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Can You Pay Bills With a Credit Card?

Last Updated: October 15, 2021
4 min read

You can pay bills with a credit card as long as the entity you’re paying allows it, and many do. Paying bills with a credit card can streamline your bill-pay process, plus you might be able to earn rewards. That said, to avoid costly interest payments on bills, try to pay off your credit card balance in full each month. Consider these tips for using your credit card responsibly when paying bills:

Which bills can you pay with your credit card?

More than you might think. Generally, you can use a credit card to pay for bills like:

  • Utility bills, including water, gas and electric
  • Cellular or landline phone service
  • Cable and internet
  • Streaming and subscription services
  • Insurance
  • Storage
  • Medical bills
  • Federal and state taxes

If you’re not sure about a particular bill, check with the billing department to verify their credit card acceptance policy.

Should you pay bills with a credit card?

There are some pros and cons to paying bills with a credit card. Weigh the good against the bad to decide if it’s the right move for you. Here’s a breakdown of what to consider:

The pros:

  • Paying with a credit card can save you time.Setting up automatic payments for bills using your credit card could make it easier to avoid late fees and reduce the amount of time you spend managing your finances.
  • You could earn rewards. Rewards credit cards like those from Discover generate cash backmiles or points that you can use toward travel, gift cards and more. If you have a card that pays cash back on every purchase, for example, using it to pay bills could put some of what you spend back in your pocket.
  • Paying bills with your credit card can help you budget. When you’re charging all of your bills to one credit card each month, it’s easier to get a bird’s eye view of where your money is going. You can track what you owe, then allot a lump sum to cover all of those expenses when you pay your credit card bill at the end of the month.

The cons:

  • You might run into fees. One potential downside of paying bills with a credit card is that some vendors and services tack on a credit card processing fee. You’ll have to weigh those fees against the benefit you’d get from using the credit card, but some fees are hard to justify. If your electric company charges $5.95 to accept your credit card payment, for instance, it may be better to pay with another method if you can swing it.
  • Interest charges can apply if you carry a balance. If your credit card charges a high annual percentage rate (APR) for purchases and you don’t plan to pay your credit card bill in full, paying with a credit card could be an expensive way to cover your bills. That’s especially true if you’re using your credit card to pay an interest-bearing loan, which means you’d be paying interest on interest.

How to pay bills with a credit card the right way

If you’re planning to pay bills with a credit card, here are a few best practices to keep in mind:

  1. Stick with one card for paying bills. Choosing one card to pay bills makes more sense than spreading payments out over several cards, from a convenience and tracking perspective. If you’re angling for rewards, be sure that the card you choose offers rewards for everyday purchases, including bill payments.
  2. Plan to pay your credit card in full each month. Paying interest on any bill paid with your credit card increases the cost of those bills, and it can diminish the value of any rewards you may be earning. When you’re mapping out your budget, be sure to set aside enough money in reserve to pay your credit card in full when the bill comes due.
  3. Keep an eye on your credit utilization ratio. Your credit utilization ratio, or the amount of your available credit you’re using, is one factor that impacts your credit score. If you’re charging close to your card limit or maxing it out every month to pay bills, you may be causing your credit score to fluctuate.
  4. Don’t put large bills on a credit card if you can’t pay them. A rule of thumb when using your credit card: Don’t spend more than you can afford or else it could get out of hand very quickly. For example, if you pay your mortgage with your credit card, instead of paying 4 percent interest on your mortgage, you could end up paying 16 percent, 22 percent or higher.

A credit card can come in handy when you have bills to pay, but it’s important to look at the pros and cons of paying with credit. Do your homework so you understand the potential cost involved and weight those against any rewards you stand to earn.

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