Making purchases with a credit card can help you earn valuable cash back, miles, or points — and those rewards can offset the cost of credit card bills, cover travel expenses, pad your savings, and more.

While swiping your card at the grocery store or gas station is simple, paying your monthly bills with a credit card can be more complicated. Before you start, there are a few caveats to be aware of.

Here’s what to know about paying bills with a credit card, the perks and drawbacks of doing so, and how it could impact your credit.

What bills can I pay with a credit card?

You can pay certain bills with a credit card. The following service providers usually accept credit cards as a form of payment:

• Utility companies

• Cable and internet services

• Streaming services and subscriptions

• Home and auto insurance

• Medical bills

• Cell phone providers

That said, you generally won’t be able to pay the following bills with a credit card — though there may be some workarounds:

• Rent payments

• Mortgage payments

• Auto loans

• Student loans

Third-party services such as Plastiq could enable you to pay your mortgage or auto loan lender with a credit card. But the process can be complicated and fees typically apply, so it’s not always worth it to use your card.

In addition, there are some specialty options that may allow you to pay these bills with a credit card. The Bilt Mastercard, for example, is a rewards credit card specifically designed to make rent payments.

Read more: Can I use a credit card to pay my mortgage? and Can you pay rent with a credit card?

Pros of paying bills with a credit card

Using your credit card to cover your monthly bills can come with some perks, but there are also added risks to consider. Weighing the pros and cons can help you decide if it makes sense for your situation.

Earn rewards on regular spending

If you pay your bills with your credit card, you can rack up rewards faster. Say you have a cashback card that earns 2% on all your spending, and you put $1,000 worth of monthly bills on your card. That’s an extra $20 a month in rewards.

Using your card for bills could also help you meet a minimum spend to earn a generous welcome bonus. Many rewards cards come with welcome bonuses worth hundreds of dollars, and paying for your recurring monthly costs could make these bonuses easier to earn.

Build credit

Another perk of paying bills with a credit card is the opportunity to build credit. This can be helpful if you have a thin credit file or have struggled with maintaining credit in the past. Covering your bills this way could help you develop a positive payment history, provided that you don’t miss credit card payments or pay late.

Ensure on-time payments

If you struggle with remembering to pay your bills, setting up automatic payments on your credit card could make it easier to pay on time. And if you don’t typically keep a lot of money in your checking account, using a credit card could help you avoid unintentionally missing an automatic payment or incurring fees due to insufficient funds.

Cons of paying bills with a credit card

While there may be some perks associated with using a credit card to pay for your monthly bills, there are some downsides, too.

Added fees

Service providers might charge a convenience fee for paying with a credit card. This fee could be a set dollar amount or a percentage of your total bill, depending on the policy. If the fees associated with this payment method outweigh any potential rewards, paying via a checking account likely makes more sense.

If you’re thinking about paying bills using a credit card, review the service provider’s policy to determine which fees, if any, will apply.

Higher credit utilization

Your credit utilization — the amount of revolving credit you’re using compared to your available credit limit — can have a significant impact on your credit score. Charging your monthly bills to your card could increase your credit utilization, even if you pay your balance in full every month.

This could harm your credit, as popular credit scoring models reward you for a lower credit utilization. The amount you owe accounts for 20% of your VantageScore and 30% of your FICO score.

Interest charges

Likewise, if you’re not paying off your full balance each month, paying your bills with your credit card could increase your interest charges. Since credit cards typically have high rates, often up to 29.99%, your interest charges could add up quickly.

Read more: Current credit card interest rates

Can paying bills with a credit card hurt your credit score?

Paying bills with a credit card could harm or help your credit score; it depends on your spending and payment habits. If you consistently pay off your full credit card balance on time, paying with a card could work in your favor. Your positive payment history will likely boost your credit score over time.

By contrast, if you typically make the minimum payments on your card, paying your bills with a credit card could hurt your score — and cost you money. The added expenses on your card will increase your credit utilization, and if you aren’t making full payments, you’ll also pay more in interest.

How to pay bills with a credit card

If you’ve decided to pay your bills with a credit card, it’s time to get started. Your next step will depend upon your preferred way to pay. You might be able to pay certain bills in person, via phone, or online. Here’s a sample process for paying online:

1. Log into your account

2. View your billing options and review any added fees

3. Designate “credit card” as your preferred payment method

4. Enter your card’s information to make a one-time payment, or set up autopay if you’d prefer

Using a credit card to pay your regular bills could come with some perks, including more rewards and a better credit score if you use your card responsibly. But this payment method also comes with some drawbacks, including convenience fees — and possibly a higher credit utilization and more interest costs. Consider rewards vs. fees and your credit card payment habits to determine if paying bills with a credit card makes sense.

Frequently asked questions (FAQ)

Is it a good idea to pay your bills with a credit card?

Whether it’s a good idea to pay your bills with a credit card depends on several factors. Consider potential rewards, fees, how much of your available credit you’re using, and your payment habits before determining if this payment method makes sense for your situation.

Which bills cannot be paid with a credit card?

You generally cannot pay your mortgage, rent, auto loans, student loans, or other types of loans using a credit card. While there may be services such Plastiq that allow you to do so, the cost of using these services might exceed the total credit card rewards you earn.

Can you pay your car insurance with a credit card?

Yes, you can usually pay your car insurance premiums with a credit card. Contact your insurance company to determine if this is an option, and if so, which fees might apply.

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