How to Pay Your Bills Using a Credit Card: The Ultimate Guide

Today, you're going to see why paying your bills using a credit card is an excellent choice. Why?

For starters, you can earn lots of cash back or points. Specifically, we'll show you the advantages of paying bills from credit cards and how to maximize them!

How Do You Actually Pay Bills Using a Credit Card?

Before we dive into the benefits, let’s answer the most important question: how do you actually pay bills with a credit card? It’s simpler than you might think. Most service providers — like telecom companies, streaming services, insurers, and utilities — let you set up pre-authorized payments directly through your online account. Just log in, head to the billing or payments section, and add your credit card as your payment method. For bills that don’t support direct credit card payments (like certain rent payments or property taxes), you can use third-party services such as Chexy to pay with your credit card — though these may come with processing fees. The key is to check your biller’s website or customer support to confirm if credit cards are accepted and whether fees apply.

What kind of bills can I pay using credit cards?

The list of bills that can be paid via credit cards is growing year by year.

Some of the most common bills that may accept credit card payments are:

• Subscription services - Netflix, YouTube, Spotify and more.
• Cell phone - Rogers, Bell, Fido and more.
• Internet - TELUS, Shaw and more.
• Cable TV - TELUS, Bell and more.
• Insurance - Car, house, life, and more.
• Utilities - Electricity, heat and more.

One thing to note is that not all businesses accept credit cards for bill payments. Make sure to check that the bill you are trying to set up credit card bill payments for accepts your card type (Visa or Mastercard or Amex).

For instance, the payment options for a Canadian Costco membership bill are limited to Mastercard exclusively but you can also use Visa online.

Why should I pay bills from a credit card?

1. Earn rewards

Almost all credit cards earn some form of cash back or travel rewards. In comparison to doing bank transfers or sending cheques, I think it's a much better deal.

Your bill payments can add up to a lot over time. So why not maximize your rewards by using the right credit cards to pay them off? There are actually some credit cards in Canada that give bonus rewards for recurring bill payments. Two of the best are the Tangerine Money-Back Credit Card and the Scotia Momentum Visa Infinite Card. You can learn more at Tangerine Money-Back Credit Card Review and Scotia Momentum Visa Infinite Card Review posts.

Read More: Best Credit Cards for Recurring Transactions and Recurring Bills in Canada

2. On-time and automatic payments

Most bills can be set up as pre-authorized payments using credit cards, paying off what you owe automatically. These payments will be made on a specific day of the month based on the company's billing schedule.

This will help you avoid any late fee payments and save you valuable time and energy. We call it the set it and forget it strategy since you won't have to worry about it every month.

Read More: Using Credit Cards to Manage Subscription Services in Canada

3. Simpler expense tracking

Do you also find tracking your bills and expenses a challenging task? If all your bills went through a credit card, you'll have a much easier time looking over your monthly statements and tracking them alongside other expenses.

Having all your bills in one place creates a more organized system. It will also help you manage your finances more efficiently and have more control over them.

Downsides of using a credit card for bill payments?

There are 2 key things to pay attention to when paying your bills from credit cards:

Hidden fees

Some credit cards may treat a bill payment as a cash advance instead.

Read More: What is a Cash Advance?

Cash advances usually incur either a flat fee or a percentage of the transaction, which in turn is subject to a specific interest rate that goes into effect immediately.

In these cases, avoid hidden fees on credit cards and switch to ones that won't charge you a fee or damage your credit score.

Credit utilization

Credit utilization is an essential contributing factor to your credit score.

In simple terms, it measures how much of your total credit limit is currently being used.

The optimal ratio to keep your utilization at is 30% or lower.

Investopedia shows a great example of how to calculate your utilization.

I mention credit utilization because your monthly expenses can vary month to month, while your recurring bill payments might remain the same.

That means you need to ensure your pre-authorized bills don't exceed your credit limit and account for your varying expenses.

Conclusion

So let's summarize what we just learned.

If you have any bills that accept credit card payments, make sure to either manually pay them using your credit card or set up pre-authorized payments.

Check for any hidden fees your credit card may charge you for before you pay any bills.

Keep track of your monthly bills and expenses, and do not over-utilize your credit cards to maintain a good credit score at all times.

Let me know in the comments if this was helpful!