In a Nutshell Paying your monthly bills with credit cards can reap rewards faster, but are there drawbacks? Depending on the bill, it may make sense to pay it with a credit card. With some bills, however, it doesn’t. Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect.
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Paying bills is a necessary but often mundane part of adulthood. We all have recurring expenses like rent utilities, subscriptions and more that need to be paid regularly. But what if you could turn bill pay into a rewarding experience that also boosts your credit? Enter bill pay with a credit card.
When you pay your bills with a credit card, you can get rewards like cash back or travel points for the things you buy every month. When you pay your bills on time, it can also help your credit, However not all bills can be paid via credit card. Also, watch out for processing fees that can wipe out any rewards you earn.
This full guide tells you everything you need to know to use a credit card to pay your bills. Find out which bills you can pay with a card, the pros and cons, smart ways to pay your bills, and more below.
What Bills Can You Pay With a Credit Card?
You have a good number of options when it comes to paying bills with a credit card. Some of the most common monthly expenses you can charge include:
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Utilities: Electric, gas, water, trash, and sewer bills often allow credit card payment. Just watch out for convenience fees.
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Phone service: Most cell phone and landline providers accept credit cards with no fee.
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When you pay for cable and internet, you can usually use a credit card at no extra cost.
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Insurance: Car, home, health, and life insurance frequently permit credit card bill pay.
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Subscriptions: From Netflix to Amazon Prime, subscription services take credit cards.
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Rent and mortgage: You’ll usually need a third-party service, which charges a fee.
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Property taxes: Payable by credit card but with processing fees.
You can get rewards in a lot of different ways when you pay your credit card bills online. Just stay away from bills with high processing fees that take away from the rewards you earn.
The Pros of Paying Bills With a Credit Card
Using credit cards for bill pay offers a few nice perks:
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Earn rewards: Get cashback, points, miles, or other bonuses on regular expenses.
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Build credit: Making on-time payments establishes positive payment history.
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Payment record: You have proof of payment if any disputes arise.
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Convenience: Pay bills quickly online versus mailing checks.
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Set up autopay: Never miss bill due dates when you automate payments.
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Fraud protection: Get funds back if your card number gets stolen.
As long as you pay your balance off in full each month, bill pay with a credit card provides some useful benefits.
The Potential Downsides of Credit Card Bill Pay
However, there are also some risks associated with paying bills via credit card:
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Debt risk: Carrying a balance leads to high-interest charges.
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Processing fees: Some merchants charge for credit card payments.
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Credit damage: High balances hurt credit through increased utilization.
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More bills: You must then remember to pay the credit card bill.
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Reward erosion: Fees can sometimes cancel out rewards earned.
Credit card bill pay is best for folks who will pay balances off in full each month. Otherwise, the downsides often outweigh the upsides.
Tips for Responsible Credit Card Bill Pay
Follow these tips for keeping credit card bill pay rewarding, not risky:
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Only charge bills you can pay off in full each month.
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Review statements for errors to avoid paying incorrect charges.
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Pick a card with rewards you’ll use, such as cash back or travel points.
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Calculate rewards earned versus any fees to ensure you come out ahead.
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Monitor your credit through free services for hits to your scores.
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Set up autopay to avoid late fees but keep an eye on your balance.
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Consider paying halfway through each month to lower your average daily balance.
Responsible credit card bill pay means always paying your balance off on time and in full.
Can You Pay These Common Bills With a Credit Card?
Wondering about specific bills? Here’s a breakdown of options for common expenses:
Rent
Paying rent with a credit card usually requires using a third-party service that charges a processing fee. Weigh whether rewards outweigh costs before paying rent on plastic.
Mortgage
Like rent, you’ll generally need to go through an intermediary service with associated fees if you want to pay your mortgage via credit card.
Auto Loan
Most auto lenders don’t permit credit card payments for car loans. The few that do typically have high processing fees.
Utilities
Many utility companies accept credit cards but may charge processing fees ranging from $2-$5. Run the numbers in terms of rewards earned before deciding.
Insurance
Car, home, health, and life insurance providers often allow customers to pay premiums with a credit card at no extra cost.
Property Taxes
You can pay property taxes by credit card through some municipalities and third-party processors. Expect to pay processing fees.
Subscriptions
Monthly subscriptions like Netflix, Hulu, Amazon Prime, and more can be charged to your credit card to earn rewards.
As you can see, credit card bill pay options vary by the type of expense. Maximizing rewards means focusing on bills you can pay for free via credit card.
Credit Card Bill Pay: The Bottom Line
Bill pay doesn’t have to be a boring or stressful experience. Paying with a rewards credit card allows you to earn cash back, points, or miles on regular monthly expenses. However, you want to avoid processing fees that diminish rewards earned.
Stick to bills you can pay by credit card for free, like subscriptions, insurance, and some utilities. Only charge what you can afford to pay off each month. And automate payments so you never miss a due date. Follow these tips, and bill pay can become a rewarding routine.
Looking for new ways to accumulate credit card points and rewards?
Paying your monthly bills seems like a great way to earn more rewards. But is it wise to pay your bills with credit cards?.
Not all bills are created equal, so you’ll need to evaluate each to determine which ones make sense to pay with a credit card. But first, here’s a quick look at the pros and cons of paying bills with plastic.
- Accrue rewards or points
- Automatic payments that save time and help prevent late fees
- Convenience of no check writing
- Easier expense tracking with everything on one statement
- Can mean additional time to pay
- Can help meet credit card sign-up bonus requirement
- Possible fees
- Increased debt
- Additional interest if balance is not paid in full
- Credit utilization could go up, which could affect credit scores
Generally speaking, paying your monthly bills by credit card can be a good idea as long as you’re able to adhere to two rules.
- Every month, you should pay off your whole bill on time.
- If you can’t pay your bills with cash, don’t put them on a credit card.
If you’re having trouble paying your bills, a credit card could buy you a little time. But routinely using your credit card to pay bills you can’t afford could end up costing you a lot in interest and making your situation worse. On the other hand, if you’re paying routine bills that are within your budget, using a credit card has benefits.
So which bills can you pay with a credit card? And which bills will charge an extra fee if you pay with a card? Let’s look at which types of bills make the most sense to pay by credit card.
Mortgages are the biggest monthly cost for most people, so getting that credit card sign-up bonus or a lot of points seems like a simple way to save money.
Sadly, virtually no mortgage servicers will allow credit card payments. Why do they do this? Because lenders don’t want to pay the credit card fees that come with taking payments.
If you’re lucky enough to find a mortgage servicer that will let you use a credit card to pay your mortgage, be ready to pay a fee that is likely to be higher than the benefits you want.
If you don’t mind a fee, third-party services such as Plastiq might be a good option for you. For a standard 2.9% fee, the company charges your credit card and sends a check to your mortgage lender (or anyone else you might want to pay). Before using this type of service, you’ll have to calculate if the fee is worth the rewards.
If you’re renting instead of paying a mortgage, you might still have a hard time finding a landlord who will accept something other than a check or cash for your monthly rent payment.
If you’re lucky enough to rent from a company with more sophisticated bookkeeping, consider using your credit card to pay your rent, especially if there’s no fee for the convenience.
Even with landlords that accept only cash or checks, you could still use a service like Plastiq or look for a credit card that allows you to pay rent through its own portal. None of these alternatives comes without a price — like convenience charges, interest or fees — but you get to decide whether the benefits outweigh the rewards.
Auto lenders, like mortgage lenders, aren’t likely to accept credit card payments. They, too, want to avoid the processing fees.
There’s a way to use a credit card to pay off your car loan, but it requires some serious financial discipline. If you find a credit card offer with a 0% introductory annual percentage rate for balance transfers, you may be able to transfer your car loan to the credit card. But before you jump on this idea, there are caveats.
This option only makes sense if you choose a card with a 0% introductory APR that applies to balance transfers. Also, you’ll need to pay off the balance before the rate goes up after the introductory period. Otherwise you’ll be paying interest on the remaining debt on the credit card, and the credit card will likely have a higher interest rate than the original auto loan.
There are other downsides. For example, you may not be able to transfer the entire car loan to a balance transfer card. And depending on the card, you may be charged a balance transfer fee. Also, there will likely be a negative impact on your credit as transferring a large balance will increase your credit utilization.
Given all the caveats, paying your car payment with a credit card isn’t generally the most practical option. You’ll have to consider the downsides and determine if it makes sense in your case.
Debit Card vs Credit Card – What should I use on paying Bills, Online/Store shopping, ETC…
FAQ
Can I use a credit card for bill pay?
You can pay some bills with a credit card, such as utility, phone, and medical bills. If you can’t pay your bills with a credit card, you might be able to get a cash advance or balance transfer.
Can I use my credit card to pay off bills?
The only ways you might be able to use a credit card to pay your bill are through a balance transfer or cash advance, but they could come with fees that add to your debt, among other considerations.
Can I pay someone’s bill with my credit card?
Finally, it is possible to use your credit card to pay someone else’s bill, but it’s not an easy process.
Can I make a credit card bill payment?
Visit any nearest ATM of your credit card issuer with your debit card, insert your debit card into the ATM kiosk, select credit card bill payment option and follow the instructions to make credit card payment.
Should you pay bills with a credit card?
Using the right credit card can also reap rewards such as travel miles or cash back. When you pay bills with a credit card, like insurance premiums and utility bills, you may get rewards. But you need to keep track of your credit card use and payments to get the most out of them. Here’s a closer look at the benefits and risks of paying bills with a credit card.
Should I pay my credit card bill online?
Paying your credit card bill online forgoes the stamp and envelope, allowing your payment to be received more quickly. Many card issuers offer automatic payments via your bank account or debit card each month, so you don’t have to worry you’ll forget a payment.
Should I use my checking account to pay bills?
You should also use your checking account to pay bills in the following situations: Your provider charges a fee for paying by credit card. In most cases, you’ll pay more in credit card convenience fees than you’ll gain in card rewards and perks for using a credit card.
What is the best way to pay credit card bills?
The best way to pay credit card bills is online with automatic monthly payments deducted from a checking account. This minimizes the chances of missing a credit card payment due date, and it can also help cardholders avoid interest charges, depending on the type of payment scheduled.
What bills can you pay using credit card?
Here’s a breakdown of common bills you can often pay using credit cards: Utilities: Many electricity, gas, water, and cable/internet providers accept credit card payments. Mobile phone bills: Most cell phone carriers accept credit card payments. Landline phone bills: While less common, some landline providers accept credit card payments.
Can you pay utilities with a credit card?
You can pay utilities with a credit card, but there may be a convenience fee. Before using credit cards to pay utility bills, consider the pros and cons. Can I Pay Bills With a Savings Account?
