Credit vs. Cash

Credit cards are a powerful financial tool.

When wielded correctly, they can help you build your credit, and control your expenses. Most people use credit cards the "wrong way" - buying big ticket items, then spreading the cost over several months of payments. This is good for the credit card company, and bad for you - why? Because you're paying interest on the balance, which by the end of the year, can amount to hundreds of dollars wasted.

A great way to use your credit card, which I've been doing for several years is to use it to pay household bills. It brings several advantages to the table.

The majority of utility companies today - cable TV, cellphone provider, internet, etc. - allow you to set up automatic billpay through their website. From here you can set your bills to automatically charge to your credit card each month. In turn, set your credit card to automatically debit the full balance each month from your checking.

No interest

Because you pay the card balance in full each month, you are charged no interest.

Worry free

Instead of juggling several due dates for your bills, you have just one to remember: your credit card. All you need to ensure is that you have enough money in checking to cover the payment.

Potentially rewarding

Many credit card companies offer cashback, meaning just paying your bills can earn you hundreds of dollars in rewards.

Builds your credit

Using your card and paying it off on time each month shows you're a responsible customer, and can improve your credit score.

Purchase protection

Most credit cards have free policies that protect you in the event of a dispute over defective products or service.

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