To charge recurring expenses or not?

**Petunia 100** · 07-09-2014, 09:46 AM

Originally posted by frugalredhead View Post

Just looking for anyone's personal experiences or advice. The card that I will have paid off next month is the credit card that my kids' daycare costs go on. I am questioning whether I should keep the charges coming to that card or go to paying cash. I get 1% cash back, and it's a charge of $1250 a month. If I paid cash, that would be 75% of 1 of my paychecks, which makes it really hard to schedule all of my other payments. If I keep it charging to that card, I would split the cost into 2 payments and pay it off every month (both paid before interest would be applied).

Is there any reason I should do one or the other?

Well, it looks to me as though you have listed two good reasons to keep paying for daycare via credit card. It fits better in your cash flow and you earn 1% cash back.

A good reason to not do it is finance charges. Since you will the balance paid in full next month, that will no longer be a problem.

**disneysteve** · 07-09-2014, 11:16 AM

I agree with Petunia. Why would you not use the credit card? Keep charging just as you've been.

Credit cards are great at helping to manage cashflow. As long as you are only charging things that you'd be buying anyway and you always pay the bill in full and on time, it's senseless not to use them and enjoy the rewards.

**frugalredhead** · 07-09-2014, 11:34 AM

I guess I am worried that it'll get away from me (since I obviously don't have a good track record using credit cards responsibly!) I will go ahead and keep it the way it is, and make darn sure that it's paid off each month! If I find myself having trouble, I'll re-evaluate my options. Thanks!

**Drake3287** · 07-09-2014, 11:35 AM

I agree about using the card. We have the no fee Costco American Express card and we charge EVERYTHING (yes, I mean everything!) and earn a yearly cash reward of over $1,000 each year. I simply pay it in full each month and haven't paid a finance charge in 20 years. As for places that don't take AMX, I use my no fee United Mileage Plus Visa card and earn a few miles.

If you trust yourself to pay a card off each month then that's the way to go. Many people just don't have that commitment to paying it off each month.

**feh** · 07-10-2014, 05:54 AM

If you get cash back and you are never charged interest because you pay the total bill each month, use the CC as much as possible.

We charge everything we possibly can, including monthly bills.

**TBH** · 07-12-2014, 06:05 PM

It does make financial sense, but I can understand your fears about letting it get away from you.

Do they automatically bill the card? What if you stop carrying it in your wallet, but put this one big expense on it?

I have one card that is just for automatically paid regular bills. I don't carry it in my wallet, because my wallet has been stolen twice and it was a huge pain to change all my auto-pay bills. The card sends 1.5% to my mortgage principal. It makes me happy to see even tiny extra payments going to my mortgage.

**frugalredhead** · 07-13-2014, 04:09 PM

Originally posted by TBH View Post

It does make financial sense, but I can understand your fears about letting it get away from you.

Do they automatically bill the card? What if you stop carrying it in your wallet, but put this one big expense on it?

I have one card that is just for automatically paid regular bills. I don't carry it in my wallet, because my wallet has been stolen twice and it was a huge pain to change all my auto-pay bills. The card sends 1.5% to my mortgage principal. It makes me happy to see even tiny extra payments going to my mortgage.

They do automatically bill it. I am going to also put my gas on it, because 6 months out of the year I get 5% cash back on gas, so I'll just give it a try and see how I do. Eventually I have a few other recurring charges I will move to that card too, and then I'll just pay it off every month. I think that maybe I have changed my financial mindset enough to not let myself start carrying a balance on it. I've learned a lot in the 6 months since I've started aggressively paying down this debt!

**krantcents** · 07-13-2014, 04:12 PM

I use my credit card as often as possible because I earn frequent flier miles. The key to usin g a credit card is paying the entire balance off each month. If you cannot do that, you probably should not charge it anyway.

**moneysma** · 07-14-2014, 03:21 PM

I have recurring charges go onto my one credit card. I make it a point to check my statement each month in detail to make sure the amount charged is correct. My cable company has a nice habit of randomly adding charges "by mistake" every few months.

If you are only using it for your daycare and managing cash flow, then it makes perfect sense to keep using it as is. Plus, the cash back is a nice little perk.

To charge recurring expenses or not?