9 Things to Know Before Paying Bills With a Credit Card

Paying your bills with your card can be appealing, but there are risks you should know.
5 minute read | 6/11/19June 11, 2019
Woman on the phone looking at her credit card

The convenience of a credit card isn’t limited to everyday shopping purchases at the store or online. Many of the same conveniences apply when you pay bills with your credit card.

Although it might sound ideal to avoid the hassle of paper checks and carrying cash payments around, there are pros and cons to using a line of credit for your monthly bills.

Here’s what you need to know before putting your bills on a card.

5 advantages to using a credit card for bills

Digital payments offer many benefits, especially if you’re a savvy and responsible credit card user.

1. Automatic payments

Placing bills on automatic payments through your credit card offers a few advantages in itself. For example, if you’re juggling multiple due dates, it’s easy to miss a payment deadline. Using your credit card for monthly bills helps you avoid a late fee (and possibly keep the lights on).

This is especially helpful for bills that have a fixed amount due each month, like a gym membership.

2. Earn points or rewards

According to Experian, 42% of consumers use a credit card to earn rewards points. As more rewards programs offer high-value perks for purchases put on your card, adding recurring bills to your card activity could earn you more rewards points faster.

3. Meet sign-up bonus requirement

Speaking of rewards points, if you recently opened a new rewards card that’s offering a sign-up bonus promotion, putting your bills on your credit card may help you qualify.

By putting your monthly bills on your card, you could meet your card’s minimum spending requirement sooner, giving you a better chance at maximizing your card’s bonus.

4. Track your spending

By putting your bill payments on your credit card, you’ll see all incoming and outgoing transactions and have a record of your payments. Your credit card account also gives you quick access to your current and historic spending activity, which is helpful when planning a budget.

5. Extra purchase protections

Many cards are known for offering exceptional consumer protections, like zero liability for fraudulent charges. As soon as you identify suspicious activity on your credit card, such as a bill payment made for an incorrect amount, your card issuer can help you rectify the error.

However, you have minimal safeguards available if a check or cash payment is lost or stolen while in transit.

4 reasons paying bills with a credit card is risky

The handful of reasons to pay bills with a credit card are tempting, but there are also pitfalls associated with using credit for your monthly bills.

1. Extra fees

The ease of paying bills using a credit card can come at a cost. Some providers charge a convenience fee to use a credit card in order to pass on their credit card processing fee to consumers.

For example, as of May 2019, paying your federal taxes with a credit card will add an additional 1.87% to 1.99% fee to your total amount due, depending on the payment processor you choose.

2. Racking up interest

If, for any reason, you’re unable to pay off your credit card bill in full within its statement cycle, you’ll accrue interest on top of your monthly expenses.

Although this risk can be eliminated by simply paying your statement balance entirely each month, life happens and your bills are treated like any other transaction that rolls over into the next payment period.

3. Accumulating debt

Credit cards have a reputation for being a dangerous tool when used without control. If you’re already overwhelmed with debt and can’t repay your credit card balance in full each month, adding your bills to your account will only worsen your financial stability.

4. Credit utilization ratio might rise

Depending on your credit profile, paying bills with a credit card might hurt your credit utilization ratio. Your credit utilization ratio is the amount of credit you’ve borrowed compared to the amount of credit you have available.


Putting your bills on your credit card increases your credit utilization. Considering that 30% of your FICO credit score relies on this ratio, it’s best to keep your account balances as low as possible.

How do you pay your bills with a credit card?

Setting yourself up to pay bills with a credit card can be simple, depending on the bill you want to pay. However, not all providers offer hassle-free credit card payments.

Types of bills that commonly allow credit card payments include:

  • Household utilities
  • Subscription services
  • Fitness memberships
  • Cable and internet
  • Cell phone
  • Car insurance
  • Medical bills
  • Taxes

But when it comes to repaying certain bills, such as installment-based debt, paying with a credit card might be more challenging. A few examples are:

  • Mortgage or rent
  • Auto loan
  • Insurance
  • Student loans

Not all providers accept credit card payments. If you’re determined to use your credit card for as many bills as possible, workarounds such as Plastiq might help.

Plastiq is a third-party service that uses your credit card to pay your bills on your behalf for a flat 2.5% fee. The company sends your payment as either a check, wire transfer, or ACH bank transfer.

Regardless of what type of bill you want to pay with a credit card, payment options vary by provider. Always ask your provider whether they accept credit card payments and if there’s a convenience fee or processing charge to use a card.

Are the fees worth it?

Whether the benefits of using a credit card outweigh the potential fees should be determined on a case-by-case basis. If you’re interested in paying your bills with a credit card so you can maximize your rewards points, calculate the dollar value of the rewards points you could earn, then compare that dollar amount with the fee amount.

However, if your main incentive to pay bills with a credit card is the convenience, you’ll need to personally decide whether the saved time and hassle is more valuable to you.

One way to check this is by noting how long (and how much money) it takes you to pay all of your bills without a credit card. For example, include writing checks or withdrawing cash, buying stamps and envelopes, driving to the post office, and other ancillary expenses. Next, calculate the estimated convenience fees for all the bills you plan on paying with a credit card — this gives you a full picture of what you’ll pay on fees alone.

Compare the results of these scenarios, and decide what makes sense for you.

Best credit cards to pay your bills

If you’d like to try using a credit card to pay your rent, mortgage, or other bills, be strategic about which card you use.

A large upcoming bill, for example, could be a convenient expense to help you earn a high-value sign-up bonus. Also take a close look at whether the card offers a 0% APR promotion period, which allow you to avoid interest charges on your bill payments for a set time.

Find a credit card that aligns with what’s important for you when it comes to day-to-day use. Consider the terms of a card’s rewards program, too, making sure the highest-earning points categories are in the areas you spend the most.

Paying your bills with a credit card is generally possible, but it’s not always free. Whether you pay your bills with a credit card or stick to other methods of payment, knowing where your provider stands on credit card payments can keep you informed if you ever need the option.

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