More than 80 percent of Americans are in debt, with the average credit card owner claiming about $10,000 worth of unpaid charges at any given time. But if debt is created – and paid off – correctly, then it can be an asset and not a burden.
So should you use your credit card to pay your monthly insurance premiums? It’s not a simple decision, but there are a number of reasons why it would be a good idea. For example, if you can pay off the credit card payment in full or almost in full at the end of every month, then paying your insurance payment is not a problem. If you tend to miss payments and decide to set up automatic payments through your credit card, it’s a better idea than letting your insurance lapse because you forgot to pay the bill. Also, if there is no other way for your to afford insurance, then go ahead and put it on the credit card. It is better to incur the finance charges than to be caught without insurance when emergency strikes.
However, it is better to work out a monthly payment plan for other large emergency expenses like medical and dental costs, and save the credit card charges for purchases that you will be able to pay off in the foreseeable future.