Billers Charge You a Fee to Pay With Credit — But Why?

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fee to pay bills with a credit card
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When it comes to paying bills, there are many different ways to get the job done: debit, credit, cash, check, online, over the phone, in person. Each comes with its own set of hurdles. By paying bills with a credit card, you may be signing off on a slightly higher bill than you realized. That’s because many service providers charge you a fee to pay bills with a credit card. But what exactly is the fee for, and why is it passed on to you?

Can You Pay Bills With a Credit Card?

In many cases, you can pay your bills with a credit card. However, there are exceptions. Some billers charge you a fee to do so, and others don’t accept credit card payments at all.

close up of debit card raised numbers

Why Do Billers Charge Fees to Pay Bills With a Credit Card?

A merchant or biller has to work directly with credit card companies in order to allow customers to pay monthly bills with credit cards. When a merchant or biller accepts credit cards as a valid form of payment, they are charged a fee by the credit card company in order to process the credit card payment.

Typically, merchants and billers pay 1.3%–3.5% on each credit card transaction. The charge is then paid out to the card’s issuing bank, the card’s payment network, and the payment processor in the form of an interchange fee, assessment fee, and processing fee.

Sometimes, businesses will take on those fees themselves. Other times, businesses won’t accept credit cards as a valid form of payment because they don’t want to deal with the fees. And other times yet, businesses will pass the fees on to the customer. In these cases, the charges will show up on your credit card bill in the form of convenience fees.

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How Much Does a Convenience Fee Cost?

The cost of the convenience fee that you pay as a customer depends on a host of factors. First, the fee will depend on the card’s payment network. Popular payment networks include Visa, Mastercard, Discover, and American Express, and each network charges a different percentage for processing a credit card transaction.

The type of card that you use to pay also helps determine how much you’re charged. Some cards, such as travel rewards cards, carry a larger price tag when you make a payment.

Finally, the business’s merchant category can cause fees to fluctuate. Merchant categories are used by credit card companies to classify in which area a business falls. For instance, restaurants are in a different merchant category than online subscriptions, and you will likely pay a different fee depending on where you’re conducting the transaction.

hundred dollar bills

Which Bills Can You Pay With a Credit Card?

Whether you can make a payment with a credit card can vary from biller to biller. Similarly, whether your biller charges you a fee for paying with a credit card can also vary.

Credit cards are an increasingly common form of payment that offer appealing benefits, such as travel rewards, cash back, and credit boosting. Customers appreciate the value of paying with credit cards, so some billers make it a payment option.


Companies that operate utilities, gas, electric, water, and trash removal recognize that some customers prefer paying with a credit card. Some will allow you to pay your bills with a credit card fee-free, while others may still charge the fee. To learn about whether you can make your utility bill payments with a credit card, it’s best to contact your biller directly.


Most home insurance, auto insurance, life insurance, and health insurance billers make it easy for customers to pay by credit card, however you may have to deal with the convenience fee. Occasionally, a company may waive the fee if you pay your premiums in full rather than in installments. To learn more about paying for your insurance with a credit card, you should contact your insurance provider to hear about their policies.

Phone, cable, and internet

The majority of service providers accept credit for monthly payments on both mobile phone bills and landline bills. The same goes for cable and internet providers. Better yet, these companies might be willing to waive the fees if you set up recurring automatic payments with your credit card. You may also be able to access additional products and services, or earn rewards.

Alarm and security

Like phone, cable, and internet providers, many home security providers acknowledge the convenience of credit card payments and will let you pay your monthly bills with a credit card. However, you should confirm with your service provider that you will not be charged a fee.

Subscription services

Television streaming services are the common culprits these days. Many of these service providers — such as Netflix, Hulu, and Disney+ — allow you to pay your bills with a credit card. They may also waive the fees and make it easier for you to set up autopay using your credit card. Other services, such as music streaming, grocery subscriptions, and health and wellness boxes, also typically allow customers to pay with a credit card.

Remember, if you’re considering setting up autopay with a credit card, it’s important to think about whether this form of payment works best for your finances and lifestyle.

bills not pay credit card

Which Bills Can You Not Pay With a Credit Card?


Most mortgage lenders do not accept credit cards because they don’t want to deal with the convenience fees associated with processing. Every once in a while, you’ll find a mortgage lender that will allow you to pay with a credit card, but you can expect to pay a fee.

There are also third party services that make it easier to pay your mortgage with a credit card, but these services usually also come with a fee that is a percentage of your entire bill. In each of these instances, you would have to decide whether the fee is worth the convenience or perks that come with paying with a credit card.


Like mortgage lenders, landlords and rental companies typically prefer that you pay via cash, check, or direct transfer. However, companies that accept credit are not impossible to find. If you do rent from a company that allows you to pay rent with a credit card, you can most likely expect to pay a convenience fee.

Auto loan

Similar to other creditors, lenders of car loans typically don’t want to deal with the processing fees associated with credit card payments. When you take out a loan, the lender wants the easiest, cheapest form of payment that will ensure their money is repaid. That usually means that you’re limited to paying with debit, cash, or check — online, by phone, by mail, or in person.

Student loan

Generally, it’s not possible to pay off federal student loans with a credit card. However, you may be able to use a credit card to pay off private student loans. If you want to pay for student loans with a credit card, there are other options, such as third-party payment services and balance transfers. However, if you use a third-party service, you typically have to pay a fee. With balance transfers, you have to be careful to mind your introductory APR period. If you don’t stick to a strict payment schedule, you could end up adding a significant amount of interest to an already hefty loan payment.

how to pay bills with credit card

How to Pay Bills With a Credit Card

Paying your monthly bills with a credit card makes sense when it’s the benefits that you’re after. It allows you to earn credit card rewards and credit card points, track your spending more easily, and take advantage of new credit card offers. However, it’s important that you manage your bill payments responsibly if you’re going to pay your bills with a credit card. Otherwise, you could end up with a financial mess on your hands.

When paying bills with a credit card, it’s important to always pay your credit card bill in full when the due date rolls around, not just the minimum payment. In other words, don’t carry a credit card balance from month to month. If you do, you’ll have to pay interest charges as well and will end up spending more on essential bills than you budgeted for.

As a rule of thumb: Only pay bills with a credit card because you can, not because you have to. If you’re not positive that you’ll be able to pay off your credit card bill at the end of the month, it’s best to find a different way to pay your bills so that credit card interest doesn’t build up. On the other hand, if you have your spending under control and want to take advantage of credit card offers that you couldn’t get with a debit card, consider using a credit card when paying bills.

How to improve credit score

How Does Paying Bills With a Credit Card Impact Your Credit Score?

When done responsibly, paying bills with a credit card can boost your credit score. This is assuming that you pay off your balances in full each month and keep your credit utilization ratio below 30% at all times. The largest components of your credit score are payment history and credit utilization, so these should be your top priorities when making bill payments with plastic.

Bills are inescapable — so why not get rewarded for paying them when possible? If you have a bill that you’re able to and feel comfortable paying with a credit card, it can be a good move.

On the other hand, if you start to have delinquent credit card payments due to bills, or rack up a hefty balance that is reported to the credit bureaus, this can cause your credit score to go down. This is why you should avoid putting your bills on a credit card if you are having trouble paying them with cash or money that is currently in your checking account. If you aren’t sure that you will be able to pay them off by your due date, it’s best to find another way to pay for them.

Credit cards inherently carry more risk than debit cards and cash. If you are not able to catch up on credit card payments, the consequences could be much more serious than an overdraft or late fee. It could lead to bad marks on your credit report, damage to your credit score, your delinquent payments being sent to a collection agency, and loss of access to loans and other financial products and services.

Last Updated on March 03, 2024
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Disclaimer: The information provided in this website is for educational purposes only and should not be considered as financial advice. Consult with a financial professional for personalized guidance regarding your specific situation.

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