Pros and Cons of Using a Credit Card to Pay Bills

If you are planning to use your credit card to pay for bills, there are a number of aspects to consider. Firstly, what type of bill is it that you are planning to clear? The pros and cons of using a credit card to pay your bills will differ depending on whether it is for your rent, car or student loan, utility bill, etc. Other factors to consider are fees you might incur and whether you will have to pay an interest rate to conduct the transaction. If you have already used your credit card bill to pay certain bills, then here are two general rules to help you better manage your current finances.


  1. Consistently make prompt, complete monthly payments on your outstanding balance. 
  2. Never use a credit card to pay for expenses you can’t afford to cover otherwise. 

You can even use a credit card to pay the bill of another credit card. However, this type of transaction should only be made in certain circumstances. Now, let’s look at the pros and cons of using a credit card to pay various bills and transactions. 

Utility Bills Payments with Credit Card

There are many credit card offers that can be availed of on utility bills. Since these are bills that individuals are already required to pay, receiving reward points by using a credit card is a nice bonus. However, using a credit card for these payments is only beneficial if the gain offsets the costs. This is because some companies charge convenience fees for these types of transactions. Hence, researching can help you decide if using your credit card is a good idea! If there are no additional fees or dues charged to your credit card when you make this type of transaction, then using your credit card is certainly a good option. 

Paying Rent with a Credit Card

It is still largely the custom for landlords to accept only cash and cheques as payment for one’s rent. However, there are many platforms available in India that can help renters use credit payments as a way to make rent. The downside to using these intermediaries is the convenience and service fee incurred while you make the transaction. Nevertheless, it is still an option for those in a financial or liquidity squeeze. 

Making Car Payments with Credit Cards

There are very few instances of individuals buying a car entirely on their credit card. However, it is fairly common practice for car companies to accept a downpayment for a vehicle via credit card. The amount allowed is usually around 5-10% of the total cost of the car. Individuals can even avail of bonus credit card offers that can help boost reward points. However, once again, individuals must look out for any fees or interest rates they will be required to pay on the transaction. 

Using One Credit Card To Pay For Another Credit Card

Your financial condition will determine whether you should use a credit card to pay another credit card bill.  If you have trouble controlling your spending or paying your credit card payments on time each month, it’s possible that this type of transaction is not the answer for you. If you can’t pay it back right away, taking on high-interest debt by paying the bill of one card with another is risky, this payment strategy might only be appropriate for emergencies.



As can be seen, the most important points to consider before using your credit card are: 

  • Is a credit card payment option available?
  • What type of transaction is it? 
  • How much interest rate & fees must I pay? 
  • What rewards or benefits am I getting? 
  • Can I afford the debt I am incurring from these payments?