Report: More People Will Use Credit Cards to Pay for Bills and Living Expenses
Credit card interest rates are killers, averaging anywhere between 14.5% and 17% a year. Accrue enough debt and you can see how easy it is for some people to slip into an uncontrollable spiral of debt.
The Post Office Consumer Credit says that around 12 million people will use their credit cards for essential purchases this January alone. Of this 12 million, 42% will rely on credit cards for groceries while almost 10% will pay the bills with their cards.
When you look at the big picture, using credit cards to pay the bills is not always a bad thing. You could end up with quite a few useful rewards when you use the cards responsibly and pay off all your dues before the interest kicks in. Heck, you might even see your credit score go up a bit thanks to your judicious spending.
Problems will only start to crop up when you fail to make a payment with your credit cards. The interest will automatically kick in, and the credit companies will quickly notice if you have not paid off your dues on time. Excessive use of credit cards also exposes you to a greater risk of identity theft, where a “skimmer” will copy your credit card details and allow thieves to make charges under your name.
Bottom line: use credit cards for paying bills only if you know how to control your spending, repay your debt on time and avoid ID theft. Do this and you may come up with a few perks for your hard work.