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Bottom Line Up Front

  • Paying bills with a credit card can be a good way to earn rewards like cash back.
  • Some bills can’t be paid with a credit card, while others have a fee.
  • Keep your credit utilization in mind when deciding.

Time to Read

4 minutes

April 21, 2022

You may have always paid your bills by check, through a debit card or by automatic payment linked to a bank account. But have you wondered if your credit card might be a better way to pay? Read on to learn if paying bills with a credit card is right for you.

What bills can you pay with a credit card?

Bills that typically allow credit card payments include:

  • Insurance (car or home insurance)
  • Subscription services (like online streaming services)
  • Utility bills (electric, gas, water or trash removal)
  • Internet, cable and cell phone bills
  • Taxes

In general, loans (including student loans and auto loans), mortgages and rent aren't payable with a credit card. If credit card payments are allowed, the cardholder may be charged fees that could cancel out any potential benefits. Convenience fees may be one of these fees that credit card companies charge. It's always best to check with your credit card issuer for further details.

How should you pay if you can’t use a credit card?

When you can’t pay your bills using a credit card, you have several options with their own perks and downsides.

  • Direct debit: Also known as automatic debit, you may qualify for a lower interest rate with this payment method. Simply provide the merchant or service provider with your checking account information, and they’ll withdraw the necessary funds on the monthly due date.
  • Online bill pay: By giving your financial institution details on a lender or service provider, you can set up automatic payments using a bill pay schedule. Autopay is a great way to put all your bill pay information in one place, but it can take some time to set up.
  • Checks: They may not be automated, but because you need to write a check each time you make a payment, you can easily verify that you have enough money in your account first.

Pros and cons of paying bills with a credit card

ProsCons
Convenient—no need to mail in a checkIncreased utilization—experts suggest keeping your credit utilization below 30% to protect your credit score
Rewarding—earn cash-back rewards or rewards points if you have a rewards credit cardAdditional interest—you may be charged interest on your credit card bill if you don’t pay the balance in full
Consolidated—have all your expenses on one statementPotential fees—you may be charged a fee for using a credit card to pay certain bills
Credit-building—paying bills can help contribute to your credit historyNot always an option—some bills, such as rent, may not be payable with a credit card

Stay on top of your credit card balance

If you decide to pay bills using your credit card, it’s more important than ever to keep up with your monthly payments. Pay as much as you can on time each month to help minimize credit card interest payments and avoid fees, such as late fees.

Next Steps Next Steps

  1. Use a tool like Navy Federal's Card on File to connect your card with popular online merchants and manage your card info in one place via our app.
  2. Set up automatic payments for your credit card so you never miss a payment.

Disclosures

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.