5 Credit Card Perks For Utility Bill Payments

25 OCTOBER, 2022

Credit cards are easy to use and provide cardholders access to a wide range of goods and services. The credit card issuer, in turn, rewards the cardholder with various perks and benefits for each penny spent. Each individual has different spending habits and priorities, so the credit card issuer issues specific cards tailored to reward specific spending behaviour. For instance, a shopping card rewards spending on shopping, while a travel card is best suited for travel-related expenditures.

Meanwhile, with the growing use of digital payments in India, people have now started using credit cards to make utility bill payments. It is a convenient and quick way to make bill payments. Once registered for utility bill payments, the credit card reminds you of your pending bills every month, so you don’t miss them. This helps you save a lot of time and, of course, money which you may pay as a penalty in case you miss a payment.

This article will discuss five credit card perks accessible if you pay utility bills using a credit card.

1. Easy access and convenience: Gone are the days when you had to stand in line to pay off your utility bills. The rise of the internet has transformed our lives, including how we pay bills. Nowadays, we can pay off utility bills using credit cards from the comfort of our homes. All you have to do is punch in your credit card number and the necessary details, and with the click of a button, your utility bills are paid.

Apart from the easy accessibility and convenience, paying utility bills with credit cards will help you keep track of your utility payments’ due dates. Furthermore, you can automate your utility bill payments using your credit cards. This would ensure you don’t miss a single bill payment and help you save money by avoiding late fees and penalties.

2. Saving money: Saying that you can save money by using credit cards to pay utility bills may seem conflicting. But it is true. Credit card issuers offer various discounts and cashback offers on transactions through their cards. You can use these saved or cashback amounts to purchase more goods and services. You may pay your future utility bills using the saved or cashback amount.

You can apply for a credit card tailored toward utility bill payments to save more money. Credit cards tailored toward a specific end-use purpose provide better rewards and offers when you use the credit card for that particular task and purpose. So, if you believe that such credit cards will benefit you, apply for one to save even more money and benefit from exciting cashback, rewards, and offers.

3. Reward points: Each penny you spend while transacting through your credit cards takes you a step toward exciting offers or rewards. It, therefore, makes sense to pay off your utility bills using your credit card to earn reward points. These reward points can, then, be redeemed for rewards and offers of your preference. Each card issuer has its conversion mechanism, with some offering the ability to convert to cash.

Redeeming reward points can also help you save money. Check whether your reward points have an expiry date or not. You would not want to be discouraged when you find out the accumulated reward points have expired. So, regularly check your credit card statement to check your reward points. If you do not want to check your reward points' expiration date periodically, go for card issuers that provide reward points with no expiry date.

4. Improvement in personal finance: Paying utility bills using credit cards will assist you in keeping track of your personal finance. Since you know your monthly expenditures, you can meticulously budget your finances.

Moreover, keeping track of your finances will assist you in paying your credit card dues regularly. Not only will this help you save money by avoiding penalties and late fees, but it will also improve your credit score. Additionally, proper budget planning can help you achieve financial stability.

5. A strong credit score: Since you can keep a tab on your monthly incomings and outgoings, you can pay your credit card dues on time. Regularly paying off your monthly credit dues will improve your credit score. A strong credit score is highly sought after. This is because having a solid credit score opens many windows of opportunity for an individual. These opportunities may mean lower interest rates on loans, high credit limits, exclusive loans and credit deals, etc. Additionally, paying utility bills using credit cards will improve your credit utilisation, contributing to a strong credit score.

However, before you run off to pay your utility bills using credit cards to benefit from the perks and rewards, you might want to consider the following points:

• Many credit card issuers put some limiting factors in their rewards and offers. This may be a minimum transaction amount to qualify for the rewards or a cap on the benefits you can derive from the rewards. This means you may have to transact a certain amount to qualify for the rewards, and there is a limit on the maximum reward points you can benefit from.
• Paying utility bills using credit cards may involve transaction fees, handling fees, fees or commissions for utility providers, etc. These additional expenses must be compared with the benefits of the rewards or offers to determine whether you benefit from the process. Besides, there are various alternatives to credit card payments like net banking, UPI transaction, debit card, etc.

Now that you know several credit card benefits for utility bill payments, you should not forget to make your credit card online bill payment on time. Since you cannot pay a credit card bill using a credit card, you should spend wisely and keep enough cash in your account to make your credit card bill payments before the due date to keep enjoying its benefits.

Also, before paying your utility bills with your credit cards, consider the pros and cons of such a transaction carefully. However, if your credit card is tailored for utility bill payments, it will surely benefit you.