When Does it Make Sense to Pay a Bill with a Credit Card?

Noble Credit Union offers rewards cards that cost less and earn more than big banks, as they often charge annual fees and have high interest rates. (Envato Elements)

Credit cards and debit cards both offer incredible convenience. With just a quick swipe or a linked account, payment can be instantly processed. It seems like a no-brainer to use that convenience for taking the hassle out of paying bills. But, is it a smart idea to pay monthly bills with a credit card or debit card?

Let’s take a closer look at the pros and cons of paying monthly bills with a credit card or debit card.

The advantages of paying bills with a credit card or debit card

There are many reasons you may want to pay your monthly bills with a credit or debit card:

Automate monthly payments. Setting up automatic payments for monthly bills through a credit card or debit card will help ensure payments are always on time.

Build credit with a consistent monthly payment. Using a credit card for a monthly bill is a great way to amp up a credit score without running the risk of overspending. Just be sure to pay the bill in full and on time every time.

Earn rewards for money that needs to be spent anyway. Using a credit card that offers rewards for a bill that needs to be paid anyway will help to pile on those rewards points without overspending.

Enjoy consumer protection. Paying with plastic offers the consumer the advantages of purchase protection, zero or minimal liability in case of fraud, guaranteed returns, and more.

Pay your bills quickly without the hassle of writing out checks and using snail mail. With a credit or debit card, paying a bill only takes a few clicks or phone prompts.

Budget easily. Paying with a credit or debit card makes for easy tracking of monthly spending.

Payments post promptly. Bill payments made via credit or debit card will generally post within one or two business days.

The disadvantages of paying bills with credit or debit cards

Here’s the flip side of paying bills with plastic:

There may be fees for paying the bill with a credit card.  Some service providers charge a processing fee for paying with a plastic card.

It can make a difficult financial situation worse. For consumers who are already carrying a sizable amount of debt, it may not be the best idea to charge a monthly bill to a credit card. Similarly, it isn’t responsible to set up an automatic monthly payment through a debit card that is linked to an account that may not have enough money to cover the charge each month.

Interest may accrue. Consumers who cannot pay their entire credit card bill each month would be saddled with more accrued interest than they can afford if they choose to pay their monthly bills with a credit card.

Which of my bills can I pay with a credit or debit card?

You will likely not be able to pay a mortgage, rent, or car payments with a credit or debit card.

Car insurance, home insurance, health insurance, and taxes can usually be paid with a credit card, but you may need to pay a fee to do so.

Other bills such as subscription services, or phone, utility, cable, and Internet providers usually allow you to pay with a credit card or debit card without a fee.

The bottom line

Sometimes, paying bills with a credit card or debit card makes perfect financial sense, but it sometimes does not. Before deciding which way to go on any particular bill, consider all the relevant factors detailed above to be sure you’re making the responsible choice.

Looking for more information?  Stay informed by visiting Noble Credit Union’s blog at www.blog.noblecu.co.  Noble Credit Union, voted one of the best credit unions in California, offers offer members full access to a wide range of financial services, including MyRewards Visa credit card, mortgage and equity loans, new and used vehicle loans, online and mobile banking, and more. For more information about membership at Noble Credit Union, call (559) 252-5000 or visit NobleCU.com.

Noble Credit Union is located on 175 N. Clovis at the corner of Palo Alto and Clovis Avenues. (Courtesy of vadymvdrobot/Envato Elements)