by Steven Gomez

Created on: April 08, 2009

For bills that you can pay online, credit cards can give your budget much needed flexibility. In the case of cable bills, power bills, membership fees, phone bills and the like you can charge a bill to an idle card, then pay that amount off a few days later when it better suits your finances. Add in a rewards or flyer miles plan, and paying your bills with credit cards can lead to greater benefits down the road. Plus it helps your credit by keeping the card current and that account active.

When paying a bill conventionally with cash or check, you need to set aside the necessary amount in your budget to make the payment, which limits the flexibility you have with your finances. But charge the bill to a credit card, and you then have the option of immediately paying back the needed money right there, or wait until after you've deposited another paycheck to pay it back. If paying every bill by check might leave your checking account in the red at some point, even temporarily, using credit cards can allow you to put off paying one or more bills until you have enough money in the bank to pay them off and stay in the black.

Charging a bill to credit and paying it off later is a zero sum move, save for residual interest charges, but the added flexibility could spare you a costly overdraft or bounced check. A credit card adds flexibility to bill pay that helps you maintain your budget and can even free up money in the short term for pleasure or emergency purchases.

If the card in question comes with a rewards or points plan, the benefit is two-fold. Not only can you pay your bills on time and add some slack to your budget, but every bill counts on your card as a purchase and accumulates points. The accumulated points can then be cashed in for money, merchandise or other benefits.

Another benefit of using this approach is that it keeps your credit card current and active, which helps improve your credit score. The corresponding payment should be well above the minimum expected payment for whatever balance you run on the card. The bureaus will note these relatively high payments and boost your credit profile as a result.

As long as you're not running a massive balance on your credit cards, they can be used to help you manage the bills and your budget. By charging your bills and paying them off later, you can also reap a chain reaction of other benefits.

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