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Paying Utility Bills with a Credit Card: A Guide by O1ne Mortgage

At O1ne Mortgage, we prioritize your financial well-being and aim to provide you with the best advice for managing your finances. If you have any mortgage-related needs, feel free to call us at 213-732-3074. In this article, we will explore the pros and cons of paying utility bills with a credit card and how it can impact your credit score.

What Utilities Can You Pay With a Credit Card?

Depending on your utility provider, you can usually pay the following utility bills with a credit card:

• Phone or cellphone bill
• Internet bill
• Cable bill
• Water bill
• Electric bill
• Gas bill

Pros and Cons of Paying Utility Bills With a Credit Card

Pros of Paying Utilities With a Credit Card

• Earn Rewards: Using a rewards credit card to pay your utility bills can help you earn points, miles, or cash back.
• Purchase Protection: Some credit cards offer purchase protection for items paid with the card, such as damage or theft protection for your cellphone.
• Welcome Bonuses: Paying utility bills with a new credit card can help you meet spending requirements to earn welcome bonuses.
• Ensure Payments Go Through: Automatic payments with a credit card can prevent missed payments due to insufficient funds in your checking account.
• Dispute Charges Easily: Disputing charges on a credit card is often simpler than with a checking account.
• Boost Your Credit Score: Regular, on-time payments can help build a solid credit history.

Cons of Paying Utilities With a Credit Card

• Convenience Fees: Some utility providers charge a fee for credit card payments, which can add up over time.
• Credit Score Impact: High credit utilization from paying multiple utility bills with one card can negatively affect your credit score.
• Interest Charges: If you don’t pay your credit card balance in full, interest can accrue, making it harder to pay off your balance.

How to Pay Utilities With a Credit Card

To set up automatic payments for your utility bills, visit your utility provider’s website or call their customer service. Some providers accept direct credit card payments, while others may require a third-party processor, which could involve additional fees. Ensure you understand all associated fees before setting up automatic payments.

How On-Time Utility Payments Can Improve Your Credit

While utility payments are not typically reported to the major credit bureaus, on-time payments can still positively impact your credit score. Services like Experian Boost® allow you to add utility accounts to your credit report, potentially boosting your score by reporting only on-time payments.

The Bottom Line

Paying utility bills with a credit card can offer several benefits, but it’s essential to monitor your credit card balances to avoid high credit utilization. For any mortgage-related inquiries, call O1ne Mortgage at 213-732-3074. We’re here to help you make informed financial decisions.

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