Ask Jean: Should I put monthly expenses - like utilities - on a credit card?

Trying to make the most of ask jean should put? You are in the right place. Below we break it down in plain English, with practical tips you can actually use.

Key Takeaways

• A reader asks HerMoney CEO Jean Chatzky: "Should I put monthly expenses - like utilities - on a credit card?" Q: Do you have any opinions re...
• I’ve always paid for these expenses directly from my bank account, but am thinking that there might be some benefit to getting card points/a...
• by going the card route.

A reader asks HerMoney CEO Jean Chatzky: "Should I put monthly expenses - like utilities - on a credit card?"

Q: Do you have any opinions regarding putting regular monthly expenses (like utilities) on credit cards (and then paying the card balances in full each month)? I’ve always paid for these expenses directly from my bank account, but am thinking that there might be some benefit to getting card points/airline miles, etc. by going the card route.

A: I do this, for the record, and was just commenting on how long it’s been since I sat down at my computer to pay a stack of bills like I used to do a couple times a month. The airline miles or other points add up much quicker when you load as numerous expenses as possible on your card of choice. So, yes, I would say absolutely go for this. But, you’re going to want to be careful about putting those credit card bills themselves on autopay.

In this Wall Street Journal article, reporter Imani Moise drew a direct line between the fact that the number of credit card bills paid by automatic payment doubled from 2015 to 2020 and the fact that total interest and fees on credit cards rose by almost 20% during the same time period. She cites a study by University of Illinois finance prof Jialan Wang that shows shoppers frequently pay off a smaller chunk of their balance when they autopay and as a result wind up having to bear bigger interest charges than those who pay their bills manually.

To keep yourself on the straight and narrow, when you enroll in autopay for your credit card (or cards), make sure you elect to have the full balance withdrawn (rather than make a minimum payment). And, if you’re afraid you might get caught short, set up the autopay on a day you know your account will be at its flushest - like right after your paycheck lands.

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Final Thoughts

Before you check out, double-check ask jean should put against current offers and any coupons you can stack. Small habits like this add up to real savings over a year.

Originally published at savingswitch.com.