Paying your phone bill with a credit card can be a smart move, but there are some things to consider first Let’s break down the pros and cons so you can decide if it makes sense for your situation
Pros of Paying Your Phone Bill With a Credit Card
There are several potential advantages to charging your phone bill to a credit card each month:
Earn Rewards
Many rewards credit cards will give you 1-5% back on all your spending. That means you can earn cashback or travel points on your recurring phone bill just by charging it to the right card. Even a basic 1% cashback card would net you $10-$20 back per year on a $1000 phone bill. Cards that offer higher rewards, especially in popular categories like groceries or dining, can get you even more.
Enjoy Signup Bonuses
Credit cards often offer large signup bonuses, like $200 back after you spend $500 in the first 3 months Paying your phone bill is an easy way to hit minimum spending requirements to earn these lucrative bonuses This is like getting 6+ months of phone bills for free!
Build Your Credit
One major factor in your credit score is your history of on-time payments. Setting your phone bill to autopay each month is an easy way to build positive payment history and improve your credit over time.
Access to Credit Card Benefits
Many credit cards come with additional benefits, like rental car insurance, extended warranties, or purchase protection. Charging your phone bill can make you eligible for these perks. Some cards even offer cell phone insurance when you pay your bill with them, saving you $7-15 per month.
More Flexibility
Credit cards give you some wiggle room if you ever need extra time to pay a bill As long as you make the minimum payment, you won’t get hit with late fees With a debit card or bank account, a lack of funds means late fees.
Added Security
Credit cards come with $0 fraud liability if someone steals your card number. Banks sometimes make you liable for hundreds in fraudulent charges on a debit card or bank account. So credit cards give you an extra layer of protection.
Cons of Paying Your Phone Bill With a Credit Card
While the benefits often outweigh the downsides, here are some potential drawbacks to consider:
Credit Card Fees
Most phone companies allow you to pay by credit card for free. But some may tack on a 2-3% processing fee, which would cancel out any rewards you earn. Check your phone carrier’s policy first.
Missing Out on Auto-Pay Discounts
Many carriers offer a $5-10 discount per month for setting up autopay from a bank account. T-Mobile, for example, only gives this discount on debit/bank payments – not credit cards. Doing the math, you may come out ahead taking the discount instead of earning 1-2% back on your card.
Putting Yourself at Risk of Debt
It’s obviously best to pay your card off in full each month. But charging any regular expense increases the risk of racking up interest charges if you ever carry a balance. Make sure you have the budget and discipline to avoid credit card debt before you put your phone bill on plastic.
Potential Impact on Credit Score
Having a credit card balance close to your credit limit can negatively impact your credit score, even if you pay on time. So charging a big monthly bill could hurt your credit if it pushes your utilization too high. Make sure to keep utilization below 30%.
Remembering to Pay
When you set up autopay from a bank account, the payment happens automatically each month. But with a credit card, you have to log in and manually make the payment by the due date. Forgetting could result in a late fee and interest charges. Set payment reminders to avoid this.
Tips for Paying Your Phone Bill With a Credit Card
If you decide putting your phone bill on a credit card makes sense for your situation, here are some tips:
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Check if your carrier charges a fee for credit card payments first – it’s typically free for most major providers like Verizon and AT&T.
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Pick the right card – choose one with no annual fee and rewards on everyday purchases or in categories like groceries, dining, or gas.
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Use autopay to guarantee on-time payments every month.
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Pay your bill as soon as the charge hits your account to keep credit utilization low.
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Set payment reminders a few days before your due date as a backup.
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Compare any autopay discounts your carrier offers on bank payments before using a credit card.
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Make sure to pay your card off in full each month to avoid interest charges.
The Bottom Line
Paying your phone bill with the right credit card can help you earn rewards, improve your credit, and take advantage of card benefits like cell phone insurance. Just be aware of any fees your carrier may charge and the risk of debt before making the switch. But for financially responsible cardholders who pay in full, using a credit card is an easy way to maximize everyday spending.
Potential benefits of paying bills with a credit card
Making bill payments with your credit card can have some advantages. These could include:
- Credit building: Using your card responsibly over time by doing things like making on-time monthly payments can help you build a credit history and improve your credit scores.
- Convenience: Some credit cards include a variety of digital bill-pay benefits. For example, Capital One offers AutoPay, which lets you set up automatic payments for your monthly bills.
- Rewards: You may be able to earn rewards like cash back, points or miles when you pay bills with a rewards credit card.
- Flexibility: Whether you choose to pay online, over the phone or in person, you can generally use a card.
- Protection: Credit card statements can act as proof of payment in a dispute.
What else to consider before paying bills with a credit card
Before you use a credit card to pay bills, consider whether:
- You understand the terms of the credit card. If youâve read the credit card customer agreement and account opening disclosures, youâll know what to expect when it comes to due dates, fees, interest rates and other information.
- You can pay the credit card bill on time. As the Consumer Financial Protection Bureau (CFPB) explains, you should make your payments on time, every time. Thatâs because your payment history is an important factor in calculating your credit scores. Missed or late credit card payments can affect your credit and lead to late fees and higher interest rates, depending on your card.
- You can pay at least the minimum. Paying your balance in full every billing cycle might help you avoid paying interest. But if you canât pay your balance in full, the CFPB recommends paying as much as possibleâand making at least the minimum credit card payment. As the CFPB explains, âThe higher the balance you carry from month to month, the more interest you pay.â
Debit Card vs Credit Card – What should I use on paying Bills, Online/Store shopping, ETC…
FAQ
Is it okay to pay a phone bill with a credit card?
What bills cannot be paid with a credit card?
Can you pay a phone contract with a credit card?
Can you pay by credit card on a phone?
Should you pay your cellphone bill with a credit card?
You won’t get “points rich” simply by paying your monthly cellphone bill with a credit card. But it’s still important to use the right card to cover that monthly expense. Some issuers even offer smartphone-related perks, like built-in cellphone protection, for when you damage your phone.
Can I pay my bills with a credit card?
Yes, you can pay most bills using a credit card. Some providers will charge you extra to pay by credit card, while others will insist on – or incentivise – you to pay via a direct debit from your current account. However, in most cases you should be able to pay with your credit card. Whether you would want to is another question.
How do I pay bills with a credit card?
Another bill you might pay with your credit card is your phone bill. You can likely set this up online on your phone provider’s website or by giving them a call. If you’re unsure of how to pay bills with a credit card, simply consult your phone provider. You’ll typically face no additional processing fees.
Can you pay a cable bill with a credit card?
Cable is another bill you can pay with a credit card. To determine how to do so, you’ll want to consult your cable provider. You may be able to enter your credit card number on the online payment portal or provide this information over the phone. Setting up autopay is also usually an option with a credit card.
Should I pay my monthly bills by credit card?
Generally speaking, paying your monthly bills by credit card can be a good idea as long as you’re able to adhere to two rules. Always pay your statement balance in full and on time each month. Avoid putting bills on a credit card because you can’t afford to pay them with cash.
Can someone else pay my credit card bill?
Yes, someone else can pay your credit card bill either through online banking or over the phone – at least, these are the easiest ways to do it. Alternatively, it is possible for someone to pay your credit card bill by sending a check via mail, or in person, by visiting a branch of the bank that issued the credit card.