Sunday, January 29, 2023

How To Use Credit Card To Pay Bills

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Having your monthly bills paid with your credit card automatically can be an excellent use of your access to credit, because it ensures that you’re paying your bills on time, and possibly earning reward points in the process.

But it only really works in your favor over the long term, if you make sure that you’re paying off your entire credit card balance at the end of each month. If possible, set up automatic payments so that you can keep up with payments each month and make sure to monitor your balance to ensure it does not accumulate to more than you are able to pay off.

Using Credit Cards Abroad

Travel credit cards are designed for overseas use, and their benefits often include:

  • No charge for cash withdrawal abroad
  • No fees when you use it for purchases overseas
  • Good foreign exchange rates
  • Purchase protection if you use them abroad

However, they usually come with high APRs, so paying them off in full as soon as the statement arrives is important if you can.

Wells Fargo Propel: Best For Cellphone Payments

If you hold a Wells Fargo Propel credit card* and pay your monthly cellphone bill on it, you will have free cellphone insurance provided by Wells Fargo. The protection will cover the cardholder for theft or damage to a cellphone. This card offers up to $600 of protection, subject to a $25 deductible.

This no-annual-fee card has an impressive rewards rate of 3 points per dollar on dining, travel, gas station purchases, ride-shares, car rentals and select streaming services, and there is no spend cap on these 3 point-per-dollar bonus categories. Cardholders will also earn 1 point per dollar on other eligible purchases. Cardholders can redeem these points through the Wells Fargo Go Far Rewards site for things like travel, statement credits or gift cards.

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Choose Credit Card As Your Payment Method

There will sometimes be an option to choose the type of credit card youre using, e.g. Visa, Mastercard, Discover, American Express, or a store credit card. If your credit card processor isnt listed in the box, the merchant doesnt accept that type of credit card. Youll have to use another type of credit. Youll encounter this more often with American Express and Discover than Visa or Mastercard.

Which Bills Can I Pay With A Credit Card

How Do Credit Cards Work?

You can typically pay the following bills by credit card. Check with your providers to find out whether they charge a convenience fee to process your credit card payment. And look at the company’s website or your paper statement to see what your options are.

  • Utility providers
  • Cell phone providers
  • Subscription services

Typically, the following providers do not allow you to pay by credit card or charge fees for you to do so. Exceptions exist, however, so check with your providers if you’d like to pay these bills by credit card.

  • Mortgage companies
  • Auto and home insurance companies
  • IRS and state tax collectors
  • Student loan providers

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When Should I Use A Checking Account To Pay My Bills

Not all lenders or utility companies allow people to pay their bills with a credit card. Your landlord will probably not accept a credit card, and if they do, you’ll likely be charged a processing fee of 3% or so. That will almost always negate any rewards you might see from the card. A $1,000 rent payment could net you $20 in rewards with a 2% cash-back credit card, for example, but cost $30 in fees.

Sometimes paying with a checking account can actually save you money. Some providers offer a discount when you pay with a checking account, because they don’t have to pay for credit card processing. Call and ask if your service provider offers an incentive for paying in cash.

Bill autopay offers another advantage to using your checking account to pay bills. If you tend to pay bills past their due date, autopay helps you stay current and avoid late fees.

In addition, paying your bills through your checking account’s bill pay function may soon allow you to improve your credit score. Experian Boost is new tool that can track your utility and telecom payments and, if you show positive payments for at least three months, you’ll likely get an immediate boost to your credit score. Visit now to register.

Want to instantly increase your credit score? Experian Boost helps by giving you credit for the utility and mobile phone bills you’re already paying. Until now, those payments did not positively impact your score.

Create A Budget And Stick To It

The more money you can pay toward your credit card debt each month, the faster you’ll eliminate what you owe.

If you don’t already have a budget in place, start by writing out your average income and expenses over the past few months. Categorize each of your expenses to get an idea of exactly where your money is going. Then you can pinpoint areas where you can cut back and repurpose those dollars for debt reduction.

If you’re living paycheck to paycheck, this step can be tough. Even if it’s just a few dollars extra a month, though, it can make a difference in the long run. Do what you can to create a budget and continue looking for opportunities to earn or save more in the future.

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Can I Negotiate My Debt With The Credit Card Company

Negotiating your own credit card debt could be a better choice than a less-reputable debt settlement company. Debt settlement companies may advise you to stop making your minimum credit card payments which can result in late fees, a higher penalty APR and ultimately more debt to negotiate. Many debt settlement companies are also for-profit, meaning they operate to make money off of you, not to resolve your debt.

If you dont think working it out on your own with your credit company is right for you, choose a reputable debt settlement company, ideally either a non-profit or one that fully discloses any and all fees.

Reduce The Carrying Cost Of Your Debt

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This is the main reason its great to use a line of credit to pay off credit card debt. Typically, lines of credit have much lower interest rates than credit cards, which will reduce the overall carrying cost of your debt.

For example, a $5,000 balance on a credit card at 20% will cost you $1,000 per year in interest. On a line of credit of 6%, the same balance it will only cost you $300 in interest. The $700 you save not paying interest can help you actually make a dent in your debt and start paying it down.

To qualify for the lowest interest rate possible, you need to have the highest credit score possible. You can check your credit score and get your credit report for free with Borrowell.

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What Is The Best Credit Card For Utilities

Cant decide yet? Lets trim down your choices. Heres our recommendations for those looking for the best credit card to pay bills.

  • Best overall and for earning cashback on utilities: Security Bank Complete Cashback Mastercard
  • Best for earning rewards on utilities: HSBC Red Mastercard
  • Best credit card to pay Meralco bills: Citi Cash Back
  • Best credit card to pay telco bills: Metrobank Rewards Plus Visa

Utilities Cellphone Internet Cable

Phone companies as well as cable and internet providers have realized that credit card payments save time and paperwork for everybody. Its easy to set these payments up, and many of these companies dont charge a fee.

This isnt always the case for your electric, gas, water and trash removal bills though. For instance, Pacific Gas and Electric Co. in California charges a $1.35 convenience fee to accept credit card payments.

The higher your utility bill is, the more advantageous it becomes to pay by credit card, even with the convenience fees.

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How Will Paying For Bills With A Credit Card Affect My Credit Score

We just touched on one pretty big one , but another score-crumbling factor worth mentioning is how much you put on your credit card. While lenders dont like to see you not touching your card at all, they also dont like seeing maxed out lines of credit. To them, it can look like youve got too much debt to your name and if its not under control, that could be a cause for concern.

So, if youre already using your credit card for your weekly food shop, petrol and more as well as multiple bills, remember to keep an eye on your balance and try to keep well within that maxed-out amount – the ideal credit utilisation ratio is between 20%-30%, according to experts.

Its not all doom and gloom though. Stick to paying all your bills on time and in full month in, month out, and over time you could reap the rewards of an improved credit score – whatever position its already in.

What Is A Balance Transfer

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Balance transfers are a great option for individuals looking to move existing debt from one card to another that has a lower interest rate and other financial incentives. Many people will opt for a card where they can get the most perks and other financial benefits, like cash back on everyday spending and better rewards programs. A balance transfer is exactly what it sounds like: Your balance on one card will be transferred to another for a fee. Before deciding to go this route, do the math. Oftentimes, with fees and reduced interest rates, you may end up paying something similar to what you owed before. There are also several other pros and cons to be aware of.

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Pay Credit Card Bill Online Using Net Banking

– Instant

One of the simplest methods to make credit card bill payment online is to use your net banking account. If you have a savings account with the credit card issuer, your job becomes much easier as you simply need to register your credit card in your existing net banking account and make the payment directly.

Even when you don’t have savings account with the card issuer, you can open an internet banking account for your credit card and make payments directly from the online account.

Cashback Or Rewards For Bills Payment

Do I get cashback for paying bills?You might be wondering if youll be rewarded for using a credit card to pay bills. Well, it depends on the card. Some credit cards earn cashback or rewards points on utilities while others dont.

If you pay a lot of bills every month, its best to get a cashback or rewards credit card that lets you collect rebates or points each time you charge your utility payments to it. Rather than overspend on non-essentials, you rack up more rewards with bills youre going to pay for anyway.

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Enter The Billing Address For Your Credit Card

This is the address at which you receive your credit card statements. Note that this address may be different from the shipping address, for example, if your statements go to the post office but youd like your order shipped to your home or to someone as a gift. The billing address must be entered correctly for your credit card transaction to go through. Check your if you’re not sure of the exact billing address.

Only Paying The Minimum Balance

How to Pay Your Credit Card Bill! 0% Utilization is BAD?!

It’s tempting to send in minimum monthly paymentsoften $15 to $25when you’re under financial duress. Don’t do it. High-interest rates charged by credit card companies will keep the bill growing every month. Instead, send the highest payment you can afford and reduce spending in other areas to focus on paying off the debt. It might be worth going without extras like the newest smartphone or latest fashion if it means you’ll sleep easier at night, knowing you’ll soon be debt free.

It may not feel like you’re saving money when you increase credit card payments, but you are. Depending on the interest rate, you’ll save an average of 10% to 29% per year in interest on any balance you pay off. For example, if you pay off an extra $1,000 this year, you’ll come out $160 to $290 ahead, depending on the rate.

Money is probably already tight if you’re already in debt, so freeing up extra cash will give you some breathing room for the long haul. Whether you use this money to accelerate debt payments, start an emergency fund or invest in retirement. The power of compound interest will start working in your favor instead of against you.

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Security Bank Complete Cashback Mastercard

Bills Payment Features:

  • 3% cashback on utilities
  • Security Bank Bills Assist Program: Settle your monthly bills automatically through your Security Bank credit card.
  • SimplyPay: Pay utility billers that require bank deposits using your credit card.

Security Banks cashback credit card offers the highest rebate rate on utility bills payment at 3%. The card also earns tiered rebates on other essentials, saving you as much as PHP 1,000 on your monthly credit card bill.

You also have the option to enroll your utility bills in the Bills Assist Program. Some of the billers you can enroll include Meralco, Globe, PLDT, Sun, SkyCable, and Cablelink. Such a payment facility automatically charges all the enrolled bills to your credit card. However, you wont earn cashback on bills enrolled in Bills Assist. Use other online bills payment channels if you prefer saving money through rebates over the convenience of having your bills auto-charged to your card.

Lastly, Security Bank has a new feature called SimplyPay that allows you to conveniently pay with your credit card for utilities and other expenses that require bank deposit as the payment method.

Other Features and Benefits:

  • Minimum monthly income requirement: PHP 30,000
  • Annual fee: PHP 3,000
  • Interest rate: 3.50%
  • Cashback on other transactions: 5% on groceries, 4% on gas, 2% on dining, and 1% on shopping
  • Maximum rebate: PHP 12,000 per year

Pay Credit Card Bill Offline Through The Atm

– Instant

  • If you have a debit card from your credit card issuer or bank, you can walk-in to the bank’s ATM to pay the credit card bill.
  • Visit any nearest ATM of your credit card issuer with your debit card, insert your debit card into the ATM kiosk, select credit card bill payment option and follow the instructions to make credit card payment.
  • Usually, the bill payment through ATM is instant as the amount gets transferred from your savings or current account to your credit card account.

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Dont Max Out Your Line Of Credit

Banks are overly generous with credit, and its because doing so benefits them, not you. Do not borrow more than you need.

If youre offered a $25,000 line of credit but only need $10,000, then decline the rest. You only want to use a line of credit to pay off credit card debt, not add to your debt!

Once you have your line of credit, do not rack up the entire limit.

Just because you have credit doesnt mean you have to use it all. In fact, keeping your debt balances low and leaving yourself with lots of available credit is a great way to boost your .

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What To Do When You Cannot Pay Your Credit Card Bill Any ...

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Pay Credit Card Bill Online Through Billdesk

  • BillDesk is an online payment platform which allows you make credit card bill payments without having any online account.
  • Many banks and credit card issuers use the platform to offer easy and convenient bill payment services for their customers not using the net banking facility.
  • Through BillDesk, you can pay credit card bills of any bank using a debit card or net banking account of partner banks.
  • The BillDesk platform of each bank is unique and provides different payment options. You can visit the respective payment page for the list of banks allowed for net banking transactions or debit card transactions.
  • The screenshot below illustrates HDFC Credit Card BillDesk page along with the list of banks it accepts for bill payment.

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To Improve Credit Score Pay Sooner

Credit card users may have noticed already that exceeding 30% of a monthly credit limit can hurt a credit score. Less well-known, however, is another way to influence that percentage, known as . This adds a different type of valueone that goes beyond money spent or saved.

But without knowing exactly when your balance is reported to credit bureaus, whats there to do? A common strategy for those focused on improving their credit score is to simply pay off the credit card bill quickly with the expectation that doing so is more likely to precede reporting than if the payment was stalled.

Its also possible to pay off the balance anytime credit utilization nears 30%, even if that means paying several times within a billing period. Along with close monitoring of ones credit utilization, this might require some financial stability and might be impossible for people who find themselves waiting on the next paycheck in order to afford paying down a credit card bill.

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