Paying utility bills can be a significant recurring expense. Using the right credit card to pay these bills can unlock valuable rewards, helping you earn cash back, travel points, or other perks. This article explores the best credit cards for utility bill payments in 2024, focusing on maximizing your rewards and minimizing fees.
| Credit Card | Rewards Rate on Utilities | Key Features |
|---|---|---|
| Chase Freedom Unlimited® | 1.5% cash back on all purchases, including utilities | No annual fee, 5% cash back on travel purchased through Chase Ultimate Rewards, 3% on dining and drugstores, 1.5% on all other purchases. Intro APR offer may be available. |
| Citi® Double Cash Card | 2% cash back on all purchases (1% when you buy, 1% when you pay) | No annual fee, simple rewards structure, earn cash back as ThankYou® Points (can be converted to cash or travel). |
| Discover it® Cash Back | 5% cash back on rotating categories (may include utilities) | No annual fee, 5% cash back on rotating categories that change quarterly (activation required), 1% cash back on all other purchases. Discover matches all the cash back you’ve earned at the end of your first year, automatically. |
| Blue Cash Preferred® Card from American Express | 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and at transit, and 1% cash back on other purchases | Annual fee (see terms), 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations and at transit, and 1% cash back on other purchases. Amex Offers provide additional savings. |
| U.S. Bank Cash+® Visa Signature® Card | 5% cash back on two categories you choose (up to $2,000 in combined purchases each quarter), 2% cash back on one everyday category you choose, and 1% cash back on all other eligible net purchases. | No annual fee, allows you to customize your rewards based on your spending habits. 5% cash back on two categories you choose (up to $2,000 in combined purchases each quarter), 2% cash back on one everyday category you choose, and 1% cash back on all other eligible net purchases. |
| Capital One Quicksilver Cash Rewards Credit Card | 1.5% cash back on every purchase, every day | No annual fee, simple, flat-rate rewards structure. |
| Wells Fargo Active Cash® Card | 2% cash rewards on purchases | No annual fee, straightforward rewards program. |
| Amazon Prime Rewards Visa Signature Card | 5% back at Amazon.com and Whole Foods Market (with Prime membership), 2% back at restaurants and gas stations, 1% back on all other purchases. | No annual fee (with Amazon Prime membership), excellent rewards for Amazon and Whole Foods shoppers. |
| PayPal Cashback Mastercard® | 2% cash back on all purchases | No annual fee, simple rewards, cash back deposited into your PayPal account. |
Detailed Explanations
Chase Freedom Unlimited®: This card offers a straightforward 1.5% cash back on all purchases, making it a solid choice for utility bills if you don't want to track rotating categories or specific spending bonuses. The lack of an annual fee and the additional rewards on travel, dining, and drugstores make it a versatile everyday card. The intro APR offer can be a good option for those who need to make a big purchase and pay it off over time.
Citi® Double Cash Card: The Citi® Double Cash Card offers a simple and competitive rewards structure. You earn 1% cash back when you make a purchase and another 1% when you pay it off, totaling 2% cash back on everything. This flat-rate reward makes it easy to understand and utilize, and there's no annual fee to worry about. The cash back is earned as ThankYou Points, which can be redeemed for cash or travel.
Discover it® Cash Back: This card is attractive due to its rotating 5% cash back categories, which sometimes include utilities. You need to activate these categories each quarter, but if utilities are included, it can provide significant savings. The 1% cash back on all other purchases ensures you still earn rewards on non-category spending. The first-year cash back match is a valuable bonus for new cardholders.
Blue Cash Preferred® Card from American Express: While this card has an annual fee, the high rewards rate on U.S. supermarkets (6% on up to $6,000 per year), select U.S. streaming subscriptions (6%), and U.S. gas stations and transit (3%) can easily offset the fee if you spend significantly in those categories. The 1% cash back on other purchases, including utilities, might not be the highest, but the other bonus categories are valuable. Amex Offers can also provide additional savings.
U.S. Bank Cash+® Visa Signature® Card: This card gives you the flexibility to choose your 5% and 2% cash back categories. You can select two 5% categories (up to $2,000 in combined purchases each quarter) and one 2% category, allowing you to tailor your rewards to your spending habits. This is particularly useful if one of the available 5% categories aligns with a significant utility expense. Remember to choose your categories each quarter to maximize your rewards.
Capital One Quicksilver Cash Rewards Credit Card: The Capital One Quicksilver card simplifies rewards with a flat 1.5% cash back on every purchase. There's no need to track categories or minimum spend requirements. The absence of an annual fee makes it a straightforward and user-friendly option for earning rewards on all your spending, including utility bills.
Wells Fargo Active Cash® Card: Similar to the Capital One Quicksilver card, the Wells Fargo Active Cash® Card offers a simple and straightforward rewards program. You earn 2% cash rewards on purchases, making it a good option for those who prefer a flat-rate rewards structure. The lack of an annual fee further enhances its value.
Amazon Prime Rewards Visa Signature Card: If you're an Amazon Prime member, this card is a great choice. You earn 5% back at Amazon.com and Whole Foods Market, as well as 2% back at restaurants and gas stations, and 1% back on all other purchases. While the 1% back on utilities isn't the highest, the benefits at Amazon and Whole Foods can make this card worthwhile, especially if you do a lot of shopping there.
PayPal Cashback Mastercard®: This card offers a simple 2% cash back on all purchases, and the cash back is deposited directly into your PayPal account. There's no annual fee, making it a convenient option for those who frequently use PayPal. It is an easy option for earning cash back on utility bills, especially if you pay them through PayPal.
Frequently Asked Questions
Can I use a credit card to pay all my utility bills? It depends on the utility company. Most accept credit card payments, but some may charge a fee. Check with each provider to confirm their payment options and any associated fees.
Will I be charged a fee for paying utilities with a credit card? Some utility companies charge a "convenience fee" for credit card payments. Calculate if the rewards you earn outweigh the fee.
How do I choose the best credit card for utility bills? Consider your spending habits, the utility companies' accepted payment methods, any associated fees, and the rewards programs offered by different credit cards.
What is a good cash back percentage for utility bills? Aim for at least 1.5% cash back to make it worthwhile. If you can find a card with a higher bonus rate or a rotating category that includes utilities, that's even better.
Does paying utility bills with a credit card help build credit? Yes, as long as you make your payments on time and keep your credit utilization low, paying your utility bills with a credit card can help you build a positive credit history.
What are rotating categories? Rotating categories are bonus rewards categories that change every quarter. For example, a card might offer 5% cash back on gas and groceries one quarter, and then 5% cash back on Amazon and department stores the next.
What is an annual fee? An annual fee is a yearly charge for owning a credit card. Cards with higher rewards rates often have annual fees, but not always.
What is APR? APR stands for Annual Percentage Rate. It is the interest rate you are charged on your outstanding balance if you don't pay your balance in full each month.
What is credit utilization? Credit utilization is the amount of credit you are using compared to your total credit limit. It is recommended to keep your credit utilization below 30% to maintain a good credit score.
What are ThankYou Points? ThankYou Points are the rewards currency earned with certain Citi credit cards. They can be redeemed for cash, travel, gift cards, or other rewards.
Conclusion
Choosing the best credit card for utility bill payments depends on your individual spending habits and preferences. Consider the rewards rate, annual fees, and any potential convenience fees charged by your utility providers to maximize your savings. For a simple, no-fuss option, the Chase Freedom Unlimited® or Citi® Double Cash Card are excellent choices, while the Discover it® Cash Back and U.S. Bank Cash+® Visa Signature® Card offer the potential for higher rewards through rotating or customizable categories.