Should You Make Utility Bill Payments Using Credit Cards

Utility bill payments make up a considerable portion of one’s monthly expenditure, but are often excluded from most credit cards’ rewards program, offering no or low returns. However, there are some credit cards that offer benefits on utility bills such as electricity, gas, telephone bills and mobile recharges. Being an indispensable expense, earning value-back on utility bill payments would benefit most users. Here are a few ways how the right credit card for utility bill payment could be helpful for your finances.

Earn Value-back and Save

Rewards or cashback benefits are the strongest reason why you should switch to a credit card for making utility bill payments. In comparison to other modes of payments, you can save substantially on routing your utility bill payment through a credit card.

While some cards offer co-branded benefits with payment apps like Google Pay, Airtel, etc. others provide general rewards and cashback benefits across all utility payments. Here you need to see your brand loyalties. For instance, if you prefer the Airtel app for most of your recharges, Airtel Axis card can offer you up to 10% cashback, but no rewards are offered on bill payments through other apps. Thus, benefits can be maximized only if you make payments through the associated platform.

If you are looking to apply for a credit card to save on utilities, here are some of the best options:

Credit Card	Annual Fee	Features
Amazon Pay ICICI Credit Card	Nil	2% cashback on mobile, broadband & DTH recharge and utility bill payments on Amazon
Airtel Axis Bank Credit Card	Rs. 500	10% cashback on utility bill payments through the Airtel Thanks app
Axis Ace Credit Card	Rs. 499	5% cashback on bill payments, DTH & mobile recharges via Google Pay
Standard Chartered Super Value Titanium Credit Card	Rs. 750	5% cashback on telephone and utility bill payments
HDFC Regalia Gold Credit Card	Rs. 2,500	4 reward points on every Rs. 150  spent, including insurance, utilities & education

Never Miss a Payment

Utility bill payments are recurring expenses that you are required to pay frequently. Thus, setting up automated payments can help you streamline these spends and avoid penalties on missed utility bill payments. You can automate your payments by setting up standing instructions for the same on your credit card. Moreover, if you do not use your card often, setting up automatic payments can help you keep your card active. In the long run, an active credit card with on-time payment record will boost your credit score indicating a longer credit history and financial credibility.

Save on Other Spending Categories

In addition to providing value-back on utility bill payments, credit cards also reward you across all other spends. For example, Axis Ace credit card provides 5% cashback on utility bill payments made via Google Pay but at the same time you get 1.5% flat cashback across all other online and offline spends. Some other additional benefits like complimentary lounge access, fuel surcharge waiver, discount with select brands, could also help you save a considerable amount.

Get Cover for Financial Emergencies

A credit card can come in handy in case of a financial emergency. When short of funds, you can switch to a credit card to cover unavoidable expenses like medical bills. Big-ticket purchases can also be converted into EMIs and paid off over the period of a few months. This reduces immediate financial burden.

Things to Keep in Mind when Getting a Credit Card for Utility Bill Payments

1. Read the terms and conditions associated with your credit card. Identify if there is any monthly cap on earning the value-back, minimum or maximum transaction limit, or restricted frequency for making the utility bill payments. Besides, if you earn rewards, determine the value-back potential by knowing the per-reward value, redemption capping, and redemption charges, if any.

2. Find out if there are any transaction charges for making bill payments via credit cards. If yes, determine if the fee you pay is worth the value back you earn.

3. Lastly, understand that a credit card can yield you maximum benefits when you use it responsibly. For this, ensure making on-time payments to avoid paying interest and late payment charges. Always try paying your credit card bill on time and in full before or by the due date.

Whether you want to pay your utility bills via a credit card or not is eventually a subjective choice. To make the right decision, always consider the pros and cons to weigh out the overall benefits you can derive. If you own a credit card that offers accelerated benefits on utility bill payments as those mentioned above, you can definitely go for it. But if there are charges applicable or when the value back is limited due to rewards capping or low reward value, using other modes of payment can be the best option.