You can pay your utility bill with a credit card, but you may pay convenience fees. It could help you earn rewards, though, and make sure your bills are paid even if your bank account is empty.
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When life gets busy, you can easily forget to pay a bill or two. What if you don’t pay your utility bill? You might lose important services like water and electricity. To ensure your utility bills are covered every month, you can pay utility bills with a credit card, but there may be a convenience fee and other factors to consider. Here are some pros and cons to understand before paying a utility bill with your credit card.
It can be fun to use a credit card to pay your electric bill and help your credit score at the same time. But it also has some possible downsides that you should think about. If you want to know how to use a credit card to pay your electric bill, this complete guide is the way to go.
Overview of Paying Electric Bills With a Credit Card
It sounds good to be able to get rewards like cashback or travel points just by paying your regular electric bill. Credit card companies offer big welcome bonuses and ongoing rewards to get people to use their cards in this way. This plan can work as long as you pay your bill in full every month.
However, some electric companies charge convenience fees for credit card payments These fees can sometimes cancel out the value of any rewards you earn It’s important to crunch the numbers and see if the math works out in your favor.
Paying with a credit card also introduces the risk of carrying a balance and accruing interest charges. If you do not pay off your bill in full each month, the extra interest fees can quickly outweigh any rewards earned. Maintaining on-time payments is critical.
Benefits of Paying Electric Bill With a Credit Card
If you pay your electric bill with a credit card, here are some of the benefits you might get:
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Earn rewards: Most rewards credit cards offer between 1-5% back in cashback or points on every purchase. This allows you to earn rewards passively on this recurring bill.
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Utilize sign-up bonuses: Credit card welcome offers can be extremely generous, often over $500 in value. Paying bills helps meet minimum spend requirements.
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Build credit: Using a credit card wisely to pay for things and make purchases shows good money sense. This helps build your credit score over time.
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Convenience: Taking advantage of autopay features is easier with credit cards than checking accounts. This ensures you never miss a payment.
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Purchase protections: Many cards offer benefits like extended warranties, return protection, and travel insurance.
Drawbacks of Paying Electric Bill With a Credit Card
Here are some potential risks and downsides associated with placing electric bills on a credit card:
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Interest charges: If you carry a balance, interest charges can quickly cancel out any rewards earned. This makes credit cards expensive debt.
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Fees: Most electric companies charge convenience fees for credit card payments, usually around 2-5%. These fees can erase any rewards.
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Credit utilization: High balances relative to your credit limit (utilization) can negatively impact your credit score. Try to keep this below 30%.
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Spread too thin: Charging too many bills to a card can make it hard to track spending and payments. Keep things simple.
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Rewards caps: Some cards cap bonus rewards at a certain spending limit per year. Paying bills may max this out faster.
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Forgetting autopay: Missing payments because you forgot to enable autopay can hurt your credit score and lead to fees.
Tips for Paying Electric Bill With a Credit Card
If you want to pay electric bills with a credit card responsibly, keep these tips in mind:
- Review your electric company’s fee policy – if fees are high, avoid using a card
- Pick a card with rewards for everyday spending to maximize earnings
- Track your credit utilization and keep it below 30%
- Set payment reminders and enable autopay to avoid missed payments
- Pay your balance in full each month to avoid interest charges
- Compare rewards earned to fees paid to ensure you come out ahead
Best Credit Cards for Paying Electric Bills
Here are some of the top credit cards for paying electric bills and earning rewards:
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Citi Double Cash Card – Earns 2% cashback (1% when you pay) with no caps.
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Chase Freedom Unlimited – 1.5% cashback on all purchases. Great for beginners.
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Capital One SavorOne Rewards – 3% cashback on groceries, 2% on utilities with no annual fee.
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Bank of America Cash Rewards Credit Card – 3% cashback category can be chosen as gas, online shopping, dining, etc.
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Wells Fargo Active Cash Card – 2% cashback on all purchases with $200 welcome bonus.
Electric Company Payment Policies
Before using a credit card, be sure to check your electric company’s payment policies. Here are some examples:
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PG&E – No fees for credit/debit payments with autopay enrollment
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ConEdison – Charges $1.95 fee for credit card payments
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Duke Energy – $2.50 fee for credit card payments under $5,000
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Eversource – $3.95 fee for credit card payments
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Southern California Edison – No fees for credit/debit card payments
Policies vary greatly, so do your research before paying electric bills with credit cards.
Is it Worth it? Do the Math
At the end of the day, running the numbers for your particular situation is key. Compare potential rewards earned to the fees charged by your electric company.
For example, if you earn 2% cashback but your electric company charges a 3% fee, you’ll lose money on the transaction. However, if you earn 3% cashback and there is no fee, you’ll come out ahead.
Do the math each month and if rewards consistently outweigh fees, then paying with credit cards can be rewarding. Otherwise, stick to more traditional payment methods.
The Bottom Line
Paying your electric bill with a rewards credit card can be a smart money move but also comes with risks. Consider your specific electric provider’s policies, your ability to pay bills in full, and your overarching financial situation before making a decision. Use this guide to make an informed choice about whether putting electric payments on credit cards makes sense for your situation.
Pros and Cons of Paying Utility Bills With a Credit Card
When considering paying utility bills with a credit card, evaluate the pros and cons first.
What Utilities Can You Pay With a Credit Card?
Your utility company may offer different ways to pay, but in general, you can use a credit card to pay the following bills:
- Phone or cellphone bill
- Internet bill
- Cable bill
- Water bill
- Electric bill
- Gas bill
Debit Card vs Credit Card – What should I use on paying Bills, Online/Store shopping, ETC…
FAQ
Can I pay electric bill using credit card?
Pay using credit, debit or prepaid cards powered by Mastercard, Visa, or JCB. Pay in advance or settle overdue bills direct to Meralco. Pay for disconnected service.
Is it okay to pay utility bills with a credit card?
Bills you can generally pay with a credit card include utilities, insurance, phone services, internet, cable and sometimes rent or mortgage payments. But there may be processing fees if you use a credit card.
Which card is best to pay utility bills?
Best Credit Cards to Pay UtilitiesPartner NameCard NameOffer DetailsSBI BankIRCTC SBI Card Premier3 Reward points per ₹125 on Dining and Utility spends. HDFC BankIndianOil HDFC Bank Credit CardEarn 5% of spends as FP on shopping for groceries, utilities & bill payment.
Can you pay utility bills with a credit card?
When life gets busy, you can easily forget to pay a bill or two. What if you don’t pay your utility bill? You might lose important services like water and electricity. To ensure your utility bills are covered every month, you can pay utility bills with a credit card, but there may be a convenience fee and other factors to consider.
How do I pay my electric bill online?
It’s that easy! You can pay your electric bill online with Visa®, MasterCard®, Discover®, American Express®, Diners Club®, or PULSE®, STAR®, Accel®, or NYCE® debit cards that don’t need a PIN—all through FirstEnergy’s online payment system, which is provided by ACI Speedpay. Venmo, Apple Pay, Google Pay, and PayPal are available.
How much does it cost to pay your electric bill?
According to the National Association of State Utility Consumer Advocates, those fees can range from $1. 50 to $5. 85 per transaction. If your electric company charged you $5. 85 per transaction to pay your monthly bill with a credit card, you’d pay $70. 20 per year just in fees.
Do credit card rewards Pay for utility bills?
Card rewards outweigh extra fees: Your credit card rewards points or cash back can add up if you use your card to pay for utilities. If you had $4,000 per year in utility bills and used a card that offered 1. 5% cash back on every purchase, you’d get $60 in cash back annually. But watch out for card fees.
Can you pay bills with a credit card?
You can pay most bills by credit card, including cell phone bills, gym memberships, and streaming services. However, mortgage lenders don’t usually accept credit card payments. With utility companies, it depends, but most charge fees for the convenience of card payments.
How do I pay bills with a credit card?
Here’s a step-by-step guide on how to pay bills with a credit card, whether you’re doing it online, in-store, or by phone: Not all companies do, and some may charge a fee for using a credit card. You can usually find this information on the payee’s website, in your billing statement, or by contacting their customer service.
