Should You Pay Bills With A Credit Card?

Credit cards provide the luxury of convenience, which is one of the big reasons people carry them. You can simply swipe your credit card for each purchase and pay a credit card bill once per month. You can even set up some of your payments — like subscription services — for autopay, making it easier to manage your payments.

Many want to extend that level of convenience to their other bills, but there’s a risk of accumulating debt if they can’t pay their credit card balances every month.

Before you begin paying your bills with your card, it’s important to have a clear plan for what cards you’ll use, what bills you’ll pay with them and how you’ll pay off your balance when your bill comes due.

Can you pay bills with a credit card?

You can pay bills with a credit card if the service provider offers it as a payment option. This can include your utility bills, insurance premiums, subscriptions (like Hulu or Netflix) and anything else you pay each month.

Just make sure that you’re not being charged a convenience fee to pay with a credit card, as this is common with some bills like utility bill payments. If you have to pay an extra 1 percent to 3 percent of your bill to pay with a credit card, it may not be worth it.

Benefits of paying bills with a credit card

Sometimes the benefits of using a credit card outweigh the drawbacks. If you’re wondering about the perks that come with using credit cards to pay bills, there are several to consider.

• Convenience: When you use a credit card to pay all of your monthly expenses, you can pay just one credit card bill at the end of the month. It also lets you avoid the hassles of cash or balancing your checkbook all the time.
• Earn rewards: Rewards credit cards give you the chance to earn points, miles or cash back for each dollar you spend. Typically, the best rewards credit cards give you up to 3 percent of your spending back every month.
• Earn a generous welcome bonus: The best credit cards available today let you earn an sign-up bonus — usually around $200 —when you spend a certain amount in your first few months of opening an account. Using a new credit card for your regular spending can help you hit the spending requirements easily.,
• Track your spending: If you use a monthly budget to manage your finances, keeping your everyday purchases and monthly payments on one statement can help you track all your spending and cut back on unnecessary expenses.
• Gain consumer protections: Some credit cards come with hidden perks, like travel insurance, extended warranties, purchase protection, streaming service credits and more. You can qualify for these benefits just for being a cardholder and for using your credit card to pay your bills.

Downsides of paying bills with a credit card

While the promise of convenience and rewards can make a credit card seem like a great option for paying your bills, there are also a few downsides to consider. Having all your bills all in one place can make your balance high. If it looks too high, it can be daunting to pay off all at once. Here are some of the signs to look for:

• You can’t pay your card in full each month. The average credit card interest rate is well over 18 percent, which makes credit cards a poor option if you need more time to pay. If you plan to carry a balance each month, consider a credit card that offers a 0 percent introductory APR. However, you could also consider a personal loan that comes with a fixed APR (usually much lower than a credit card’s APR) and a fixed repayment timeline.
• You’re already in debt. If you already have high levels of consumer debt (especially at high interest rates), paying bills with a credit card is a bad idea. Try to pay down the debt you have before you rack up more.
• You are a compulsive over spender. Consumers who may be inclined to overspend with a credit card should stick to cash or debit instead. After all, the convenience of paying with plastic can make a bad spending problem even worse.
• Paying bills on time is already a challenge. If you’re constantly paying bills late, don’t get a credit card. You’ll compound your problems even more if you load all your bills, and any late fees, onto a credit card and then end up paying your credit card bill late.

What bills can you pay with a credit card?

This can vary slightly depending on the companies you work with. However, you can try to pay the following bills and expenses with a credit card if they allow it:

• Mortgage payment or rent
  

  You can’t typically pay your mortgage or rent payments directly with a credit card, but you may be able to use a third-party platform to do so. Just remember that these platforms charge a fee each time you use them. There are also a few credit cards, such as the Bilt Mastercard®, that allow you to pay rent and earn rewards for doing so.

• Utility bills
  

  You may be able to pay your electric bill, gas bill and other utilities with a credit card, without an added fee. To find out, log in to your online account management page to check or simply call and ask.

• Subscriptions
  

  Subscription services are perfect when it comes to paying with a credit card. You can set up automatic payments online, and you will not be charged an extra fee for doing so. Some cards even offer cash back and credits towards subscriptions like Disney+ or an Instacart membership, making a credit card the best payment option.

• Insurance
  

  You may be able to pay your homeowners insurance, auto insurance, health insurance and other insurance bills with a credit card, with no convenience fee. Make sure to check with your providers to see if this option is available.

• Daycare
  

  You may be able to pay for daycare with a credit card, which is more likely if you send your children to a childcare center chain. Also, check whether you can charge summer camps and after-school care on your card.

• Taxes
  

  You can pay taxes with a credit card as well, though you’ll almost always pay a fee for doing so. When it comes to your federal tax bill, for example, you can use three different third-party services for payment, and the lowest possible fee is 1.75 percent.

• Cellphone, internet and cable
  

  Credit cards a definitely a good option for paying your cellphone, internet and cable bills. You won’t have to pay a convenience fee to do so, and you can set up credit card payments online and earn rewards on these purchases. Also, some cards offer cellphone protection if you use your card to pay your cellphone bill.

How to pay bills with a credit card

Some bills are significantly more difficult to pay with a credit card, like your auto loan, student loans or a home mortgage payment. However, you may be able to turn to third-party service providers to pay bills you can’t normally pay with a credit card. Just remember these services will always charge a fee and that these fees can make your bills more expensive and negate any benefits you’re getting for using a credit card, such as rewards points. Also, keep in mind that you can’t directly pay a credit card bill with another credit card.

The process of paying a bill with a credit card can vary depending on the type of bill. Obviously, you’ll pay for in-person expenses and bills with a credit card by swiping your card or dipping your card into a payment terminal. For other bills, you may be able to pay them by entering your credit card number and details into an online portal. Other times, you may be able to pay with a credit card by calling a customer service number and giving your card details over the phone.

Frequently asked questions

• Is it best to pay bills with a credit card?
  

  There are definitely advantages to paying bills with a credit card. However, it may be better to divide which bills to pay with a credit card. Smaller, more consistent bills, such as your cellphone, subscriptions and streaming services, may be best to pay with a credit card. If you pay larger bills with a credit card, make sure to pay it off in full or it can quickly put you in long-term debt.

• Is paying with a credit card safe?
  

  Paying with a credit card is safe as there are protections like zero liability and fraud protection that are not included in other payment methods, such as debit cards.

• What bills should I avoid paying with a credit card?
  

  Anything that you can’t immediately pay back should not be paid for on your credit card. This can include bills like rent and student loans. You also shouldn’t use a credit card if the payment includes a fee that would make the bill a lot higher than if you paid with an alternative methods.

   

The bottom line

At the end of the day, you should be aware of any fees you’ll incur paying bills with a credit card and refrain from charging for purchases you can’t afford to pay back. Ultimately, paying your balance in full and on time can be convenient, help boost your credit score and keep you from going into debt long-term.