by Maxwell Payne

Created on: February 25, 2009

Ways to profit by using your credit card to pay your bills.

Paying your bills with your credit card can give you some extra money in your pocket if you follow these tips and tricks. You can already make a wide range of purchases with your credit card, so add paying your bills to the list to maximize the benefits of your credit card.

A word of caution to start out: Those already in credit card debt or those who don't pay their bill in full most months shouldn't use their credit cards to pay bills as any 'profits' will be wiped away by the high interest rates.

Get a rewards or cash back credit card

To profit from paying bills with your credit card, look for decent rewards credit card that offers at least a full 1% back on all purchases. Many rewards credit cards also offer bonus points or cash back for common purchases such as groceries, gas, and yes some bill payments as well.

I have a credit card that gives me 1% back on every purchase, and 3% back on the top 3 areas I spend in each month out of 15 possible areas, this includes my monthly cell phone bill. I also have access to an online rewards site where I can shop many well known stores and companies and get up to 10% back.

Set up bill payment or auto pay

Many of your recurring bills such as cell phone bills can be set on an auto-pay plan through either your credit card company or the company whose bill you are paying. You can set up automatic payments so you'll never miss a payment on your bills and be earning rewards or cash back in no time. Always review your bills and statements even if you use auto pay.

Watch out for fees

Some companies (utility companies are notorious for this) will charge you a fee to use your credit card to pay your bill. With fees that average around 10 dollars a transaction, paying these bills with a credit card will make little sense for your profit goals. That said, only pay bills that don't charge extra to use a credit card.

Pay in full

Rewards and cash back credit cards come with higher interest rates and thus higher credit card bills if you don't pay in full each month. Pay your bill off in full to avoid interest charges and maximize your profits.

Stash the cash

Since you are using your credit card to pay most of your bills and expenses, why not earn some more cash? Open a high interest checking or savings account to keep your money in.

You won't be paying your bills from your bank account and you generally have about 20 days from your credit card statement to the due date, that time can be used to earn interest on your money before paying your credit card balance. Your bills get paid on time by your credit card and you don't have to pay your credit card till the next due date.

By paying your bills with your rewards or cash back credit card you'll be able to use features such as auto-pay that can prevent late fees and missed payments. Your cash will earn interest during grace periods and you'll earn rewards points or cash back on every bill you pay with your credit card.

Learn more about this author, Maxwell Payne.
Click here to send this author comments or questions.