Can You Pay Utilities With a Credit Card?

By Sarah Li Cain · April 15, 2024 · 7 minute read

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Can You Pay Utilities With a Credit Card?

If you’re wondering whether you can pay utilities with a credit card, the answer is likely yes. In many situations, you can break out the plastic and charge your electricity, wifi, phone, and other basic expenses.

That said, while using a credit card as your payment method may be the most convenient option for you, there are some factors to consider to make sure you are doing what’s best for your overall financial picture. While it can help you build credit, some bill processors may charge convenience fees. If you carry a balance on your credit card, you may end up paying interest as well.

In these ways, it may not be the most economical nor the most financially wise move to make. Read on to learn how to size up this situation and decide how to pay your utility bills.

What Bills Can You Pay With a Credit Card?

You typically can pay for most bills using your credit card. Some of these include:

•   Rent

•   Car insurance

•   Medical bills

•   Cell phone bills

•   Internet fees

•   Cable

•   Utilities (like electricity and sewage)

•   Subscription and streaming services

•   Taxes

Recommended: How to Build Credit With a Credit Card

Pros and Cons of Using a Credit Card to Pay Bills

Paying utilities with a credit card may seem like a great choice, there are some risks and downsides. Even if the answer to “Can you pay a utility bill with a credit card?” is yes, it may not be the best move. Consider these pros and cons before making your decision.


First, consider the benefits of using a credit card to pay your utility bill:

•   Potential to build credit score: Most credit cards report your payment activity to all three major credit bureaus — Experian, Equifax, and TransUnion. Paying consistently on time is one of the main factors that could help build your credit score.

•   Earn rewards: Using a cash back or rewards credit card to pay utility bills could help earn a percentage back on your spending or points toward, say, travel. Some cards may earn you higher rewards than others.

•   Help meet reward signup bonuses: Some credit cards offer a sign-up bonus if you can meet a certain spending requirement within a predetermined amount of time. Since you need to pay utilities every month anyway, charging it on a credit card can get you closer to the minimum spending requirements.

•   Convenient way to track spending: By putting your utility payments in your credit card, you can track it through your credit card statements each month, or when logging into your account online.

•   Easily dispute payments: Say you accidentally pressed the payment button twice, or there are some suspicious charges on your utility bill. Using a credit card means you can dispute it through your credit card issuer.

•   Can set up automatic payments: Depending on your utility company, you may be able to authorize automatic credit card payments. It could be helpful to ensure you pay utilities on time.


Next, review the potential disadvantages of breaking out your plastic to pay your utility bills.

•   Could negatively affect your credit score: Not paying your credit card bill on time could mean your score takes a dip. Plus, if you use your credit card for more than just utility payments, racking up a large balance could affect your credit utilization ratio (the percentage of available credit you’re using on revolving credit accounts). Higher credit utilization could signal to credit scoring agencies and lenders you need to rely on credit in your financial life. As such, could lead to negative affects on your credit score.

•   Potentially pay fees: Some utility companies charge a convenience fee, which is typically a percentage of your bill amount. In most cases, this fee is to help offset the processing fees charged by credit card companies. The cost may not be able to offset any rewards you earn. Fees can also easily add up if you regularly use your credit card for utility payments. Consider carefully whether this payment method is the best financial choice.

•   Possible interest charges: Aside from potential negative effects on your credit score, you’ll end up paying interest on any balances you carry from month to month. Often, the rates are in the double digits and higher which means you end up paying more overall for your utilities.

Recommended: Does Paying Utility Bills Build Credit?

Should You Pay Bills With a Credit Card?

Paying bills with a credit card can be a smart choice if you’re looking to build your credit and earn rewards. It does mean you need to be mindful of your credit behavior before doing so, or else you could face consequences such as excessive fees and interest charges.

For instance, perhaps you consistently pay your credit card bills each month (ideally the entire balance) and like the buffer you get between the grace period and when the payment is due.

In this case, you may be able to reap the benefits of using a credit card. However, if you get charged a convenience fee each time (and you have multiple bills to pay) and can only afford the minimum credit card payment, then you may want to reconsider using credit cards.

Whatever your choice, be sure to check the terms of your credit so you know when your due date is and other charges such as the interest rate and late fees.

How to Pay Utilities With a Credit Card

There are several options to pay utilities with a credit card, including directly through the utility company or through a third-party processing company. Each option typically asks you to sign up for an account online and verify information such as your address and other personal details. To pay, simply follow the prompts presented to you on the screen. There may be an option to select to charge your utility bills each month automatically.

Before pressing the “submit” button, look for information indicating any convenience fees you’ll pay in dollar amounts. Some utility companies also accept credit card payment by phone — call to check to see if this is an option for you, if you like. You want bill pay options to suit your needs, not just those of service providers.

Recommended: How to Pay Your Bills When You’ve Lost Your Job

How On-time Utility Payments Can Improve Your Credit

Utility payments aren’t directly reported to the three major credit bureaus, so they don’t necessarily have an effect on your credit. However, if you use a method of payment that does report to the credit bureaus — like credit cards — then it could have an effect.

For instance, if you consistently make on-time credit card payments, credit bureaus will report the positive behavior. Credit scoring agencies may look at this behavior more favorably and build your score as a result.

There are some credit bureaus that report your utility payments, but not all do. If you need the answer, you can look at your annual free credit report to learn more.

Tips to Paying Bills With a Credit Card

Whenever you pay by credit card, you’ll want to use your plastic responsibly and carefully. This holds true for paying utility bills by credit card, too. Here are some pointers.

•   Monitor your bank account to ensure there’s enough money when you pay your credit card bill, or you could risk overdraft or NSF fees.

•   Be sure to make at least the minimum credit card payment to prevent late fees and negative impact on your credit report.

•   Check to see whether any convenience fee is worth it or is offset by any rewards you earn.

•   Watch your credit utilization to prevent it from going too high.

•   Monitor your credit card transactions, and report any fraudulent activity.

The Takeaway

In many cases, you can pay for utilities with a credit card. But you’ll need to weigh whether this is the best move for you. It might be a way to conveniently take care of bills, earn rewards, and build your credit. Or it could lead to more credit card debt, interest payments, and convenience fees.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.


Is it better to pay utilities with a credit card or bank account?

The choice to pay with a credit card or bank account depends on your financial situation and preferences. There are benefits to using a credit card such as earning rewards and tracking your payments, but you may have to pay a convenience fee for the privilege. And you could accrue more high-interest debt if you can’t pay the full balance each month.

Can I pay my mortgage and utilities with a credit card?

In most cases, you can pay your utilities with a credit card. Unfortunately, most mortgage companies don’t allow you to pay your monthly payments with a credit card. There may be third-party processing companies that allow you to do so, but you’ll most likely pay a convenience fee.

Is paying a bill with a credit card considered a cash advance?

No, paying a bill with a credit card isn’t considered a cash advance. However, some aspects of using payment apps, like PayPal and Venmo, may be treated that way.

Photo credit: iStock/miniseries

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