Bills show up no matter how you pay them, so you might as well get some valuable rewards when you pay. Yes, you can earn credit card rewards when paying bills, including cash back and travel miles and points.
Like with all credit card use, it is important to pay off your balance in full every month and avoid late payments to keep your credit score high and your costs low. But if you can handle that consistently, there is no reason you shouldn’t be rewarded for paying the bills.
Paying bills with a credit card
The best way to pay a bill with your credit card is automatically. Not all billers allow you to use a credit card, but when you can you can typically also set up a recurring, automatic payment so you never forget to pay.
You can often use your credit card to pay bills including your cell phone, electricity, gas, water, trash, and cable. The more places you can use your card for, the better. You can generally set up automatic credit card payments, or make a one-time payment, through the biller’s website.
You may get convenience checks that draw on your credit card from time to time in the mail. It is best to avoid using these outside of a planned balance transfer. Convenience checks count as a cash advance, and you usually won’t earn any rewards but will have to pay extra fees if you use one.
Even if you do use automatic payments, make sure to check your bill each statement period for incorrect charges. But you can count on auto-pay to help you avoid any late fees, and you’ll earn credit card rewards while you’re at it.
Beware service charges
Some bills do not allow you to use a credit card and others require paying a service charge for using a credit card. In most cases, paying a bill with a credit card that requires a service fee is not worth it.
You may want to pay an extra service fee to use a credit card if it will help you reach a credit card introductory bonus. For example, some cards may offer a large bonus for new cardholders if you reach a certain spend level in a period of time after opening a new account. If you think you’ll fall short, paying a service fee to use a credit card may be worth the cost.
Credit card service charges are often around two percent to three percent of the total bill amount. If the rewards you earn in return are worth less than the fees you would pay, you should avoid paying with a credit card.
Use a card to check service for bonuses
For some bills, like your mortgage or rent, it is much harder to pay with a credit card. But there is a way to make it work. You can use a service like Plastiq that will charge your credit card and send a check to the biller.
Plastiq is great for reaching those big bonuses for high-end credit cards, like the Chase Sapphire Reserve or American Express Platinum. However, in most cases, the fees they charge may outweigh the benefits of your credit card miles, points, or cash back.
A bonus can be worth a lot, which is why it may make sense to pay a fee to earn the bonus. A 50,000-point signup bonus from Chase Ultimate Rewards is worth about $1,100 at a 2.2 cents per point valuation. For over $1,000 in rewards, a $30 fee is a drop in the bucket.
Just keep track of those fees and make sure they are worth it every time you pay them. While they won’t make sense most of the time, you can often find discounts and promos at Plastiq that do make it worthwhile to make a rent or mortgage payment or two with a card.
Pay bills with cards for bigger rewards
The ultimate goal of paying bills with a credit card is earning rewards. As long as the rewards you earn are worth more than any fees and costs, you can, and should, pay your bills with a credit card.
Your credit card gives you purchase and fraud protections beyond what you get with a debit card, and as long as you pay it off in full every month it is free to use. When you pay bills with a credit card, it is like getting a discount on your bill! That is something anyone can appreciate.
It won’t work for every bill, but when it does you get a great result. Every mile, point, and cent you get in credit card rewards has a real value. Your next free vacation or big cash back check may be just a few bill payments away.
Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
This article was last updated May 11, 2018 but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.