This sounds like a good idea, at first. But in the long run, using rewards cards to pay for our everyday bills could end up costing everyone more. Companies never really give away anything for free. Someone has to pay for all of these rewards.

What many people don't know is that for every purchase made with a credit card the merchant must pay the credit card company a percentage of the sale. And with rewards cards that percentage is higher. The percentage of the sale that the merchant must pay on most credit cards is between 1.5 and 1.9. With credit cards that give rewards to the card holder, the merchant pays between 2 and 3 percent of the purchase.

With the invention of credit cards, merchants were forced to raise their prices to cover the costs of customers using them. As more people use credit cards to pay for bills, the companies will need to raise prices. And, everyone will pay the higher price, not just the people using the credit cards.

In our lives today, there are times when we need to use credit cards, like unexpected car repairs or the dryer stops working. But, for the expected bills that we pay every month, it is best for everyone to pay with cash. And a lot of companies offer automatic debit from checking accounts if you like the convenience of not needing to mail in a payment each month.

A good rule to remember is that nothing is ever really free and if it sounds to good to be true, it probably is.

Learn more about this author, Jennifer Trivette.
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