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, I'll show you the advantages of paying bills from credit cards and how to maximize them!

But first

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.

Now that you have a list of bills in mind...

Why should I pay bills from a credit card?

There are 3 simple reasons to do so:

1. Earn rewards

Almost all credit cards earn some form of cash back or points.

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?

Imagine all the travel points you could earn by simply paying your bills every month.

So, what are the best credit cards for recurring bill payments? If you're interested in learning more, we cover this in another article.

Want to earn $1,000 MORE in credit card rewards?

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But for now, here are 2 of your best options:

Easy to qualify, no fees and good cash back

Tangerine Money-Back Credit Card

Tangerine Money-Back Credit Card

4.4

Finly Rating

APPLY NOW

go to Tangerine's website

$50 $120 Cash Rebate From FinlyWealth expiring on

Welcome Bonus*

10% Cash Back (up to $100 value) + 1.95% balance transfer promo rate for 6 months

Rewards Rate*

0.5% - 2%

Annual Fee*

$0

Interest Rates

20.95%* / 22.95%*

RECOMMENDED CREDIT SCORE*

300

Poor

560

Fair

660

Good

725

Very Good

760

Excellent

Get your free credit score

Our Take

While we think Tangerine isn't the best single credit card to own, it's still a valuable card to have in your arsenal for maximizing your rewards. It offers one of the highest cashback rates for pharmacy and recurring bill payments, areas where your other credit cards might not provide significant rewards. This card only requires a Fair credit score, making it an excellent choice for people who don't have a high credit score yet.

Pros & Cons

Pros

---

• Allows you to change the categories, and you get a 2% reward depending on how your spending is changing every 90 days.
• 2% cashback on recurring Transactions and pharmacy purchases. One of the highest cashback rates on these categories among credit cards in Canada. 
• Has cashback on Furniture and Home Improvement categories. Two categories that are not covered by any other card in Canada.
• Easy credit score requirements needed for this card.
• Overall, it is a good no-annual-fee cashback credit card, especially if you have a Tangerine Savings account.

Cons

---

• Insurance coverage is the most basic.
• Very low cashback rate on the other categories not selected.

Card Details

Rewards*

• 2% on the choice of two categories chosen from the 10 offered by Tangerine (Grocery, Restaurants, Gas, Entertainment, Furniture, Hotel-Motel, Drug Store, Reoccurring Bill Payments, Home Improvement, Public Transportation and Parking).
• Have your cash back Reward deposited in a Tangerine Savings Account and get a third 2% Money-Back Category.
• 0.5% cashback on all other credit card purchases.

Insurance*

Coverage*

• 

  Purchase Protection

  90 days
• 

  Extended Warranty

  Up to a year

Eligibility*

• Credit Score

  Good
• Annual Income

  N/A

^*11 Balance Transfer Promotional Offer at 1.95% for 6 months (1% Balance Transfer Fee) A Promotional Rate of 1.95% will apply to any and all Balance Transfers made within 30 days of the Account opening, and will remain in effect for 6 Statement Periods from the date the last such Balance Transfer was posted to the Account (the “Promotional Rate Period”). To take advantage of this Promotional Offer, you must complete the Balance Transfer request within 30 days of Account approval. You must also activate your Card within 45 days of Account approval for the requested Balance Transfer to be processed, or the Balance Transfer will be automatically cancelled. Balance Transfers are treated as Cash Advances on your Card and do not have an interest-free grace period. Balance Transfers may not exceed the available credit on the Account. If the Balance Transfer exceeds the available credit, the Balance Transfer transaction will not be processed. A 1% Balance Transfer Fee will be charged on each Balance Transfer amount and will be immediately charged to your Credit Card. This Balance Transfer Fee is waived by Tangerine if you are a resident of the province of Quebec at the time you accept this offer. Interest does not accrue on the Balance Transfer Fee, however it is included in the Minimum Payment amount on your monthly statement. You must continue to make all of your monthly Minimum Payments by the Payment Due Dates shown on your monthly statements. If you still have an amount owing from your Balance Transfer when the Promotional Rate Period ends, the Cash Advance interest rate of 22.95% will apply to that amount. You must continue to make the Minimum Payments on your Account, regardless of whether the Balance Transfer has been processed to your Account. We don’t charge interest on new Purchases that appear on your statement for the first time if we receive full payment of the Balance on your statement (including payment of any Balance Transfers included in that Balance), by the Payment Due Date on your statement. This means you will pay interest on new purchases that appear on your statement for the first time unless we receive payment of your entire balance each month by the payment due date. For example, if you do a promotional (or non-promotional) balance transfer for $7,000 and spend $500 in new purchases during the same statement cycle, we must receive payment of the entire balance of $7,500 on or before your payment due date to avoid paying interest on your new purchases that month of $500. Balance Transfers may not be used to transfer money to or from another Tangerine Account. See the Tangerine Credit Card Cardholder Agreement for more information about how we apply payments to your Account. Check here for full details and current product information.

The Tangerine Money-Back Credit Card offers up to 2% in cash back rewards on 3 categories of your choice without any particular limits if the user chooses to have their cash-back rewards deposited into a Tangerine Savings Account.

You can choose "Recurring Bill Payments" as one of your chosen categories and earn 2% every time you pay a pre-authorized bill.

If you're interested in learning more, we also cover this in more depth in our article on the best credit cards for recurring bill payments (linked above).

What makes this card even better is that it comes without an annual fee.

However, maybe you prefer a premium credit card instead with a higher cash back rate?

High cash back, generous welcome bonus and great insurance

Our choice for: Best value on recurring bills and groceries

Scotia Momentum® Visa Infinite* Card

Scotia Momentum® Visa Infinite* Card

4.6

Finly Rating

APPLY NOW

go to Scotiabank's website

$100 Cash Rebate From FinlyWealth

Welcome Bonus*

10% Cash Back (up to $200 value)

Rewards Rate*

1% - 4%

Annual Fee*

$120 $0

Interest Rates

20.99% / 22.99%

RECOMMENDED CREDIT SCORE*

300

Poor

560

Fair

660

Good

725

Very Good

760

Excellent

Get your free credit score

Our Take

The 4% cashback offered on groceries and recurring purchases is the highest among all other credit cards. With the first year's annual fee waived, and with the right transactions used on this credit card, a high amount of cashback could be earned.

Pros & Cons

Pros

---

• Highest Cashback rates on Groceries and Recurring purchases compared to other cashback credit cards.
• High insurance coverage.
• First year annual fee waived.

Cons

---

• The base cashback rate (1%) is low for most high spent categories, especially after the first year when the card's annual fee kicks in.
• Cashback is paid out once per year in November

Card Details

Rewards*

• 4% cashback on groceries, recurring payments (up to $25,000 in purchases, equals to $1000 cashback per year then drops to 1%)
• 2% cashback on gas, daily transit (maximum $500 cashback per year)
• 1% cashback on all other credit card purchases (unlimited).

Insurance*

Coverage*

• 

  Mobile Device Insurance

  $1,000
• 

  Travel Accident

  $500,000
• 

  Emergency Out of province Medical

  15 days
• 

  Trip Interruption

  $2,000
• 

  Trip Cancellation

  $1,500
• 

  Flight Delay

  $500
• 

  Lost or Stolen Baggage

  $500
• 

  Baggage Delay

  $500
• 

  Car Rental Damage & Theft

  48 days
• 

  Purchase Protection

  90 days
• 

  Extended Warranty

  1 year

Benefits*

Details*

• 

  Car Rental Discount

  25% off base rate of Avis Rent A Car and Budget Rent A Car
• 

  Visa Infinite Exclusive Benefits

  Yes

Eligibility*

• Credit Score

  Good
• Annual Income

  $60,000 personal or $100,000 household

^*See Card Provider's website and Card Application for complete card details, terms and current offers. Reasonable efforts are made to maintain accuracy of information. Check here for full details and current product information.

The Scotia Momentum Visa Infinite Card comes with a whopping 4% cash back on all your recurring bill payments and subscriptions up to a generous limit of $25,000.

So, for example, if your total monthly bills were $500, you'd save $20 just by using this card.

Not to mention, the 4% cash-back rate also applies to your grocery purchases!

This credit card also comes with fantastic travel insurance coverage if you travel frequently.

However, to qualify for this credit card, you'll need to have a minimum individual income of $60,000 or a household income of $100,000.

So make sure you can qualify before you apply for it!

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.

I call it the set it and forget it strategy since you won't have to worry about it every month.

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.

This all sounds really great, but...

What's the catch?

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.

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 credit cards with hidden fees 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!