Can You Pay Utilities and Other Bills With a Credit Card?

Using a credit card for regular expenses can be convenient. You may also have the option to use your credit card to pay utilities and other bills, allowing you to navigate unexpected expenses and even earn points, miles or cash back on these charges, depending on the credit card. However, you may also have to pay fees or surcharges to use a credit card that may outweigh these benefits.

Let’s explore the types of utilities and bills you can pay with a credit card, pros and cons of doing so and when this option makes sense.

What types of bills can be paid with a credit card?

You may be able to use your credit card to pay a variety of bills and utilities (like electricity, water, gas, cable, internet and your phone bill), subscription services (such as streaming platforms, software subscriptions and memberships) and even insurance premiums.

However, before you use your credit card to pay your bills, check with the individual vendor regarding their policies and fees. Certain expenses, like rent or mortgage payments, generally can’t be directly paid with a credit card.

Benefits of paying utilities and other bills with a credit card

Paying a bill with a credit card can offer certain advantages.

Earn reward points, cash back or miles

If you use a rewards credit card to pay bills and utilities, you could earn points, miles or cash back on qualifying charges. Let’s say you have a credit card that offers 2% cash back on all purchases and your average monthly electricity bill is $75. By paying the bill with that credit card, you could earn $18 in cash back over a year.

Make budgeting simpler

Using your credit card to pay recurring expenses can help you budget. Credit card statements provide a detailed record of your purchases, which could be a helpful tool for tracking expenses and identifying spending patterns.

Improve your creditworthiness

Lenders like to see that you’re managing your existing credit well, and that’s reflected in your credit score. Charging bills and utilities to your card — and then consistently paying off your full statement balance on time — can help build your credit score. Signing up for automatic payments for your credit card may help make this process easier.

Help you manage financial speedbumps

If an unexpected expense pops up and you need to make ends meet, you may be able to use your credit card to pay your utility and other bills to get you through. That can help you ensure that your necessities are covered and you won’t have to deal with issues like late fees or interrupted service.

Drawbacks of paying utilities and other bills with a credit card

There can also be downsides when using your credit card to pay for bills and utilities.

Credit card interest charges

If you don’t pay off your credit card statement balance each month in full, you’ll generally be charged interest. The interest charges may outweigh the benefits and convenience of using a credit card.

Service fees from vendors

Some vendors may charge fees for credit card payments. These can add up, especially for large, recurring bills, and cancel out the advantages of using your card. For example, if a vendor charges a 2% fee and you only earn 1% cash back, it might not be worth it to pay with a credit card.

Negative credit impact

If you don’t pay off your full statement balance each month, using your credit card to pay utilities and other bills can increase your credit utilization, which is the percentage of your total available credit currently in use. High credit utilization can negatively affect your credit score.

Is paying utilities and other bills with a credit card a good idea?

Making payments with a credit card can be a good strategy, particularly if the vendor does not charge an additional fee for using a credit card. It could help you earn points and keep better track of your finances. Or, if you’re in a temporary financial bind, and you can pay off those charges relatively quickly, it may be a useful option.

However, if the vendor charges a fee and you have other payment options, using a credit card may not make sense. Either way, keeping an eye on your bank and credit card accounts and continuously monitoring your spending can help you keep your finances on track.

Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.