Can you pay bills with a credit card? (2024)

You can pay most bills with a credit card, but it’s not always the best option. You may be charged a fee for each transaction and using your credit card could get you into more debt. On the other hand, paying bills with a credit card can be the key to maximizing cash back, miles or other credit card rewards.

Can I pay my bills with a credit card?

You can pay most utility bills, medical bills, insurance and subscriptions with a credit card. In many cases, you can set up automatic credit card payments for your bill and you may be able to choose a specific amount you want to pay each month or simply opt to pay future bills in full.

Just be aware that while some payment methods are free, such as paying with cash or check, a vendor may charge a convenience fee for a credit card payment. For example, PG&E charges a $1 or $1.35 convenience fee for credit or debit card payments and Southern California Edison charges $1.65.

What bills can be paid with a credit card

With the exception of rent and loans, you can use a credit card to pay most of your monthly bills. These bills can usually be paid via credit card:

• Cable and internet.
• Utilities (including cellphone).
• Subscriptions/memberships.
• Insurance (auto, home, life and health).
• IRS and state taxes.

Just don’t assume that it will be free to pay these bills with credit. When you pay the IRS via credit card, for example, you can be charged a fee as high as 1.98%. On a $5,000 tax bill that fee amounts to $99.

Benefits of paying your bills with a credit card

There are several good reasons to consider paying bills with a credit card. Credit card payments are convenient, especially when made online, since the transactions are instant and they free you up from having to handle physical cash, checks (plus envelopes and stamps), or visit in-person locations. A few other benefits to consider:

• Earn credit card rewards: If you have a rewards credit card, you probably want to use it for as many transactions as possible. Like most transactions, paying bills with the card can help you earn rewards.
• Protect your money: Credit cards generally offer better fraud and purchase protection than debit cards and aren’t connected to your personal cash.
• Improve your credit scores: Using a credit card can improve your credit scores. That doesn’t mean you need to make big purchases on the card, but you can strengthen your credit by keeping your account active. Instead of impulse shopping, use the card for necessities like insurance and WiFi.
• Avoid missing bill payments: When you set up credit card autopay for your bills, you’re less likely to forget about due dates and face late fees or other consequences of being overdue.

Disadvantages

If you struggle with credit card management, charging your bills to a credit card is probably a bad idea. Here are some of the pitfalls involved:

• Convenience fees: Some vendors charge a fee to process credit card payments. The fee for each transaction may be small, but they add up if you’re charged for multiple transactions each month.
• High-interest debt: When you charge a bill to your credit card, you turn the expense into debt. If you don’t pay your credit card balance in full each month, you could face high interest charges. If you miss a credit card payment, you could end up with serious credit damage.
• Higher credit utilization: It’s good to have an active credit card, but it can hurt your credit scores if you carry a balance higher than 10% of your available credit limit.
• Passive account management: In a 2022 survey, 74% of consumers said it was easy to forget about monthly subscription charges. When you use autopay on a credit card, you might be tempted to assume all is well with your bills. But if you don’t regularly review your credit card statements, you might not notice when fees increase, you’re billed incorrectly or you’re paying for a service you no longer use.

When you should consider using your credit card to pay the bills

As a rule of thumb, you should only charge a bill to your credit card if you can pay it off by the next statement due date.

If you take longer than that to pay off the balance, you’ll likely incur interest charges and more debt, which can offset any rewards you earn with the card. Keep in mind that vendor fees for paying with your card can also eat away at your rewards.

Should you pay bills with a credit card if you’re in a financial bind? It should be your last choice, since it can turn your bill into high-interest debt. For medical and utility bills, contact the provider first to see if you can get on a discounted payment plan or pay a smaller amount each month. If not, consider borrowing money from a family member or taking out a personal loan instead.

Final verdict

Credit cards are an acceptable form of payment for most bills, and they’re often the most convenient way to pay. You can set up autopay for most bills, which means you don’t even have to worry about missing the payment due date.

But there can be serious downsides to using a credit card for bills. Credit card convenience fees and high interest rates can make your card an expensive payment method. If you’re hoping to earn rewards, make sure they outweigh all of the costs involved.

Frequently asked questions (FAQs)