How to Pay Your Utility Bills with a Credit Card

While using a credit card to pay your utility bills can help you earn valuable rewards, you could face hefty processing fees.

Close up of an electric meter
Updated May 13, 2024
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If you have a rewards credit card, you may want to maximize your points and find ways to rack up more rewards. But at the same time, you also want to avoid building up credit card debt.

A great way to earn valuable rewards without developing a big balance is to use your card for routine expenses you have to pay for anyway, such as your utility bills. The average single-family household spends nearly $4,000 on utilities each year. With a good credit card, those expenses could help you net rewards to use toward free travel or statement credits.  

But is it always a good idea? Here’s what you should know before you pay utility bills with a credit card.

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Is it a good idea to pay utility bills with a credit card?

Using your credit card to pay for utilities may sound like a no-brainer to earn rewards, but there are distinct benefits and drawbacks you should consider.

4 times paying for utilities with a credit card makes sense

  • You want to automate payments: If you link your utility accounts to a credit card, you can usually sign up for automatic payments. Autopay will ensure you never miss a payment, giving you one less thing to worry about.
  • You want to track your spending: Your credit cards can sync with budgeting apps like Mint or You Need a Budget, helping you track your spending and manage your money.
  • You don’t want to write a check: Using your credit cards to pay for your utility bills means you don’t have to remember to write and mail a check, transfer money to your checking account, or keep stamps on hand.
  • You want to earn rewards: Your credit card rewards points or cash back can add up if you use your card to pay for utilities. If you had $4,000 per year in utility bills and used a card that offered 1.5% cash back on every purchase, you’d get $60 in cash back just for covering necessary expenses.

3 times using your credit card for your utilities may not make sense

  • The utility company charges high fees: Some utility companies charge you a processing or convenience fee to pay your bill with a credit card, so you should ensure the credit card points you can earn will offset the fees you pay.
  • You have to use a third-party service: Some companies won’t allow you to use a credit card at all. In that case, you’ll instead have to use a third-party service if you’re set on using a credit card. However, these services charge additional fees.
  • You’re worried about your credit score: It’s possible that using your cards to pay for utilities could damage your credit score. Your credit utilization — how much of your available credit you use — accounts for 30% of your FICO credit score. With more charges on your card, you’ll use more of your credit line, potentially increasing your credit utilization and reducing your credit score.

How to pay utility bills with a credit card

Most utility companies, including electric, water, cell phone, and internet providers, will allow you to use a credit card to pay your bill. However, some may charge a fee for the convenience of using a credit card. According to the National Association of State Utility Consumer Advocates, those fees can range from $1.50 to $5.85 per transaction.

If your electric company charges you $5.85 per transaction to pay your monthly bill with a credit card, that means you’d pay $70.20 per year just in fees. Along with your other utility bills, you could end up paying a hundred dollars or more in fees by opting to use a credit card as your payment method.

Some utility companies may not accept credit card payments, but you can get around this problem by using a third-party service like Plastiq. You pay these servicers with a credit card, and they’ll then pay your utility bill using a check or money transfer.

However, you should keep in mind that these services charge extra fees. For example, Plastiq charges a 2.9% fee on every transaction. If your electric bill is $100 per month, that means you’d have to pay an additional $2.90 in fees — or $34.80 in fees annually.

Are the fees worth it?

When deciding whether or not to use a credit card to pay for utility bills, it’s important to consider the fees and potential rewards.

Say you can earn 1.5% back on utilities with your cashback rewards credit card. On a $100 bill, you’d get $1.50 in rewards. But if you have to pay $2.90 in processing or convenience fees, the cost of using a credit card outweighs the rewards.

But a card with higher rewards may make it worthwhile. For example, the U.S. Bank Cash+® Visa Signature® Card offers a 5% cashback reward rate where you can earn on two categories you choose (up to $2,000 in combined eligible purchases each quarter). If you choose utilities as one of your bonus categories, you could earn $5 back on that $100 bill — potentially offsetting any convenience fees you may pay.

To earn valuable rewards, use one of the best rewards credit cards that offers high-enough rewards to make up for fees, or use your card for utilities that don’t charge a fee at all. Luckily, that’s becoming more common: According to Electric Light & Power, there are now over 30 utility companies that offer fee-free credit and debit card processing.


Which credit cards are best for utility payments?

Most credit cards don't offer additional bonus rewards for utility payments for things like electrical service or water. However, some cards, such as the Ink Business Preferred® Credit Card, offer the option to earn bonus rewards on internet, cable, and phone services. It's more common for a business credit card to offer these types of perks to cardholders.

Choosing a card that provides extra points or rewards for internet, cable, or phone may be a good option if the bulk of your utility costs come from these purchases.

However, you can also look for a card that offers generous rewards or cashback credit cards that provide a hefty percent back on every purchase — which can include all of your utilities. The Chase Freedom Unlimited® could work well. This credit card offers 5% cash back on travel purchased through Chase Travel, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and unlimited 1.5% cash back on all other purchases.

Just be aware you may be charged a fee to pay utilities on a credit card. This fee could be greater than the number of rewards you earn. Check with your service provider if you're concerned about fees.

How can you make your mortgage payments and insurance premium payments with a credit card?

Most mortgage companies, insurance companies, and other businesses selling financial products do not accept credit card payments. However, you can use a third-party service such as Plastiq, which allows you to make payments for almost anything you'd like with your card. Unfortunately, there's a fee to use these services. For example, Plastiq charges 2.9% for credit card payments. 

These fees can eat up the value of any rewards you were hoping to earn. However, it may still be worth using a card to cover payments in some circumstances, such as when you're trying to qualify for a sign-up bonus that has a minimum spending requirement.

What types of bills can you pay with a credit card?

Many bills can be paid with a credit card, including cell phone bills, gym memberships, and streaming services. Others, such as mortgage or rent and utility payments, usually can't be paid with a card directly because companies don't typically accept this method of payment.

In some cases, the companies you work with might accept a credit card payment only if you pay an added fee. There are also third-party services, such as Plastiq, that allow you to pay any bill you want with a card but charge an additional fee. When you have to pay fees to use your card, it might not be worth doing.

You also need to be careful about charging too much on your card, as you could end up with a credit card bill you can't pay off. Interest charges and late fees can get expensive if you don't make your monthly payments on time.

Credit cards we recommend for paying your utility bills

If you decide to go ahead and use a credit card to make utility bill payments, consider a general card that offers a flat rewards structure on every purchase.

For example, the Chase Freedom Unlimited® allows you to earn 5% cash back on travel purchased through Chase Travel, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and unlimited 1.5% cash back on all other purchases. So you could earn $60 worth of rewards at a 1.5% rate after spending $4,000.

Or the Capital One Venture Rewards Credit Card gives you 2 miles per dollar on every purchase, every day, 5 miles per dollar on hotels and rental cars booked through Capital One Travel and 5 miles per dollar on Capital One Entertainment purchases through 12/31/25. With $4,000 worth of utilities, you could get 8,000 miles — an $80 value you can redeem toward travel.

By shopping around for the best credit cards, you can find a card that works for you and helps you maximize your rewards.

Want to pay for more household expenses with your credit card? See how you could cover your rent, mortgage, or even student loan bills with your card.

Unlimited Cash Back


Chase Freedom Unlimited®

Current Offer

Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) — worth up to $300 cash back. That's 6.5% on travel purchased through Chase Travel, 4.5% on dining and drugstores, and 3% on all other purchases.

Annual Fee


Rewards Rate

5% cash back on travel purchased through Chase Travel, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and unlimited 1.5% cash back on all other purchases

Benefits and Drawbacks
Card Details

Author Details

Kat Tretina

Kat Tretina is a personal finance expert focusing on practical financial matters, including student loans, debt repayment, side hustles, insurance, and healthcare. Drawing from her personal experience, she aims to simplify complex financial topics and provide individuals with the information they need to make informed decisions.