Most bills accept credit cards, but some charge a fee for the convenience
You can pay most recurring bills with a credit card — utilities, insurance, phone service, internet, subscriptions, and many others. The catch is that some billers charge a convenience fee (usually 2 to 3 percent) when you pay by credit card instead of bank transfer or check. Others don't charge at all. A few won't take credit cards at all, or only accept them through third-party payment processors that add their own fees.
The best approach is to check with each biller before you set up automatic payments. A quick call or look at their website payment options will tell you whether they charge a fee and how much. If they do, you need to decide whether the credit card rewards you earn outweigh the fee — usually they don't, unless you're earning 3 percent or more back.
Key Takeaways
- Utility companies, insurance providers, and subscription services usually accept credit cards, but many charge a 2 to 3 percent fee for doing so.
- Banks and government agencies often don't accept credit cards directly; you may need to use a third-party payment service, which also charges a fee.
- Checking whether a fee applies takes one phone call or a visit to the biller's website payment page — do this before setting up automatic payments.
- Credit card rewards rarely justify paying a convenience fee unless you earn 3 percent or more back on that category of spending.
- Some billers offer discounts for paying by bank transfer or check, which can offset the cost of paying by credit card.
Bills that commonly accept credit cards without a fee
Most subscription services — streaming platforms, software, gym memberships, cloud storage — accept credit cards as their default payment method and don't charge extra. Phone and internet providers typically accept credit cards without a fee as well, though some offer a small discount (usually 0.5 to 1 percent) if you pay by bank transfer instead.
Many insurance companies accept credit cards without charging a fee, particularly auto and home insurance. Health insurance premiums paid through your employer's plan usually come out of your paycheck, but if you're paying out of pocket through the ACA marketplace or a private insurer, you can often use a credit card. Rental and lease payments sometimes accept credit cards, though landlords often charge a fee because they use a third-party processor.
Bills that charge a convenience fee for credit card payments
Utility companies — electric, gas, water, sewer — frequently charge a convenience fee when you pay by credit card. The fee is usually 2 to 3 percent of your bill, which means a $150 electric bill costs you an extra $3 to $4.50. Some utilities offer the fee-free option only if you pay by bank transfer, check, or in person.
Government agencies charge fees for credit card payments across the board. Property tax payments, vehicle registration, parking tickets, court fines, and business licenses all charge a fee when paid by credit card — often 2.5 to 3.5 percent. The fee goes to the payment processor, not the government agency itself.
Medical and dental bills sometimes charge a fee, depending on the provider's payment processor. Mortgage and rent payments rarely accept credit cards directly; if they do, the fee is usually high enough (3 to 4 percent) that it wipes out any rewards benefit. Loan payments — car loans, personal loans, student loans — vary by lender; federal student loans don't accept credit cards at all.
Bills that don't accept credit cards directly
Most banks and credit unions don't accept credit card payments for loan balances or mortgage payments through their standard payment systems. Some allow it through a third-party processor like Plastiq or Venmo, but those services charge 2 to 3 percent. The exception is if you're paying a different bank's credit card or loan — you can usually do that by transferring money to your account and then paying from there.
Federal student loans don't accept credit card payments through the standard servicer portals (Nelnet, Mohela, Navient, and others). If you want to pay a federal student loan with a credit card, you have to use a third-party payment service, which charges a fee. Private student loans vary by lender; some accept credit cards directly, others don't.
Childcare and tuition payments sometimes don't accept credit cards, or only accept them through a payment plan service that charges a fee. Check with the school or provider directly — many have moved to accepting credit cards in recent years, but others still prefer bank transfers or checks.
How to learn about a biller charges a fee
The fastest way is to call the biller's customer service line and ask directly: "If I pay my bill by credit card, do you charge a convenience fee?" They will tell you yes or no, and if yes, what the percentage is. Write it down so you remember for next time.
The second option is to look at their website's payment page. Most billers list their payment methods and any associated fees right there. Search for "payment methods" or "how to pay" on their site. If the fee isn't listed, call and ask.
When you set up automatic payments, the biller's system usually shows you the fee (if any) before you confirm. Read that screen carefully — it's your final note to choose a different payment method if the fee is too high.
When paying by credit card makes financial sense
Pay a bill by credit card only if the rewards you earn exceed the convenience fee. If your card earns 2 percent cash back and the biller charges a 2 percent fee, you break even. If your card earns 3 percent and the fee is 2 percent, you come out 1 percent ahead. If the fee is higher than your rewards rate, you lose money.
The math changes if the biller offers a discount for paying by bank transfer or check. Some utilities and insurance companies offer 0.5 to 1 percent discounts for automatic bank payments. In that case, you're comparing the discount you'd lose (say, 1 percent) against the fee you'd pay (say, 2.5 percent) plus the rewards you'd earn (say, 2 percent). That usually doesn't work in the credit card's favor.
One exception: if you're in the middle of meeting a credit card's sign-up bonus spending requirement, paying bills by credit card (even with a fee) might be worth it to reach the threshold faster. But this only makes sense if the bonus is large enough to cover the fees you'll pay. A $200 bonus on $5,000 in spending is worth paying a few extra dollars in fees; a $50 bonus is not.
Alternatives if the fee is too high
Set up automatic payments from your bank account instead. This is free, takes about five minutes to set up, and you can usually schedule it for the day after you get paid so you don't overdraft. Most billers offer this option on their website or by phone.
Pay by check if you prefer a paper trail. Checks are free and leave a clear record, though they take longer to process (usually 5 to 10 business days). This works well for bills you pay infrequently or want to review before paying.
Use a payment app like Venmo or PayPal if the biller accepts them. These apps sometimes charge a fee too, but it's often lower than a credit card convenience fee — check before you commit. Some apps offer fee-free transfers if you use a bank account instead of a credit card as your funding source.
Frequently Asked Questions
Can I pay my mortgage with a credit card?
Most mortgage lenders don't accept credit cards directly because the fee would be too high (3 to 4 percent on a large payment). If you want to pay by credit card, you'd need to use a third-party service like Plastiq, which charges a fee. For most people, automatic bank transfer is simpler and cheaper.
Do I have to pay a fee if I pay my utility bill online?
Not necessarily. If you pay online by bank transfer or electronic check, there's usually no fee. If you pay online by credit card, the utility will charge a convenience fee. Check the payment method options on their website to see which ones are free.
What if I pay a bill by credit card and then dispute it?
You can dispute a credit card charge if the biller didn't deliver the service or overcharged you. The convenience fee itself is not disputable — you agreed to it when you chose to pay by credit card. If you think the fee was applied in error, contact the biller first, not your credit card company.
Can I use a rewards credit card to pay taxes?
The IRS doesn't accept credit cards directly, but you can pay federal income taxes by credit card through approved payment processors like Official Payments or Pay1040. All of them charge a fee (usually 1.87 to 2.35 percent), which wipes out most credit card rewards. State and local taxes vary — check your state's tax website for payment options and fees.
Do I earn rewards on the convenience fee itself?
Yes, you earn rewards on the full amount charged to your credit card, including the convenience fee. So if you pay a $100 bill with a $2 fee and your card earns 2 percent cash back, you earn $2.04 in rewards on the $102 total charge. But you still paid $2 extra, so your net gain is only $0.04.