woman swiping a credit card © Rubberball, Mike Kemp, Rubberball, Getty Images

When Beverly Harzog's dog needed surgery in August, she paid the $1,086 veterinary bill with her rewards credit card.

"I figured I might as well get a little bit back on it," says Harzog, a credit card expert, author and consumer advocate from Atlanta. A little she did -- 1% cash back for a  $10.86 reward.

Harzog advocates paying for your purchases and recurring bills with your credit cards whenever possible to reap the rewards.

But her credit card advice comes with a huge caveat: Pay your bills with credit cards only if you pay your balance off in full each statement. "If you pay interest on your balance, you don't make money even with the rewards you can earn," she says.

MSN personal finance columnist Liz Weston couldn't agree more: "Paying your bills with plastic is a good strategy but only if you pay your credit card bills off in full each and every month. Otherwise, you're paying unnecessary interest, and that's just dumb."

Technology makes credit cards easy to use

Thanks to technology, you can pretty much buy or pay for anything with credit cards. There are exceptions, of course. Most mortgage lenders won't let you make your monthly payments with a credit card because they don't want to pay merchant fees. And most brokerage firms, even online brokers, don't let you buy stocks with credit cards. They want your real money -- skin in the game, so to speak.

Still, you can charge everything from your monthly electric and mobile phone bills to your groceries and back-to-school shopping. Put it on a credit card and you can pile up some great rewards along the way.

Credit card issuers like when you use their cards to pay your bills because they earn merchant fees, Weston says.
 

Perks of paying with plastic

In addition to accumulating rewards, here's why you might want to use plastic rather than cash at the register and for recurring bills:

  • The more you spend, the greater the perks. Once you hit certain spending thresholds on your rewards credit cards, you may qualify for additional perks or benefits, says Amber Stubbs, the managing editor of CardRatings.com. For example, she says, with hotel rewards credit cards, once you spend enough for elite status, you qualify for automatic room upgrades, concierge services, free Internet access and free breakfasts. Stubbs and her husband are hoping to have enough rewards on their American Express Starwood card that when they travel to Europe their hotel stays will be free.
     
  • You have backup. "You get a middleman to help with any disputes that may arise with billers," Weston says. When the purchase or service is on a credit card, if you're unhappy with it for any reason, your credit card company can help you work out your dispute with the merchant.