much higher interest rate and you won’t get any interest free days.

Is it a good idea to pay your bills with your credit cards? That depends on what your needs are and what your credit card company’s policies are. If you’re going to get into more long-term debt at high cash advance interest rates, avoid it. If you’re going to avoid late fees by putting the charge on your card and paying it off in a few days, it might be the temporary reprieve you were looking for.