Should I Pay Bills with Credit Card or Bank Account

Paying bills can be a hassle, but making the right choice can save you money and stress. Using a credit card to pay bills can provide rewards and benefits, such as earning points or cashback on purchases.

However, paying with a bank account is often a more straightforward and cost-effective option. According to the article, using a credit card can result in higher interest rates and fees, especially if you're not paying off the balance in full each month.

On the other hand, paying with a bank account allows you to avoid interest charges and fees, making it a more budget-friendly choice. This can be especially important for those who struggle to pay off credit card debt.

Ultimately, it's essential to consider your financial situation and goals before deciding whether to pay bills with a credit card or bank account.

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You have options when it comes to paying bills, and some of them might surprise you. You can pay bills with a credit card, but it's not always the best choice.

Some providers, like cable and internet companies, utility companies, and cellphone providers, typically allow credit card payments with a service fee. You'll need to weigh whether the extra cost is worth it. For example, you might pay an extra 2% to 3% to use a credit card for your electric or gas bill.

However, not all providers accept credit card payments, and some might charge a convenience fee. You can't pay your landlord, mortgage lender, or auto lender with a credit card. Student loan providers also don't accept credit card payments.

If you want to pay a bill with a credit card, you can use a third-party company like Plastiq, but be aware that they charge a minimum 2.9% fee per transaction. You might earn credit card rewards, but you'll also pay a convenience fee.

Here are some providers that typically allow credit card payments:

And here are some providers that don't accept credit card payments:

It's always a good idea to check with your provider to confirm their payment options and fees.

Paying bills with a credit card can offer a range of benefits that might not be immediately apparent.

You can earn points or miles toward travel to help pay for your next trip by putting a monthly bill on your credit card. This is especially true if you have a rewards card that offers cash back or travel rewards.

Some credit cards will reimburse you for a lost, stolen or damaged cellphone if you pay your cellphone bill with the card. This is just one example of the purchase protection that comes with using a credit card.

Paying even one monthly bill with the credit card will keep your card active and your account open, even if you don't use the card for anything else. This can help keep your credit history intact and positively affect your credit score.

Putting utilities, internet service, your cell phone bill, and auto insurance on a credit card can net you cash or travel rewards for spending on bills you have to pay anyway. This is especially true if you have a rewards card.

You can earn a lot more cashback, airline miles, or hotel points for stuff you were going to pay for anyway by using a rewards credit card to pay those monthly bills. Just be sure to pay your balance in full every month to avoid interest charges.

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Paying bills with a credit card can have a significant impact on your credit score.

Using a credit card to pay bills can hurt your credit score if you run up a balance and don't pay it off, or if your credit utilization ratio is too high.

Paying bills with a credit card can help your credit score if it helps you pay on time, keeps a long-standing credit account open, or if you're new to credit and can make payments in full and on time.

Some providers allow you to pay bills with a credit card, including cable and internet companies, utility companies, cellphone providers, subscription services, auto and home insurance companies, and health insurance providers.

However, you can't pay the following providers with a credit card: landlords, mortgage lenders, auto lenders, and student loan providers.

Here are some examples of bills you can pay with a credit card:

Keep in mind that some providers may charge a service fee for paying with a credit card, which can add up quickly.

Digital Payment is a convenient way to pay bills, and you can use a credit card to make payments to various providers. Cable and internet companies, utility companies, and cellphone providers typically allow credit card payments.

Some providers may charge a service fee, which is usually a percentage of your payment. You'll need to weigh whether the extra cost is worth it. For example, Plastiq charges a minimum 2.9% fee per transaction.

Paying bills with a credit card can be easier than writing checks, as you can log on to the provider's website and fill out the information online. This can also result in the payment posting right away, rather than a few days later if you mailed a check.

To confirm which monthly bills you can pay with a credit card, visit your provider's website or contact the company for your payment options. If the provider allows credit card payments, make sure you know what fees to expect.

The following providers typically allow credit card payments:

However, you can't pay the following providers with a credit card:

Online payment is a convenient option for managing your bills. You can use online bill pay services offered by banks and credit unions for free.

To use online bill pay, log in to your bank account online or in the banking app and add billing information for the companies you plan to pay. This will allow you to schedule payments manually or set up recurring payments for the same amount each month.

Online bill pay can even be used to pay vendors that don't accept electronic payments. The bank will send a check to the company for you and pay for postage.

Here's a comparison of online bill pay and autopay:

Keep in mind that online bill pay can be scheduled for the next business day or even the same day, but payments requiring a check take longer to process.

Online payment options offer many benefits, but it's essential to consider the pros and cons before making a decision.

One of the main advantages of online bill pay is that you can easily manage your bills, check your bank balance, transfer funds, and more all in one place.

This convenience can save you time and effort, allowing you to focus on other important tasks. You can also automate recurring online bill payments or schedule payments manually each month, giving you control over your finances.

However, online bill pay also has some drawbacks. For example, you may need to manually log in to your account each time you want to make a payment, which can be a hassle if you have multiple bills to pay.

Here are some key points to consider:

Automatic payment options can be convenient, but they also come with some drawbacks.

One of the main benefits of automatic payments is that they can help improve your credit score by preventing late or missed payments.

However, automatic payments can also lead to unexpected charges if your bank account becomes overdrawn due to insufficient funds.

You may need to pay a fee to pay a bill with credit, which can be a significant additional cost.

Automatic payments can be set up to recur even if you cancel a service or don't have a bill due that month, so be sure to review your payments regularly.

To avoid overdrafts and fees, make sure you have enough funds in your account to cover all automatic payments.

If you do become overdrawn, you may face late fees from creditors and non-sufficient fund fees from the bank, which can add up quickly.

Here are some things to consider when setting up automatic payments:

Online bill pay offers several advantages. You can easily manage your bills, check your bank balance, transfer funds, and more all in one place.

One of the benefits of online bill pay is that service providers or creditors don't have access to your bank account information. This adds an extra layer of security to your online transactions.

Consider reading: Bill.com Credit Card Fees

You have control over whether to automate recurring online bill payments or schedule payments manually each month. This flexibility allows you to tailor your payment schedule to your needs.

Online bill pay can even be used to pay vendors that don't accept electronic payments. This is made possible by third-party companies like Plastiq that allow you to pay with a credit card.

Some providers that accept credit card payments via third-party companies include cable and internet companies, utility companies, cellphone providers, and subscription services such as streaming services or gym memberships.

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