Bills commonly paid with a credit card include internet, phone, cable TV and streaming services since these providers don’t typically charge a convenience fee.
While paying your bills with a credit card can offer the convenience of paying instantly or setting up automatic payments and earning you potential perks (you often have a grace period and may even earn rewards points), it may not always make sense to do so. For starters, not all businesses allow you to pay with a credit card. When some companies do allow it, they may charge you a convenience fee or surcharge because both credit card and debit card transactions cost them money to process.
So even if you have the option to pay your bills with a credit card, you may want to consider the potential downsides as well — such as if the company charges high fees, if you already have significant credit card debt or if you have concerns about paying the balance off by the due date.
This article provides guidance on which bills you can pay by credit card and what to consider when choosing between credit cards and other bill payment methods.
Some merchants may consider credit cards a nonstandard way to pay your bills, and credit card payments cost companies money to process. That’s why you may see a convenience fee or surcharge when you opt to pay by card instead of cash or check. However, if it is commonplace to pay by credit card in a certain industry or business (such as everyday purchases in grocery stores), the company may not pass the fee on to you.
Service providers may allow you to pay bills with a credit card, but any of them could tack on convenience fees or other surcharges to offset their costs in the transaction. If you choose to pay rent using a credit card, for example, you could incur an extra fee for the payment to be processed through a third-party service. If you pay $900 in rent, a 2.5% convenience fee for using a credit card would make your monthly payment $922.50.
Depending on your unique financial situation and the specific bill involved, it may make sense to use a credit card. Below, we cover some common situations where you would consider using your credit card over other forms of payment. You may find the following guidelines useful when evaluating the best payment method for paying bills.
The best credit cards to use when paying bills are ones on which you don’t carry a balance and also pay the balance in full by the due date. Then you can take advantage of rewards and other perks without the drawbacks of paying interest.
Paying off your balance in full allows you to avoid credit card interest charges and lowers your credit utilization ratio (CUR) (the revolving debt you owe divided by the total amount of your revolving credit limits).
Before paying a bill with a credit card, make sure that you can afford to pay everything you owe by the due date. If you can’t even pay the minimum payment, you’ll be charged late fees in addition to the interest on the balance.
Depending on your card’s program, putting a large bill on a credit card may help you gain rewards points quickly, especially with premium cards, and may pay off in cash back if you pay your balance by the due date (thereby avoiding additional charges). Before deciding to pay a bill with a credit card solely for the perks, remember to consider fees, interest rates and other charges to make sure it makes sense.
In other situations, it may make more sense to select another form of payment. The following considerations may help you decide when using a credit card to pay your monthly bills may not be the best choice.
When you don’t pay off your credit card bill in full each month, interest charges can add up fast. Furthermore, carrying a large balance can impact your CUR, eventually affecting your credit. While you may have a bill that’s so large you can only afford to put it on a credit card, make sure that you can at least make the minimum monthly payment. Failing to do so can result in late fees, impact your payment history and potentially impact your credit score.
Remember to calculate convenience fees and surcharges when deciding if it makes sense to use a credit card. Any rewards or cash back you may earn can quickly disappear. If you get 1% cash back on a $1,000 rental payment made by credit card, for example, you receive a $10 reward. If your landlord charges a $15 convenience fee, however, you actually end up losing $5 if you pay with a card. In this case, you may spend smarter by choosing another form of payment.
If you already have high credit card debt, paying bills with a credit card might not be the best decision. You may want to avoid taking on additional debt until you get a better handle on your personal finances by making a budget, negotiating with lenders, talking to a credit counselor and/or working down your debt before adding another bill.
Look at your monthly spending and bills, determine which budgeting categories you’re spending too much in, separate necessary from unnecessary expenses and see if you can make cuts to reduce your debt load. Taking stock of your bottom line can help you weigh the pros and cons of using a credit card to pay your bills., 
Creating a budget can help you avoid taking on additional debt or simply get yourself into a better financial situation. If you have already accumulated a fair amount of debt, the following suggestions may help get your finances back on track.
Although you can pay several types of bills with a credit card, that doesn’t always mean you should. Any smart financial decision involves weighing the pros and cons of each option. If you need help getting on the right path, Self’s products may help you save money, build credit and establish positive financial habits.
Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a Bilingual Personal Finance Writer and Educator dedicated to helping populations that need financial literacy and counseling. Her informative articles have been published in various news outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal financial and motivational site www.AcetheJourney.com and translated into Spanish the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP. Ana teaches Spanish or English personal finance courses on behalf of the W!SE (Working In Support of Education) program has taught workshops for nonprofits in NYC.
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