Can You Pay Bills with A Credit Card?

You can use your credit card for a wide range of purchases, from buying groceries to shopping online. In some cases, credit cards may be used to pay bills. When done responsibly, you could potentially improve your credit score. But there are some possible downsides to consider.

Let’s take a look at how to pay bills with a credit card in a way that could benefit you.

What bills can you pay with a credit card?

Many bills can be paid with a credit card. However, some merchants and service providers may add a convenience or processing fee to do so, which may increase the total cost of the bill each month. If your credit card offers cash-back rewards, the rewards you earn could outweigh the cost of these fees. Be sure to check with your merchant or service provider to see if there are any fees associated with paying your bills with a credit card before you do so.

Here are some types of bills that you may be able to use a credit card to pay for:

• Utilities (electric, gas and water)
• Cell phone, internet and cable
• Streaming services
• Fitness memberships
• Medical bills
• Car insurance

While there are several types of bills that can be paid with a credit card, you generally can’t make loan payments with a credit card, such as:

• Mortgage payments
• Auto loan payments
• Student loan payments
• Personal loan payments (though some lenders may offer an exception)¹

While you can’t pay a mortgage with a credit card, there are circumstances where you may be able to pay rent with one.

If your landlord or property management company allows you to pay rent with a credit card, there may also be a processing or convenience fee to do so. Some third-party services let you pay with a credit card, and they’ll then forward the rent payment to your landlord. However, these services usually charge a fee.²

Pros and cons of using a credit card to pay bills

You know your finances best, so deciding whether it’s a good idea to use your credit card to pay bills is a personal decision. As you decide, consider these pros and cons:

Pros

If you have a clear plan to pay your balance off, there are some potential upsides to paying your bills and recurring subscription fees with a credit card.

Pay with convenience

Paying bills with a credit card can usually be done quickly and conveniently. Once you’ve used your credit card online to pay a bill, most websites offer the option to securely store your payment information, so you don’t have to enter it again next time. (Just be sure you’re not tempted to impulsively upgrade your service without reviewing your budget first.)

Some service providers may also allow you to set up automatic payments using a credit card. Automating payments is a convenient way to save time, manage your budget and avoid missing a due date. Some companies may even allow you to set a recurring monthly payment date that works for your cash flow.

Just remember that some bills, like water or electricity, may be higher or lower from month to month. If you choose to set up automatic payments, make sure your balance isn’t so close to your credit limit that you can’t afford these adjustments. If you go over your credit limit, you might be charged a fee. Check your cardholder agreement for details.

Earn cash back or other rewards

Check to see if your credit card offers rewards and how you can earn them. Some credit card companies offer a higher percentage of cash back for certain types of transactions. If you choose to pay your bills with a credit card to get cash back, consider using the card that offers the most cash back for the transaction.

Build a strong credit history

By actively making on-time credit card payments, you can build a positive payment history while covering expenses you were going to pay in full anyway. In turn, you could see your credit score improve, which may make lenders more likely to loan you money or offer a more favorable interest rate in the future.

Cons

There are some downsides to paying bills with a credit card. However, you may be able to avoid some of the potential drawbacks if you pay off your balance in full each month.

Potential to pay more in interest

When you pay a bill with your credit card, that amount gets added to your credit card balance. If you don’t pay off your credit card statement balance in full every month, you’ll owe the amount of the bill plus any interest that accrues, which can cost you significantly more in the long run.

Convenience fees

Some companies charge you a fee to pay bills with a credit card. In some cases, the fee is only a few dollars, but in others, it's a percentage of the amount you charge. For larger bills, you may end up paying a significant amount in fees.

Potential negative effect on your credit score

Paying bills with your credit card, on top of the purchases you’ve already made, could bring you too close to your credit limit, which may impact on your credit score. Your credit utilization ratio, or the amount of available credit you’re using, is an important factor in most credit scoring models. A high credit utilization ratio may affect your credit score over time.

If paying a bill with credit would push your card’s balance above 30% of your available credit, you might consider using a different payment method.³ For example, if your credit limit is $2,000 and you’ve already spent $600 this month on everyday purchases, paying a $100 heating bill with your credit card would increase your credit utilization ratio to 35%. In this case, you might consider paying your bill with cash, a check or your debit card.

Temptation to overspend

It’s never a good idea to use credit cards if doing so causes unnecessary spending or debt. Putting bills on a credit card might seem as if you’re freeing money for other expenses, but if you don’t pay the balance off right away, you’re only adding to what you owe. Over time, you could end up with more debt than you planned for.

How to pay bills with a credit card

The way you pay bills with a credit card depends on how the billing company or service provider accepts payments.

• Online: If you pay your bills online, you’ll add your credit card information to your account as a payment method. Once your credit card is added, you can pay your bill the same way you would make any other online purchase.
• Over the phone: To help protect yourself from fraud, only provide credit card information to merchants you call directly. A call from an unknown number could be a criminal pretending to be a service provider to access your personal information. If you make a payment over the phone, you’ll provide a customer service agent with your credit card information. After you pay, note the amount and confirmation number, then monitor your credit card account to make sure the payment matches.
• In person: You may also be able to pay your bills in person. Some providers may not have physical locations where you can pay, however, and others may only accept cash or checks for in-person payments.

---

---

Pay bills your way

Since everyone’s financial situation is different, deciding whether to pay bills with a credit card depends on your personal circumstances. If the benefits and convenience of using your card outweigh any potential drawbacks, paying bills with a credit card may be an option. If you’re working to pay down existing credit card debt, paying your bills another way may be a better fit for you.

This article has been updated from previous postings in 2018 and 2022. Matt Diehl and Melina Duffett contributed.

Sources

1 https://www.nerdwallet.com/article/credit-cards/pay-a-loan-with-a-credit-card
2 https://www.nerdwallet.com/article/credit-cards/pay-rent-credit-card
3 https://www.nerdwallet.com/article/finance/30-percent-ideal-credit-utilization-ratio-rule