At O1ne Mortgage, we prioritize helping our clients make informed financial decisions. One such decision involves whether to pay utility bills with a credit card. This article explores the pros and cons of this payment method and how it can affect your credit score. For any mortgage service needs, feel free to call us at 213-732-3074.

What Utilities Can You Pay With a Credit Card?

While payment options may vary depending on your utility provider, you can usually pay the following utility bills with a credit card:

• Phone or cellphone bill
• Internet bill
• Cable bill
• Water bill
• Electric bill
• Gas bill

Pros and Cons of Paying Utility Bills With a Credit Card

Pros of Paying Utilities With a Credit Card

Using a credit card to pay your utility bills can offer several benefits:

• Earn Rewards: Many credit cards offer rewards such as points, miles, or cash back for your spending.
• Purchase Protection: Some credit cards provide purchase protection for items paid for with the card, such as damage or theft protection for your cellphone.
• Qualify for Welcome Bonuses: Using a new credit card to pay utility bills can help you meet the spending requirements for welcome bonuses.
• Ensure Payments Go Through: Automatic payments with a credit card can prevent missed payments due to insufficient funds in your checking account.
• Simplify Disputing Charges: Disputing a charge on a credit card is often easier and faster than with a checking account.
• Boost Your Credit Score: Regular, on-time payments can help build a solid credit history.

Cons of Paying Utilities With a Credit Card

However, there are also some drawbacks to consider:

• Convenience Fees: Some utility providers charge a fee for credit card payments, which can add up over time.
• Credit Score Impact: High utility charges can increase your credit utilization ratio, potentially lowering your credit score.
• Interest Charges: If you don’t pay your credit card balance in full, interest can accrue, making it harder to pay off your balance.

How to Pay Utilities With a Credit Card

You can typically set up automatic payments for your utility bills on the utility provider’s website or by calling the company. Some providers accept credit card payments directly, while others require you to go through a third-party processor, such as Plastiq. Be sure to understand all the fees involved before setting up automatic credit card payments.

How On-Time Utility Payments Can Improve Your Credit

Utility providers don’t usually report your payments to the three major credit bureaus (Experian, TransUnion, and Equifax). However, on-time utility payments can still help improve your credit score through services like Experian Boost®, which allows you to add utility accounts to your Experian credit report. This can potentially boost your credit score by reporting only on-time payments.

The Bottom Line

Paying utility bills with a credit card can offer several benefits, but it’s essential to keep an eye on your credit card balances to avoid negatively impacting your credit score. For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team is here to help you make the best financial decisions for your future.